There have been some interesting comparisons of the present day to the years around the Great Depression. There certainly have been some big slides in the market and huge fortunes (and a lot of retirement funds) have been severely hit. And there is a huge wave of layoffs triggered by the collapse of international trade. And of course, like in the 1930’s there is a lot of discussion about protectionism to keep them ‘damn foreigners’ from taking our jobs, etc. But one thing that troubles me is what has changed since then and will these changes affect out ability to recover this time?
Over the last few years governments in the US and Canada have made it increasingly difficult to get unemployment and other forms of social assistance — force people back to work was one of the mantras. And the contingency funds, like UI in Canada, were raided for funds (or quietly merged into ‘general revenue’). And private companies were allowed to dig into pension fund surplusses — was just too much money sitting there. It is a rainy day and the rainy day funds have been spent.
But more important,what has happened to the civility and willingness to endure hardships for the benefit of the country? Much has been said about how psychological marketing has successfully changed citizens into consumers — for products and policies. And how the view that people were ‘entitled’ to huge homes, fancy vacations and other extravagances. But the rising home prices that they were borrowing against and the exotic financial instruments that were providing the funds have all come crashing down. But having convinced people that they were entitled to things and having broken their cohesiveness through divisive politics, how are these same business and government forces going to get people to believe that things can get better, so they can get better.
It is my view that the real problem is a loss of faith, not the consequential economic downturn. So the solution is probably more of the economic version of a revival meeting than specific patterns of government spending. But having worked so hard to destroy social cohesiveness, how can our ‘leaders’ get people to come to the tent and get their faith restored? And what is worse, what will prevent these displaced people from following their programming to get all they can for themselves from spilling into social unrest and real societal turmoil?