Bernanke Knows What We Have to Fear
It comforts me that Ben Bernanke, chairman of the Federal Reserve Board and an architect of the financial bailout plan the House rejected yesterday, is a specialist in the Great Depression. This, of course, was the economic calamity that beset the United States from 1929 to about 1942 and ended only when America went to war. What stopped the Depression was a worldwide bloodbath.
Anyone who knows the history of those awful times has to be chastened. The Depression was not, after all, simply an economic crisis. It was also a political and cultural one. It contributed to the rise of totalitarian movements abroad -- both in Europe and Japan -- and some pretty ugly political movements here as well. These things are hard to measure, but American democracy's closest call probably came during the Great Depression.
The rhetoric in Washington seems oblivious to history. It talks only of financial matters, and it searches, as any mindless politician must, for culprits. Greed is blamed, as if it is something new or controllable, and the entire problem is discussed as if failure will do nothing but endanger some rich institutions and their equally rich managers. The Great Depression teaches otherwise.
Throughout Europe during the Depression came the rise of fascist parties -- the Nazis in Germany, the Union of Fascists in Britain, the Croix-de-Feu in France, etc. Elsewhere, communist parties were emboldened. People were desperate, and they looked for desperate solutions.
It is hard to envision anything like this happening again. But why not? The world is a smaller place than it was in 1929. We have become globalized, financial markets intertwined as never before. During the Depression, nations moved to close their borders to refugees. How could more people be let into a country -- any country -- when those already there were out of work? America, too, clamped down on refugees -- even though many of them were fleeing for their very lives. In 1939, the St. Louis, a ship carrying Jewish refugees, went from Germany to Cuba and back to Europe because its passengers were not welcome anywhere on this side of the Atlantic.
It is harder still to envision anything like that happening today. But, again, why not? The zeitgeist changes instantly. Less than two years ago, the world was awash in credit and then, within months, there was none to be found. Credit had dried up. The housing market plummeted. Mortgages turned out not to be worth the paper they were written on -- not that anyone could find the paper, anyway. Circumstances were suddenly different. If circumstances become even more different, who knows what could happen.
Much has been made of the so-called culture wars here in America. The McCain-Palin ticket represents one culture and Obama-Biden another. But this clash is not about culture per se -- otherwise, how could the mother of an unwed pregnant teenager be the conservative while her opponents, as conventional as Saturday night at the VFW, are the liberals? No, it's really about outlook. Barack Obama's people feel they have control over their lives. Sarah Palin's people do not have a similar confidence.
This is why the Republican National Convention made war on the media. This is why Palin frequently has referred to "the pollsters and the pundits." These were the hidden manipulators of the culture and the economy, part of the often-invisible elitists who made it so bad for everyone else. They controlled the culture, the smut that came into one's home on the TV set and what was playing at the multiplex. They owned the banks and the newspapers and the TV networks -- and it didn't matter that their name could be Rupert Murdoch and they could be deeply conservative. As Don Quixote knew, "facts are the enemy of truth." Hard times are hard on truth.
The Great Depression was not just a period of wholesale unemployment and incredible poverty -- of bread lines and apple-peddlers and women selling brief intimacy for 10 cents a dance. It was also the period of Hitler and Mussolini and, in this country, of Huey Long and Father Charles Coughlin, and the belief among otherwise sane people that communism was the remedy for what ailed us. An economic crisis is like war. It's impossible to contain. It affects everything it touches.
Ben Bernanke knows all this. He might focus on the raw numbers of the Great Depression -- "I see one-third of a nation ill-housed, ill-clad, ill-nourished," Franklin Roosevelt said -- but he would also have to know the social and cultural ramifications. You can, if you want, say the bailout program is about the future. But it's really about the past.
Read more from Richard Cohen at washingtonpost.com's new opinion blog, PostPartisan.