It is generally accepted that Americans are a nation with a very short historical memory. For citizens of a state formed just over 240 years ago, this is not surprising. But there are events in US history that everyone knows about. For example, the landing of Armstrong on the moon. Vietnam war. September 11, 2001.
One of such events forever imprinted in the historical memory of Americans was, is and will be the Great Depression. Strictly speaking, the economic crisis continued in the United States throughout the 30s of the XX century, but the 48 months of 1929-1933, which are called the Great Depression, are considered its most acute phase.
Then the world's most dynamic economy fell into the abyss that suddenly opened under its feet: industrial production fell by 50%, more than 5 thousand banks went bankrupt. Unemployment, increasing every year of depression, peaked by early 1933 - 25%. More than 17 million people lost jobs. Hundreds of thousands of Americans lost their homes, and slums grew like mushrooms all over the country, similar to the bidonville in Asia and Africa, called the “Hooverville” (the president, under whom America was covered by the Great Depression, was called Herbert Hoover). The fate of one of such slum towns, Anacostia near Washington, “built” by World War I veterans, has become a black page in US history.
By May 1932, the population of Anacostia exceeded 15 thousand people. Veterans came to the District of Columbia from all over the country with hares on freight trains - and this was a very troubled neighborhood, as retired soldiers constantly held hunger marches, rallies and demonstrations, demanding to restore payments on veteran benefits ("bonuses"). In the end, by order of President Hoover, General Douglas MacArthur threw cavalry at Anacostia, armed with machine guns, infantry, bulldozers and even tanks - and in a few hours wiped the Hooverville off the face of the earth.
The Great Depression hit the rural outback especially hard: in full accordance with the Russian proverb about trouble that doesn’t come alone, the Midwest was struck by severe drought, farms went bankrupt by hundreds of thousands, farmers killed their families, went roaming or committed suicide ...
Thousands of books and dozens of films have been written about the Great Depression. At the same time, no one can really explain what exactly made the economic catastrophe inevitable. At the level of simple common sense, President Hoover’s bitter remark remains the best explanation of the Great Depression: “You know, the only problem of capitalism is the capitalists, they are damn greedy.” But at the level of macroeconomic models, there are many versions, however, there was no consensus, and no.
And if you do not know exactly what caused this or that disaster, the fear of its possible recurrence becomes irrational.
And now, against the backdrop of the coronavirus pandemic, which has killed nearly 92 thousand people in the United States, and the sharp economic failure, the formidable specter of the new Great Depression is increasingly frightening both ordinary Americans and journalists with experts. And the liberals are actively using this “scarecrow” in order to combat the President Trump, whom he hates.
“A new Great Depression is coming! Will there be a new New Deal? ” - wonders NYT columnist Michelle Goldberg.
“We are already in the Great Depression!” - confidently answers her professor at Columbia University Jeffrey Sachs on CNN. Both Goldberg and Sax are quite clear who is to blame for this: of course, Trump, whose policy "leads to tens of thousands of deaths and the Great Depression at the same time," Trump, who plunged the country into "economic collapse."
The recent forecast by the head of the US Federal Reserve Jerome Powell, according to which US GDP in the second quarter of 2020 can be reduced by 20 or even 30%, and unemployment at its peak can reach 20-25%, only added fuel to the fire - despite the fact that Powell himself is somewhat once said that the current crisis is unlikely to become the second Great Depression.
“I do not think that this is generally a likely result. There are some fundamental differences. Firstly, two months ago we had a very healthy economy. And this (pandemic. - K. B. ) is an external event, a natural disaster. This is a significant difference (the situation of 2020 from the time of the Great Depression. - K. B. ). In the 1920s, when the depression occurred, when the collapse and everything else happened, the financial system really collapsed. Now our financial system is strong, it is able to withstand what is happening. After the last crisis, we spent ten years strengthening it. So this is a big difference. ”
In addition, Powell emphasized that during the global crisis of the 30s of the last century, central banks raised interest rates to maintain the gold standard - and this was "the exact opposite of what needed to be done."
But Trump critics don't need optimistic forecasts. All they need is “scary numbers” —the same peak unemployment at 25% and a drop in GDP to 30%.
Indeed, the current situation in the US economy looks rather sad.
The unemployment rate rose to 14.7% (before the pandemic, “tramponomics” reduced this figure to 3.4%).
Over the past two months, according to the US Department of Labor, more than 36 million people have applied for unemployment benefits. In the first week of May alone, the ministry received 3 million applications, and although the intensity of applications is decreasing (not least because the number of jobs is being proportionally reduced), the scale of the disaster is really impressive.
