Waiting for the luster to forever fall off the gospel of the free market.
By SAMUEL FREEDMANFreedman, samuel 88(photo credit: )
For as long as I've visited my Aunt Fannie and Uncle Danny, meaning as many of my 53 years as I can remember, I've been fascinated by their refrigerator. There must be about two cubic inches of air inside it. The rest of the space has been filled with tuna salad, vegetable croquettes, whipped cream cheese, seltzer, iceberg lettuce and probably the planet's last remaining cans of Carling Black Label beer.
Not that you'd immediately notice all the contents. Aunt Fannie specializes in repackaging any item, whether newly bought or left over, that can be fitted into a plastic container, which itself probably began life holding margarine on a supermarket shelf. These containers she then arranges with a jigsaw puzzle master's brilliance, so that the refrigerator holds the maximum amount of edible sustenance possible.
The reason Aunt Fannie has practiced her particular art is that she and Uncle Danny lived through the Great Depression. As their nephew, the son of Fannie's sister Eleanor, I knew that much family history. So while I found amusement in Aunt Fannie's refrigerator, I also understood it as the physical evidence of the psychic mark inscribed by the Great Depression. Even into their 80s, my aunt and uncle could not stop preparing for the next stretch of hard times.
Being a card-carrying baby boomer - which these days means the card from the AARP you get offered at age 50, even if you're still decades away from being a "retired person" - I never saw much relevance to my life in the refrigerator's cautionary tale. I had been through recessions, especially the sharp drop in the early 1980s. Back then, I watched a newspaper I had previously worked for shut down, covered factory closings in New England as a cub reporter for The New York Times, and once interviewed the department-store Santa in a blue-collar town who had kids asking him to bring daddy a job for Christmas. But the kind of sweeping economic collapse of the Great Depression seemed an impossibility. Hadn't the United States in the New Deal enacted exactly the sort of protections that would stop a repeat before it happened?
Well, the experience of being an American these past several weeks has made me come to wonder just how impossible Great Depression II actually is. I'm not the sort of person given to panic on money matters, and I've never counted on the stock market for my income. When the dot-com bust and September 11 combined to drive down by half the first investment account I'd ever opened, I took a paper loss for tax purposes and got back in to watch the account grow steadily over the next seven years.
WHICH BRINGS me, like my American landsmen, to late September and early October 2008, which have been days of awe in a way the sages never imagined. The money I have in the market, like nearly everybody else's, has lost something like 40 percent of its value in a matter of weeks. I say this not to complain. My investments have always been for down the road, for college tuition for my children, which is still a few years off. Let's just say that never has the lifetime job security of being a tenured professor, as I am at Columbia University, seemed so integral.
In the part of my life outside the classroom, I earn my keep as a journalist and author, and the written-word industry was in a tailspin a year before the current turbulence. An education column I used to write for The New York Times no longer exists; the paper a few months ago made the first involuntary layoffs in its history. An acquaintance who is an award-winning religion reporter got cut loose after a dozen years by a major newspaper in Florida. A former student who edits a Jewish magazine just learned it's suspending publication. The New York Sun, a daily for which several friends wrote and edited, closed last week.
For me and my ilk, clicking on the Dow every five minutes, watching the fever line plunge into hypothermia territory, there's a lesson, and one altogether relevant to this election season. I learned in college all about the New Deal and its reforms of the free market, the way activist government saved capitalism from itself. For most of my adulthood, though, the popular orthodoxy of American politics has been that, in Ronald Reagan's phrase, "government is not the solution; government is the problem." Even Bill Clinton had to fight a rear-guard action, scaling back and toughening up failed government programs like welfare (Aid to Families with Dependent Children) in order to preserve the broader notion of the welfare state.
The biggest help Clinton ever got was from his nemesis, Newt Gingrich. Overreaching the mandate that swept the conservatives of the "Contract With America" movement into control of Congress, Gingrich let the federal government shut down in 1995 rather than pass a budget he considered too large. When everyday citizens, even those who parroted the anti-Washington pablum, realized that no federal government meant the local post office and the national parks were shutting down, the backlash hit the Republicans.
STILL, THE moment of clarity did not last. A nearly religious belief in the infallibility of the market reigned again during George W. Bush's eight years as president. Efforts to regulate the latest generation of abstruse investment products - which were ultimately tied to mortgages peddled to people who could not remotely afford them - were scoffed at by no less than Alan Greenspan, guru of the Federal Reserve. As long as somebody else came along to pay even more for an already wildly overpriced house, the Ponzi game went on.
Now that it has gone haywire, sending collateral damage throughout the US economy and literally around the world, lo and behold, all but the most hidebound libertarians are looking to Washington. And nothing Washington has done, at least as I write these words on October 10, has reversed the tide of fright and sale.
There is a cynical kind of justice, I suppose, in the futility of a belated turn to the maligned public sector. As other commentators have put it, the Wall Street mavens and moguls want capitalism when they're making money and socialism when they're losing it. The only problem, of course, is that their demise will drag a lot of the rest of us along. I can only wait for the bottom to be struck, for some kind of stability to return and for the luster to forever fall off the gospel of the free market.
I called Aunt Fannie and Uncle Danny the other day to see what they thought of all the chaos, if it brought back Depression nightmares. They certainly had enough bad memories. My grandmother, Fannie's mother, sometimes had to scavenge rotten vegetables from the pushcart market in the East Bronx because her husband was out of work so long. Uncle Danny's family moved something like 20 times during the Depression years, skipping out on apartments at the end of the month or two of free rent that desperate landlords were offering to entice paying tenants. One of the landlords they stiffed was the cousin of Danny's father.
Interestingly, though, Aunt Fannie and Uncle Danny sounded fairly sanguine on the phone. Having endured one depression, they had never bought stocks. Their retirement money was in cash bank accounts or certificates of deposit, eminently safe products. They never took the kind of financial chances that might have let them live large, and as a result of their prudent judgment and modest tastes they are luxuriating in peace of mind amid the maelstrom. They kept the refrigerator full.
www.samuelfreedman.com
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