The Great Depression and Today’s Financial Crisis

On March 11, a panel consisting of professors Andrew Moore (history), James Mahoney (philosophy), Jonathan Acuff (politics), and John Romps (economics and business) discussed the Great Depression relative to our country’s current economic crisis.

Professor Romps, the event’s organizer, dispelled common misconceptions about the Great Depression, explaining that it was actually a downturn beginning in early 1929, not just a reaction to the stock market crash. He discussed the belief that everyone in America was destitute; in actuality, while many suffered (27%-30% unemployment), about 70% of Americans still had jobs. About 60% of Americans never lost their jobs for the whole span of the 1930s. He described the common debate of the 1930s–recovery vs. reform–a debate that resurfaced throughout the event.

Professor Moore focused on the New Deal and the Roosevelt Administration. The New Deal, he argued, did not end the Depression, and its primary importance was to change the relationship between government and the people. FDR thought government should help individuals by promoting economic stability and security, and believed the best way to resolve the crisis was to provide a sort of safety net. Another focus of the New Deal was to help businesses by eliminating competition and encouraging cooperation with legislation like the National Industry Recovery Act. FDR wanted people to look to the government for help instead of charities or churches, especially because those resources were depleted by the time he took office.

Professor Acuff discussed international politics, stating that the first global economic decline since 1945 was in fact 2009. Many of the causes were similar, such as enormous overheating of the economy because of problems with housing and Wall Street. A few more similarities he discussed were both events saw major pressures on the capitalist structure, Europe waited for the United States to act, and there were worldwide feelings of political instability. Acuff noted differences as well; the level of global trade is much higher now than in the 1930s, and this interdependence is brought on by many more international organizations than politicians could have imagined. The tools are better now, Acuff stated, and we now know more about the problems at hand.

Professor Mahoney discussed the relevance of philosophy in the Great Depression, reflecting specifically on what is happening in philosophy as a theoretical discipline. The sense of fear that emerged during the 1930s produced a distrust of reason. He said this idea of “giving up on reason” forced humans to seek stability and security. Mahoney cited novels, movies, and documentaries from the period that really explain the incredible fear people had during The Great Depression. He closed by describing 1930s philosopher John Dewey, who gave hope to people who worried about the collapsing economy; Dewey believed if one used scientific reasoning and applied the ideas in a systematic way, there was a chance one could have new visions of what constitutes reason.

In the questions that followed, the themes of government intervention and the global economy continued to resurface. Professor Romps believes the current situation is beyond the point where America can’t expect the government not to step in. “It is so dangerous that to expect the government not to intervene is preposterous. They have to.” Professor Acuff said that the United States’ recovery impacts global recovery. He stressed that although there were some positive results of a bad global economy (better relations with foreign nations, more interdependence), today’s problems in the United States create an accidental ripple effect. Acuff and Romps agreed that if the United States doesn’t recover, the world doesn’t recover.

Photo credit: Depression era bread and milk line