Saturday, October 31, 2009
Ironies abound over the past 80 years of economic prosperity and collapse, according to author and historian Robert S. McElvaine. On the same day (October 29, 1929) that the stock market crashed, the song “Happy Days are Here Again” was recorded by the Casa Loma Orchestra. The lessons of the Great Depression produced yet another irony that helped the nation not only recover but enjoy decades of economic success—the fact that a little bit of socialism can do wonders for a capitalist economy.
The period preceding the Depression was marked by high concentrations of wealth among a small portion of the population, low tax rates for the rich, and weak labor unions. But the progressive policies implemented by Franklin Roosevelt, and adhered to by succeeding administrations, redistributed wealth more evenly among all Americans, raised taxes on the rich, and strengthened the clout of organized labor. These moves, branded as “socialist” by critics, remained in effect until the 1980s, when the Reagan administration reversed the policies of the New Deal, and helped set up the economic collapse of 2008.
“In an economy that is dependent on mass consumption, the masses have to receive a sufficient share of the income to consume at a rate that will keep the economy going,” writes McElvaine. “When Barack Obama said during last year’s campaign, ‘I think when you spread the wealth around, it’s good for everybody,’ opponents called it socialism. In fact, it is the only way to make modern capitalism work well.”
-Noel Brinkerhoff
"Black Tuesday" and "Happy Days Are Here Again" at 80 (by Robert S. McElvaine, Huffington Post)
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