Well, this is a holiday weekend when we celebrate our independence from our friends on the other side of the pond.
But our independence has been more of a mixed blessing that you might think. Britain abolished slavery in 1833 without a civil war. Of course, they didn't have the cotton economy that we did.
Britain started its NHS -- National Health Insurance -- in 1948. We still don't have it and are at the mercy of the insurance companies and a major illness can leave you bankrupt. The insurance companies demonize NHS by talking about long waits but ask our friends in Great Britain or Canada if they would give it up.
But then are friends across the pond aren't always wiser than we are. They are doing the same austerity thing we are doing and cutting spending when economics 101 is that government should increase spending in times of recession. We are trying to do what Herbert Hoover did and we know how that worked out. In fact FDR was convinced to cut spending in 1937 and that hurt the economy until a federal jobs program called WWII and the subsequent GI bill turned us into a middle class country.
In a Washington Post article called What History teaches us about the welfare state, the author, Francois Furstenberg notes that in 1873 the collapse of Jay Cooke @ Co., the nation's premier investment bank started a financial crisis. It overextended itself by offering risky loans based on overvalued real estate. The government did nothing and for 65 straight months, the economy shrank. It also started an era of labor unrest, including the Homestead stroke of 1892, probably the most violent labor conflict in American history.
The author points out that vast disparities between the rich and poor, the spectacular concentration of wealth amassed by the richest Americans in the two previous generations and the inability of government policies to mitigate the crisis brought the nation to the edge of class warfare and social disintegration.
Of course, now we are in an another era when the gulf between the rich and poor is growing and the answer seems to be more tax cuts for the rich. One blogger on Huffington Post said recently that if you dropped into our country from outer space and listened to the cries for tax cuts for the rich and the cutting of spending on the poor, you would think the problem is that the poor have too much money and the rich don't have enough.
This isn't what I usually write about and you may disagree but I thought I'd add some food for thought as we watch the fireworks on the Fourth of July.
FD
