Herbert Hoover revisited

The official story of the Great Depression is that it began with the stock market crash of 1929. Wrong.

Depressions don’t instantaneously explode in a country, they creep up. The big financial crash was preceded by years of financial manipulation by Wall Street hucksters, wage declines for the majority of workers, a growing epidemic of farm losses, and malign neglect by President Herbert Hoover. Even when it came, Hoover continued to insist that the economy was fundamentally sound, that Washington should simply stay the course and let the market work its magic.

If this sounds familiar, that’s because George W is the Hoover of 2008. In April, for the fourth month in a row, the American economy lost jobs, but Bush insisted that strong action is unnecessary, noting that “only” 20,000 jobs were lost last month and boasting that the unemployment rate was still at 5 percent.

First of all, the unemployment rate misses the depth of the problem. For example, it does not count “discouraged workers”—some 400,000 people who’ve been out of work for so long that they’ve given up looking. Also, if you worked even one day at a temporary job during the month, you're counted as “employed.”

This raises the deeper flaw in job numbers, which is that they cover up the decline in people’s income. Even during the Great Depression, the vast majority of folks had jobs. But today, just as then, the hours of those jobs have been cut back, and millions of people who need full-time work are only able to find part-time jobs.

Meanwhile, as rank-and-file workers (which make up 80 percent of the workforce) see their incomes stagnate, they also see the cost of gasoline, food, health care and other basics skyrocket. When the average pay for eight out of ten Americans is not even keeping up with the cost of living—look out.