As I watched the CNBC Republican Presidential Debate, I was reminded of my fiscally conservative cousins. Recently, one of them pontificated that the United States needs a second Great Depression so citizens can learn the values that made their country great again. According to her, we lost our values of responsibility and living within our means that we learned in the 1930s and exercised in the 1950s.
I agree entirely. In the past 15 years, we lost our political will to take responsibility for our economy through smart regulations on industry. Furthermore, we have spent trillions of dollars on tax breaks for people who didn’t need them and wars that were not paid for. In the meantime, we have ignored the needs of the poor and middle class by gutting vital social programs.
After the Great Depression, Franklin D. Roosevelt passed the Glass-Stegal Act’s banking regulations that made investing safe, profitable and relatively predictable. With thousands of people living in Hoovervilles and the banking industry clearly overleveraged, the American people would settle for nothing less than tight limits on how much money banks could lend relative to the capital they maintained on hand.
Banks were still allowed to take risks and make profits, and lending didn’t stop. Our economy recovered initially, then boomed for 30 years. But opaque and reckless banking practices of the 1920s were made illegal. As a people, we took responsibility for making our economy stable and prosperous through collective action to limit the banking practices that lead to the Depression. More importantly, we brought banking practices to light.
Our grandparents (or great-grandparents) saw the economic devastation of the Great Depression, and they knew reckless banking practices in the 20s were to blame. The American people settled for nothing less than Glass-Stegal and the smart regulations it imposed.
Decades later, Lyndon B. Johnson implemented the Great Society, which included Food Stamps, Social Security and Medicare. As a school teacher in Cotulla, Texas, Johnson saw the horrors of poverty that persisted in rural areas firsthand. He saw students who ate one meal a day — a school lunch — and sometimes nothing when classes were not in session. They weren’t dieting. They were extremely poor.
In Congress, the Senate and the White House, Johnson worked to eradicate poverty. He proposed the largest expansion of anti-poverty programs since Roosevelt’s New Deal. Millions of seniors and poor people got basic healthcare, and the schoolchildren Johnson taught in Cotulla could afford to eat more than one meal per school day.