my view

Caught in the crossfire

By JIM STRATTON
Posted 12/16/20

I had a friend who once said, “I don’t know nothing and I’m glad, because it means I can’t be wrong.”

I know something, and I’m not wrong. I know that the virus …

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my view

Caught in the crossfire

Posted

I had a friend who once said, “I don’t know nothing and I’m glad, because it means I can’t be wrong.”

I know something, and I’m not wrong. I know that the virus has created divisive debate about government, politics and the economy, a debate that frustratingly has ended friendships and shattered families. Yet, the debate has to be had.

My view here is on the economy. I think most people don’t understand it. I’ve had some reason to think about it, having opened and run several small businesses over a period of 46 years and having participated in local city government, as well.

The crossfire nearly always concerns how much, or little, government should intrude into the business sector. Like others who fret governmental oversight, I’ve had my share of annoying inspections—yet I’m glad we never gave anyone dysentery. My view is that a responsible and carefully supportive government is one of the most important structures for maintaining a free society and a capitalist economy.

That’s an opinion, not a fact, but history seems to agree with me. Many decades ago, European capitalist systems suffered repeated crashes very similar to our Great Depression, all caused by a laissez-faire system that permitted businesses to do anything they wanted. A result is that the Conservative Party of Great Britain is more “liberal” than our Democratic Party.

It’s easy for a pure capitalist economy to go wrong. Here’s a simple example. Oven manufacturers do very well until everyone owns an oven. Sales decrease and oven manufacturers let workers go. These workers, broke, can’t buy new refrigerators, so fridge companies start firing staff. Soon, when a fridge or an oven breaks down, the unemployed can’t afford to buy either, and more workers are fired. It’s like dominos.

I won’t even get into the theory of the expanding economy, that if a pure capitalist system cannot expand—find new markets—it will inevitably contract. It’s even more draconian.

But government can step in: unemployment insurance, Social Security. These safety nets put enough money in pockets for an economy to survive a mild recession. But extrapolate that to a nation ravaged by disease, with millions unemployed, and it gets scary.

Mild recessions, even depressions, can give an advantage to those lucky enough to have wealth or position. A million-dollar yacht can suddenly plummet in price when the owner’s company tanks and he needs to sell. That can be your car, your house, even a company you work for. Someone with bigger pockets gets the bargain.

In high school, I worked for the richest man in town, the “Squire,” tending his gardens and horses. He commanded political power and respect. Not until years later did I learn his history. He was president of the local bank in 1933, and when Depression banks closed, he took out all the cash and mortgages and locked the door. He foreclosed on now-penniless depositors and soon owned a third of the town.

Good businessman, they call him decades later. I could find another description.

Returning to the Great Depression, skeptics perpetually scoff that it was World War II that ended our depression, not FDR’s New Deal, as people frequently say. And the skeptics are right. The New Deal, against entrenched opposition, kept people barely alive, but the massive government stimulus that was tanks, guns and warplanes for the country’s defense was what put people back to work.

Those Yankee dollars also created a modernized industrial complex for America’s future economy. It was probably the greatest unintentional stimulus to private enterprise in history. But it doesn’t take a world war to stabilize a tanking economy. Today, it could be a war against rotting infrastructure or global warming. Believe me, it’s better than another Great Depression.

The skeptics are right about World War II, but they haven’t learned anything. Regrettably, they still believe they can’t be wrong.

Jim Stratton has been a news reporter, columnist, district leader and community board chair in Manhattan, and also a bar owner. After two decades as a part-time Narrowsburg resident, he now lives here full-time with his wife, Cass Collins.

government, economy

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