Memory, Forgetting and the Economic Crisis

The battle of memory against forgetting needs to fought over and over again, and nowhere more than in the current economic crisis. As Peter's post rightly remind us, the rise of the New Deal and its regulatory state was no easy thing. Nevertheless, the Americans of the 1930s had one strength that our present generation lacks: a fifty-year inheritance of arguing about the shape and purposes of the economy.

From debates over greenbacks after the Civil War to Populism to the Progressive Era, Americans of all sorts were consumed by arguments over finance, corporations, and the economy. Some of them even voted for a Socialist candidate for president, Eugene V. Debs. They were hardly of one mind on where to go, but the best among them raised questions and visions that informed the New Deal.

Today, most Americans lack the historical perspective that would help them claim this heritage. Confounded by the false glories of Reaganism and accustomed to the small measures of Clintonism, too many of us--the president included--seem wary of crossing the titans of Wall Street.

But the only way out of this crisis, as Peter observes in his post on Glass-Steagall, is for President Obama to stand firm in any confrontations with Wall Street. The big money men will want the recovery on their terms, and we can't have that.

I'm disappointed by the president's plan for dealing with toxic bank assets, which strikes me as socialism for the rich and risky markets for the rest of us. At the same time, I'm heartened by the president's insistence that troubled auto firms need new plans and new leadership before they get any help from the people. Yet I fear that the next thing we see will be enormous pressures on the United Auto Workers to give up the benefits and decencies that they won as union members.

We're moving through strange and spooky terrain. In these times, it is useful to remember what someone said, as I recall it, in the early years of the twentieth century: Sometimes, the task of government is to put rings in the snouts of hogs.