Tuesday, August 9, 2011

The Forgotten Man at the Bottom

Even if you only catch national news on the fly while switching channels between ESPN and Disney, you probably noticed that this week everyone's talking about the economy and whether or not we're headed for another Great Depression.

The historical part of my novel FEAR ITSELF is set in the first week of March, 1933. The main reason I chose that week was the infamous "bank holiday" that officially began on March 5th and shut down all U.S. banks. In my mind, I pictured that as a really scary thing--no credit cards, no ATMs, no way to access your money. No knowing how long that would be the case.

Then I asked my parents about it. "We didn't even notice," Mom said. "We didn't have enough money to put in the bank."

A difficult concept to wrap my brain around: No savings, except maybe a few bucks squirreled away behind a picture frame now and then. More likely only the coins in your pocket to get you through each day.

That's not to say that poor people weren't affected by the Depression.  This is where the theory of trickle down economics has any validity at all--not in times of prosperity, but in times of loss. When speculation bubbles burst, the loss gets passed down the ladder to the poor. They're the first to lose their jobs, their means of transportation, and their homes. And because they have so little, the percentage of what they do lose is huge. Less workers, less mortgages, less loan payments all mean less profit, so eventually the wealthy also lose money and the situation, at last, can be called a Depression. Someone finally takes a look at the economic structure and finds the weak links.

In 1933, banks were some of these links. No computers then. At best, this meant human errors often went undetected. At worse, lack of consistent record keeping made corruption and fraud easy. FDR called a "bank holiday" so Federal inspectors could audit bank records. Once a bank passed audit, they could reopen. Since Saturday March 4th was the president's inauguration, many banks were persuaded to close early on Friday the 3rd, giving the inspectors a long weekend to get started.

As some of you know, I start my historical chapters with period quotes. Here are a few of my favorites from FEAR ITSELF:

"All the really important millionaires are planning to continue prosperity."
 Arthur Brisbane, Nov. 26, 1929

"These really are good times but only a few know it."
Henry Ford, 1930

"There is not an unemployed man in the country that hasn't contributed to the wealth of every millionaire in America."
Will Rogers, Nov. 1931

"These unhappy times call for the building of plans...that put their faith once more in the forgotten man at the bottom of the economic pyramid."
FDR, campaign speech, April 1932

So, are we headed for another Depression now? Don't ask the bankers or Wall Street. Ask the forgotten people at the bottom of the pyramid. Many of them will tell you we're already there.


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