Lessons from the Great Depression
In my newfound study of economics, I read several econobloggers. In the New York Times yesterday, Economix blogger, Catherine Rampell linked to an NYT piece by David Leonhardt, Lesson from a crisis: When trust vanishes, worry. His opener got me thinking:
In 1929, Meyer Mishkin owned a shop in New York that sold silk shirts to workingmen. When the stock market crashed that October, he turned to his son, then a student at City College, and offered a version of this sentiment: It serves those rich scoundrels right.
A year later, as Wall Street’s problems were starting to spill into the broader economy, Mr. Mishkin’s store went out of business. He no longer had enough customers. His son had to go to work to support the family, and Mr. Mishkin never held a steady job again.
Frederic Mishkin — Meyer’s grandson and, until he stepped down a month ago, an ally of Ben Bernanke’s on the Federal Reserve Board — told me this story the other day, and its moral is obvious enough. Many people in Washington fear that the country is starting to spiral into a terrible downturn. And to their horror, they see the public, and many members of Congress, turning into modern-day Meyer Mishkins, more interested in punishing Wall Street than saving the economy. Read more…
Catherine Rampell, back at Economix wrote, in Are We Too Young to Remember the Great Depression?
“The Great Depression has been invoked constantly throughout this debate. But I wonder if the reason why so many people are skeptical of the threat of a trickle-down crisis is that the country is now too young to remember the 1930s.”
I don’t think so. I heard countless stories of the Great Depression firsthand from my grandfathers, Russ and Steve, and my grandfather-in-law, Gustav. I am only 48 and my own teens, 16 and 19, have heard the stories, though not recently. I should get busy writing those stories down. They are really interesting! In hindsight, it is intriguing how each of them repeated their stories. Yes, I was one of those granddaughters who loved to listen to grandparents’ stories, but they told the stories as if maybe one day I would see such times. Or maybe they just wanted me to know what they went through and wanted me to remember.
Each man had a completely different perspective: one as the son of Ukrainian immigrants in rural Saskatchewan, one a great-grandson Irish immigrants and a struggling college student in Iowa and one a son of German immigrants and a young married Minnesota farm boy. For each of them, the theme was similar: they had enough food to eat because they all had gardens and livestock, made their own clothes and could trade for what they needed; they simply had little or no cash. Crops would grow, but eventually they didn’t have cash to buy crop seeds. Families, faith and traditions faith remained strong, and there was a great sense of community;that these three men have many descendants is testament enough to that. Small town folk really took care of each other. It would be interesting to see how our modern culture would cope with such circumstances.
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