There are very few Americans still alive who heard President Franklin D. Roosevelt, in March 1933, address the nation as he was being sworn into office. Which is why many Americans today believe that when FDR famously said, “The only thing we have to fear is fear itself,” he was talking about World War II. But Roosevelt said that long before Hitler had even fully consolidated his own power in Germany.
Instead, the fear—and the war—was here in America. He was speaking of the Great Depression.
The week of his inauguration, every state in the country closed their banks. The federal government couldn’t make its own payroll. A quarter of working-​age Americans were unemployed— some measurements put it at a third— and unemployment in minority communities was off the scale.
While Herbert Hoover, when campaigning against Roosevelt in 1932, had denied there was hunger in America, and said, “Even our hoboes are well fed,” the truth was that the single largest “occupation” at the time among Americans was “scavenger”: people following food trucks and trains, catching the bits that fell off, or doing what we today call “Dumpster diving.”
It was so widespread that farmers guarded their farms with shotguns. Every night when restaurants dumped their uneaten food in trash cans in back or side alleys, crowds gathered to pick through, and often fight over, the leftovers.
Roosevelt spoke bluntly about that situation in Great Depression America.
“Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone.”
Dissatisfaction with our economic and political systems had reached such a height that machine guns guarded the Capitol and White House. “Hoovervilles”— tent cities of homeless people—had sprung up in every city of America. Bankers and the wealthy elite traveled with elaborate and heavily armed security details, and it was no longer safe for John D. Rockefeller to repeat his earlier publicity stunt of going out onto a New York City street to hand out shiny new dimes to beggars.
This was America during the last Great Crash, a crash that within a decade led to a world war killing more than 60 million people.
Eighty years later, we are well into the next Great Crash, which future generations will call the Crash of 2016. And this one could be even worse than the last one.
There are remarkable similarities between the coming Crash of 2016 and the last Great Crash, which began on Black Tuesday in 1929.
In fact, there are similarities between both these crashes, and the other two crashes in American history that both led to horrific wars. The first was the economic disaster of the late 1660s to the early 1770s that led Britain to pass (among other things) the Tea Act in 1773, sparking the Boston Tea Party and the Revolutionary War. The second was the Great Panic of 1857, which preceded the Civil War.
It was roughly eighty years from the Revolutionary War to the Civil War, and eighty years from the Civil War to the Great Depression and World War II. And here we are, eighty years after that great disaster. It takes about eighty years for those who remember to thoroughly die out.
We have to see these similarities, to hear their stories, and to get a handle on how to move around them if we hope to mitigate the damages of the Crash of 2016.
The Great Forgetting
For one, each Great Crash is separated by four generations (there’s those eighty years).
Arnold Toynbee and others, over the millennia, have pointed out that when the generation that remembers the last Great War has died out, a nation is set on course—some would say doomed—to have another war. While the horrors of war are forgotten, the monuments and “heroes” of war are everywhere.
The same is true of the death of the last person remembering a Great Crash.
Daniel Quinn popularized the phrase “the Great Forgetting,” and it’s true not only of civilizations but of generations as well. Our memories— as a culture—are largely defined by the practical memories of those who participate in media and government, mostly people from their thirties to their sixties. So, at the most, we as a popular culture remember fifty or so years of history at a slice.
My grandfather was a socialist, my dad a Republican. I’m a progressive.
My grandfather, in the first few decades of the twentieth century, had no recollection of a crisis during a previous “socialist” time, and so at one time thought the Soviet experiment might even work out well. My dad, born in 1929, had no memory of a crisis during the administration of a Republican; in fact, his experience of Eisenhower’s presidency had been that of a Great Prosperity. And, born in the 1950s, I don’t remember the battles or challenges that my dad saw FDR face.
There are great cycles to all of history, including American history. And this cycle rolls forward as each new generation comes to power without personal memory of the mistakes previous generations made, and without memory of the solutions previous generations employed.
Authors William Strauss and Neil Howe suggested, in their seminal 1997 book The Fourth Turning, that the United States would, in the first decades of the twenty-​first century, once again enter the catastrophic phase of a historic cycle that happens every fourth generation (roughly every eighty years): an economic collapse followed by a great war.
It was a bold prediction, given the Clinton Prosperity in the late 1990s. But it was prophetic.
Less than a decade later, in the fall of 2006, the Federal Reserve Bank of Saint Louis—the part of the larger Fed that compiles housing statistics—noted that housing starts dropped 14.6 percent that month, bringing the total for the twelve-​month federal budget year of October‑to‑October to a 27 percent crash. To make matters worse, building permits were also in free fall, having dropped 28 percent year‑to‑year at that point.
This was the housing bubble bursting, which triggered the financial crisis of 2007–08.
The Great Forgetting had again descended on the nation, and eighty years after Black Tuesday 1929, the United States was in two full-​scale wars and constructing a massive worldwide war machine built on Predator drones.
In his First Inaugural Address in January 2009, a young President Barack Obama spoke, just as FDR had four generations earlier, to a nation again gripped by an economic crisis.
It was a balmy 42 degrees in Washington, DC, the day Franklin Delano Roosevelt was sworn in nearly eighty years earlier in the midst of a Great Depression.
But as if the political and economic world had grown colder and harder, it was only 28 degrees on Barack Obama’s Inauguration Day, with those on the National Mall exhaling white wisps into the freezing air.
