Is it the end of the world as we’ve known it?
Who can say for sure? But as America’s second Gilded Age fissions all around us, one can sense the zeitgeist shift. If we are staring into the abyss of 1929, what do those grim times portend for us in the months ahead?
History accelerates at unimaginable speeds. Cherished beliefs and inviolable maxims are thrown overboard with hardly a farewell. So today the universal rush to embrace regulation after a quarter-century of treating it like the plague should remind us how quickly our Depression-era ancestors abandoned hoary shibboleths about laissez-faire and balanced budgets.
Rage turns into outrage. A spirit of retribution inflames popular sentiment, with calls to punish those privileged, self-regarding elites who have so badly misused their power and wealth, architects of a parasitic economy that has put the whole country in peril. It is a familiar emotional trajectory. Even before FDR took over, the Wall Street savants of the Jazz Age were getting their comeuppance, excoriated in the media and in front of Congressional investigators, pilloried for their greed, larceny, self-delusion–and, most of all, for their appalling incompetence. As then, Wall Street, so recently revered, becomes ex-communicant. The politics of retribution is parochial but full of liberating energy.
In fevered times like these, there is an urge to turn to the Hero as Autocrat. The emergency powers granted Roosevelt to deal with the collapse of the financial system were part of a general willingness to abdicate responsibility in favor of a figure of consoling authority, in his case a benign one. Soon enough, the great social movements of that era undermined this dependence. Today a long season of imperial presidential presumption and mass political passivity make the future cloudier. But the fury that greeted the Bush administration’s original design to give Henry Paulson carte blanche is heartening and suggests that the legitimacy of the old order is threadbare.
If politics is the art of the possible, then when an era comes crashing to an end what seems possible changes from moment to moment. In retrospect, FDR is often congratulated for his open-minded experimentalism. But to many back then it seemed more like he couldn’t make up his mind. That’s because the political chemistry of the country had become so volatile. The responses to today’s financial meltdown and imminent depression are likewise confused, as no one knows where the politically conceivable begins and ends. Proposals range from orthodox schemes to bail out junk at ridiculously inflated values all the way to something approaching nationalization of the financial system. That notion last surfaced during the banking crisis of the Great Depression but lost out to the less daring and more restricted remedies of the FDIC and the Glass-Steagall Act. The New Deal, in this arena as in others, was as much a story of promising roads not taken as it was one of adventurous reform.