November 9, 2008

We're Americans and We Never Give Up

The Great Depression

By 1928 and 1929 the Federal Reserve was worried about the high level of the stock market. It feared that the "bubble" component of stock prices might burst suddenly. When it did burst, pieces of the financial system might be suddenly revealed to be insolvent, the network of financial intermediation might well be damaged, investment might fall, and recession might result. It seemed better to the Federal Reserve in 1928 and 1929 to try to "cool off" the market by making borrowing money for stock speculation difficult and costly by raising interest rates. They accepted the risk that the increase in interest rates might bring on the recession that they hoped could be avoided if the market could be "cooled off": all policy options seemed to have possible unfavorable consequences.

In later years some, Friedrich Hayek for one, were to claim that the Federal Reserve had created the stock market boom, the subsequent crash, and the Great Depression through "easy money"policies. Source

Timeline of Economic Recessions/Depressions

Many of us grew up hearing our parents stories of the Great Depression. We heard it when we left the lights on all over the house, when we turned the heat up to 75, when we wanted the top of the line clothes,cars and gadgets; when we wanted anything we really did not need.

My maternal grandfather was one of the fortunate ones who had a necessary job. His wife would stash housekeeping cash and ran her own version of a soup kitchen from home while he was at work. I'm sure he knew about it from neighborhood ‘talk’ but it was grandmothers contribution to the ‘shanty people’ who camped out near the railroad. He never said a word. Other than walking to school in the ice and snow in the mandatory dress, one of mothers favorite stories was about the people who knocked on the back door for bread and soup and the 'secret' she shared with her mother.

Life on the paternal side of my family was a lot tougher. They were Catholic immigrant farmers from the old country who were looked down upon by the locals. But their spirit of survival sustained them through the hard times. All 5 kids had their roles and tasks - the most important one was going to school. There wasn't a yellow bus in those days, just a footpath or the horse and wagon on bad weather days. The only time kids missed school was for the harvest season.

Grandpa John was proud of his citizenship. His slogan was 'we're Americans now and we never give up'.

1 comment:

The North Coast said...

Thanks for sharing this great story!

I auger we will be turning to our elders for their stories, to help us clear a path through the rough times ahead. Who knows, we might also become as generous and spirited as people were at that time- I hear many stories of people who let homeless families sleep in the vestibules of their flats, and the favor was returned by doing a little work for the family.

We'll somehow adjust if we get rid of our ideas about how life ought to be, and what's due us. We'd better.