I stood about a hundred feet from President Obama as he was sworn in. Just behind him, George W. Bush rolled his eyes and made silly, exaggerated “flipper” applause motions through much of the speech. Dick Cheney, in a wheelchair and covered with a blanket, barely twitched. Their wives sat behind them.
To my left were the assembled members of Congress and the Supreme Court, in front of me the new president, and to my right was the international press corps. In front of the president were nearly two million people, an ocean of humanity that stretched from the Capitol, where we stood on a second-​floor balcony, down the National Mall to and beyond where the Washington Memorial pierced the sky.
He began by talking about how the words dictated by the Constitution to swear a new president into office had “been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms.”
It was the perfect oratorical device, because that very month over 800,000 Americans had lost their jobs, and over a half million had come to the brink of losing their homes. The stock market had crashed, banks were in a crisis worldwide, and two foreign wars were sucking us dry and devastating our image around the world.
“That we are in the midst of crisis is now well understood,” President Obama said. “Our nation is at war against a far-​reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some but also our collective failure to make hard choices and prepare the nation for a new age.
“Homes have been lost, jobs shed, businesses shuttered. Our health care is too costly, our schools fail too many, and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.”
“These are the indicators of crisis, subject to data and statistics,” Obama continued. “Less measurable, but no less profound, is a sapping of confidence across our land; a nagging fear that America’s decline is inevitable, that the next generation must lower its sights.”
The cycle had come around again. While the last Great Crash is preserved in our history books, newspaper archives, and old film reels, very few people alive actually remember it, thus setting it up to happen again.
But just as Roosevelt had done in his first inaugural by saying, “The people of the United States have not failed,” President Obama inspired hope on that day of crisis.
“Today I say to you that the challenges we face are real, they are serious and they are many. They will not be met easily or in a short span of time,” he said. “But know this, America: They will be met.”
Those final four words brought an eruption of applause from many of the members of Congress, and a roar from the three million people stretching down the National Mall all the way to the Washington Monument. Reporters near me leaned forward in rapt attention.
Sounding like a modern-​day Franklin Roosevelt, President Obama pressed on.
“The state of our economy calls for action: bold and swift. And we will act not only to create new jobs but to lay a new foundation for growth.
“We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.
“We will restore science to its rightful place and wield technology’s wonders to raise health care’s quality and lower its costs.
“We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age.
“All this we can do. All this we will do.”
The reality, however, remained the same. There were few still alive, when Obama was sworn in, who remembered Franklin D. Roosevelt’s response to the Great Depression.
And, thus, as soon as his speech was over, the president’s hopeful and idealistic rhetoric ran headfirst into the Great Forgetting, guaranteeing the Crash of 2016.
But what, exactly, is it that we collectively forget every fourth generation that repeatedly threatens the survival of the United States?
The Economic Royalists
After the last Great Crash, FDR understood he was up against more than an economic crisis. He was also up against a counterrevolution, which had caused the Great Crash and was unabashedly seeking to reclaim the power of our government and economy that they’d held for over a decade. They were America’s plutocracy—the wealthy bankers and industrialists who put their own personal enrichment ahead of the well-being of the nation with disastrous results.
In his First Inaugural in 1933, FDR alluded to the “rulers of the exchange of mankind’s goods” who had “failed.”
He told the nation, “Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.”
He added, “True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit, they have proposed only the lending of more money.
“Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence.
“They know only the rules of a generation of self-​seekers. They have no vision, and when there is no vision the people perish.”
Roosevelt understood that while genuine kings and theocrats had been pushed to the fringes of the world in the century and a half since the American Revolution, the forces of plutocracy—economic rule by the very wealthy—hadn’t really gone anywhere. And they’d been running amok during the previous decade.
By 1936, Roosevelt had a name for them: the “Economic Royalists.” Eight years later, against the backdrop of World War II, FDR’s vice president, Henry Wallace, referred to these plutocratic forces as “Fascists.”
During our Revolution, they were called “Loyalists” and “Tories.”In the early days of our new nation, they eventually called themselves “Federalists” and were led by America’s second president, John Adams, and our first treasury secretary, Alexander Hamilton.
Early on, they were rather benign; the real cancer came as the nation became richer.
By the last half of the nineteenth century, during the Gilded Age in America, the newspapers called them the “Robber Barons.”
Today, these forces of the very wealthy are often simply referred to as “the 1 percent” (even though they actually represent a much smaller number than that—a tiny fraction of the top 1 percent of Americans, economically).
Regardless of their name, their rise to power has always been a harbinger of impending collapse.
Their greed made the War of Independence inevitable. They pulled the strings of both the North and South during the Civil War. And they provoked the stock market crash of 1929 triggering the Great Depression. In fact, our history is one of constant struggle against this cultural infection.
And while iconic figures and people’s movements have arisen throughout history to confront these Royalists, there always comes a crack in the struggle when the Great Forgetting takes hold. And the Economic Royalists jump into this opening to take the reins of power and pillage the nation into collapse.
American history proves this point.
From the book THE CRASH OF 2016: The Plot to Destroy America--and What We Can Do to Stop It. Copyright (c) 2013 by Thom Hartmann. Reprinted by permission of Twelve/Hachette Book Group, New York, NY. All rights reserved.