Coronavirus is not particularly versed in the political preferences of its victims, but it perfectly distinguishes the poor from the rich. Jerome Powell quoted above in a commentary on a report published last Thursday by the US Federal Reserve noted: “Despite the fact that we all suffered (from a pandemic. - K. B. ), this burden falls most of all on the shoulders of those who are least capable of it to endure. " According to the report, representatives of 40% of households whose total annual income is less than $ 40 thousand lost their jobs. Many Americans who lose their jobs say that if they develop symptoms of coronavirus, their financial situation will not allow them to seek medical help. Surveys showed that even before the pandemic, in 2019, 25% of adult Americans did not seek medical help because they could not afford it.
And this, of course, is very bad news for Trump, who hoped to triumph in the 2020 election, relying primarily on his successes in the economy and reducing unemployment.
“Of the record 20.5 million jobs lost in April, most will not be restored in the near future, regardless of whether the states declare their economies open,” predicts Jeffrey Sachs. - E-commerce will supplant many jobs in retail. Jobs created in online trading cannot be compared with those that disappeared from ordinary stores. ”
It is difficult to argue with this, but much more dangerous for Trump will be the increase in unemployment at industrial enterprises, especially concentrated in the industrial heart of America - the states of the Rust Belt. In Michigan, according to the Ministry of Labor, three out of ten workers, or 33%, applied for unemployment benefits.
In Pennsylvania, the figure is 29.6%, slightly less (about 22%) in Minnesota and Ohio. The accompanying pandemic economic downturn undermined President Trump's promises to revive national production, especially the metallurgical industry, and it was the blue collars of the Rust Belt that completed these promises that ensured his victory in 2016.
But the Rusty Belt still remains a “wild card” in the deck, which can play both against Trump and against him. The fact is that the governors of many states of the Rust Belt are democrats, zealous opponents of the current president. Michigan Governor Gretchen Whitmer is one of the country's most fierce defenders of self-isolation, and her obstinacy on this issue has already sparked armed protests and even the assault on the State Capitol three weeks ago. But even the wave of indignation of the residents of Whitmer State did not make sense: she continues to “warn” the protesters that their demonstrations will “end badly” and is not going to open enterprises yet.
Another Democratic Governor, Tom Wolf (PA), vetoed a bill proposed by the Republicans in April that called for the opening of a number of industrial enterprises.
Thus, the anger of the blue-collar workers of the Rust Belt, instead of turning to the president, who has broken (albeit involuntarily) his promises, may fall on the heads of those who are directly responsible for closing their enterprises, that is, governors-democrats.
Add to this that many Trump voters are probably surprised by how hatred of the president robs his opponents of their last patriotic feelings and pushes them to malevolent predictions about the future of their country. What should, for example, readers of the already mentioned opus of Jeffrey Sachs think on CNN, in which a professor at Columbia University explicitly threatens his country with "retaliation" from China:
“Trump's last idea is to force companies to return production from China and rebuild their supply chains here. This is another fantasy. Strengthening attacks on China, including new measures to disconnect Chinese companies from US semiconductor technology, Trump will crush the growth prospects of most of America's high-tech industry, whose business includes international markets, including China’s vast population. Trump’s actions will cause retaliation from China and accelerate the day when China will compete with the US in various areas of semiconductor manufacturing and design, such as specialized chips for artificial intelligence and 5G. ”
For Trump’s opponents, the specter of a new Great Depression looming on the horizon of America is another gift of fate that allows you to invoke earthly and heavenly punishment on the incumbent president and dream of a new Roosevelt and a new “green deal” (as Michelle Goldberg does in his NYT column). But the more they wave this bogeyman, the more significant are Trump's chances of winning the 2020 election if his administration's economic course gives the first real results by the end of summer - early fall. And there is reason to hope for this - in any case, the powerful US Federal Reserve is playing on the side of the president. And reputable business analysts believe that all the talk about the recurrence of the Great Depression is nothing more than journalistic exaggeration. Yes, the pandemic caused a macroeconomic shock, the depth and rate of decline in production have no analogues in this century and can scare. But from the macroeconomic shock - even a serious one - to the structural collapse of the economy, such as depression or the debt crisis, it is still far, say the three leading experts of the influential Boston Consulting Group on the pages of the Harvard Business Review.
The devastating consequences of the Great Depression were not least due to the mistakes of politicians. The price of error now, in the election year, is higher than ever, and Trump, of course, takes this into account. But his opponents, who do not consider it necessary to hide their gloating in a situation where all Americans are by and large in the same boat, do not seem to understand.
The point of view of the author may not coincide with the position of the publisher.