July 28, 2011
A guest post from (Roughly) Daily…
The Economist reports that participation in the U.S. Food Stamps program– designed to insure that poor Americans have enough to eat– had, by this past April, reached almost 45 million, or one in seven Americans.
At the same time, Reuters reports that In 11 states, lotteries provided more revenue than the state corporate income tax in 2009… The Rhode Island lottery netted the state more than $3 for each dollar of state corporate income tax in fiscal 2009.
click image above, or here, for larger version
As we strain to think of even more regressive ways to raise revenue, we might recall that it was on this date in 1932 that General Douglas MacArthur, on the order of President Herbert Hoover, led two regiments and six tanks against the Bonus Marchers in Washington, D.C. The Bonus Army was a group of 43,000 marchers– 17,000 World War I veterans, their families, and affiliated groups– who gathered to demand cash-payment of the certificates they’d been issued by the government at the end of World War Two as a bonus for their service. MacArthur’s cavalry charged the protestors’ camp, and his infantry entered with fixed bayonets and adamsite gas, an arsenical vomiting agent, evicting veterans, families, and camp followers.
The Bonus Army incident proved disastrous for Hoover’s chances at re-election; he lost the 1932 election in a landslide to Franklin D. Roosevelt.
Shacks that members of the Bonus Army erected on the Anacostia Flats burning after the confrontation with the military (source)
Filed in Economic, Political, Scenario Planning, Social
Tags: Bonus Army, Bonus Certificates, Bonus Marchers, corporate tax, corporate tax revenue, Depression, Douglas MacArthur, Food Stamps, Franklin D. Roosevelt, Franklin Roosevelt, Great Depresion, Herbert Hoover, lotteries, state lotteries, welfare, World War I
June 29, 2010
Crowd at New York’s American Union Bank during a bank run early in the Great Depression.
The Bank opened in 1917 and went out of business on June 30, 1931. (source)
As Lateral Thinking reports, there’s an uncomfortable– if not indeed, an eerie– resemblance between the events of the early 30s and today:
As we have said many times lately, history rhymes… Today’s world looks very much alike the 30s… See what David Rosenberg has to say about it:
“DARING TO COMPARE TODAY TO THE 30′S
Coming off a crash (’29) and rebound (’30); aftermath of an asset deflation and credit collapse banks fail (Bank of New York back then, Lehman this time around); natural disaster (dust bowl then, oil spill now); global policy discord (with the U.K. then, with Germany now); geopolitical threats; interventionist governments; ultra low interest rates (long bond yield finished the 1930s below 2%); chronic unemployment (25% then, 17% now); deflation pressures; competitive devaluations; gold bull market (doubled in Sterling terms in the 30s); debt defaults; sputtering recoveries and rallies; onset of consumer frugality.“
Add to that the growing concern over the sanctity of foreign debt (as remarked by, e.g., The Bank of England)… At the very least there’s reason to dust off those concerns about a double-dip recession– and to be careful to recall that, while inflation is the demon we’ve fought these last several decades, deflation lurks still. (C.F. here and here.)
UPDATE, JUNE 30: David Leonhardt of the New York Times in a similar vein…
The Bureau of Labor Statistics reminds us that it’s smart to stay in school:
But as Calculated Risk reports, while unemployment among the best educated is still lowest, it’s increased as much in percentage terms for them during this current recession as for any other group.
One notes that all four groups** were slow to rebound after the 2001 recession– not an encouraging reminder if one is hoping for a brisk employment-led, consumption-fueled recovery this time around.
But in some ways more striking is a difference we might expect, but that hasn’t yet emerged. Calculated Risk:
I’d expect the unemployment rate to fall faster for workers with higher levels of education, since their skills are more transferable, than for workers with less education. I’d also expect the unemployment rate for workers with lower levels of education to stay elevated longer in this “recovery” because there is no building boom this time. Just a guess and it isn’t happening so far … currently the unemployment rate for the highest educated group is still increasing.
Clearly, from an individual’s point-of-view, it’s still smarter to get more education than less. But the perturbations of past periods remind us that the gearing between between academic degrees and financial success isn’t always perfectly tight… Indeed, those with sharply-defined professional credentials in fields– e.g, finance– that are unlikely even in the intermediate term (if ever) to recover their bubble-fueled growth rates, may find their advanced degrees at best unhelpful; at worst, downright prejudicial.
Economic recovery and growth will be driven to some large extent by innovation; that innovation will create new– and new kinds of– jobs. Looking even just five years out, much less ten, one has to admit that it’s just not possible to predict what these emergent jobs, nor their requirements, will be. (Consider, e.g., the hottest topic– and job category– in marketing/advertising these days: “social media marketing”… which wasn’t even a glimmer a decade ago, and was just being born five year ago.) This is a challenge for those new to the work force, who have to wrangle the product of their schooling and their personal experience into a shape that can fit the entry-level positions they seek. It is a much bigger challenge for those mid-career who find themselves needy of making a move: these more mature folks have not only to learn new fields, they also have to re-direct the considerable momentum of perception and habit that characterized their old– and they have to do those things, usually, in ways that justify salaries way north of entry-level.
All of which underlines for your correspondent the extraordinary value of a liberal arts education. When one is faced with a “working adulthood” that is one transitional challenge after another, no skill is more valuable than the capacity to adapt. And no capability is more central to that adaptation than the ability effectively and efficiently to learn.
This is precisely what, at its core, a liberal arts education is about: learning to learn.
There are many, many other reasons, rooted in personal and societal benefits, to pursue a liberal arts education, and top support a strong foundation of liberal arts in higher education. But the lessons of the last couple of years– indeed, of the last several decades– suggest that the economic rationale is plenty strong as well…
And besides, it’s fun.
* “Education is what remains after one has forgotten everything he learned in school.”
- Albert Einstein
** To put these cohorts into perspective, the Census Bureau suggests that, of these folks “25 yrs. and over” (in 2008):
- 13.4% had less than a high school diploma.
- 31.2% were high school graduates, no college.
- 26.0% had some college or associate degree.
- 29.4% had a college degree or higher.
UPDATE: Reader JK directs our attention to another treatment of the data, in the NY Times. As he suggests, even more dramatic.
Filed in Economic, Political, Scenario Planning, Social
Tags: 1933 Banking Act, Albert Einstein, Bank Holiday, Banking Act of 1933, Banking Holiday, Bureau of Labor Statistics, Census Bureau, Congress Federal Reserve, Depression, earnings, economic crisis, economic recovery, education, Emergency Banking Act, employment, FDIC, Federal Deposit Insurance Company, Franklin Delano Roosevelt, Great Depression, higher education, income, liberal arts, liberal arts education, New Deal, professional education, Recession, Unemployment, unemployment rate