July 30, 2020

Heal the Pain

By Glenn

How do we react to pain?  Do we treat it or ignore it?  The answer to this question is at the heart of the argument between liberals and conservatives.

In October of 1929 Wall Street crashed.  The financial markets froze as speculators could not pay their loans.  Banks lost income and failed.  Bank failures wiped out the life savings of millions of Americans.

Beyond the financial markets, ordinary business lost consumers and shed jobs.  More job losses meant fewer customers.  It was a vicious cycles that seemed to have no bottom.  Millions of American suffered, losing their jobs and homes.

President Herbert Hoover was a conservative.  He believed in “free markets” or laissez-faire.  He took limited steps to alleviate the suffering.  He saw pain as a necessary motivation for Americans to get back on their feet.

Hoover also saw pain as a valuable lesson.  It created a moral hazard.  It taught right from wrong.  Pain taught individuals what not to do.  Conservatives believed that alleviating the pain would prolong the crisis because people would never go back to work as long as they were well-fed.

Unfortunately, that is not the way the world works.   Jobless Americans can’t pay rent.  They can’t buy food.  They can’t but clothes.  When they lost income, businesses lost customers.

In 1930 the unemployment rate was almost 9%.  In 1931 it was near 16%.  By 1932, an election year, unemployment was 23%.  The free market had failed to correct itself.

Not only was the personal suffering unnecessary, but it also depressed the entire economy.  Franklin Delano Roosevelt ran against Hoover in 1932 and offered a liberal alternative.  FDR promised to do something to alleviate the suffering.

Roosevelt offered a New Deal.  He would regulate big business to stop them from abusing their size in the market place.  He would create job programs to put the abled bodied to work.  He would offer immediate relief to workers with no jobs.  FDR promised to shorten the work day and week. 

FDR won in a landslide with 57.4% of the vote and 472 of 531 electors.  Americans were tired of suffering for nothing.  Conservatives predicted doom and gloom.  They argued that liberals were destroying the moral fiber of America.  Without pain Americans could not tell right from wrong.

Liberal America started to prosper once the New Deal kicked into gear.   By 1936, FRD’s reelection year, unemployment was 17%.  The New Deal had saved the free market.   Jobs returned.  Americans paid their rent.  They bought food.   They bought clothes.  Consumer spending drove more job creation. 

Americans don’t need to suffer.  No one needs to suffer.  We are all better off when we relieve suffering.  Like the Good Samaritan we need to heal our neighbor.  The rewards are great. 

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