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During the height of the Gilded Age in the late 19th century, the wealthy celebrated conspicuous consumption and immense power. Every Christmas, on Park Avenue, the well-heeled saw it as an act of kindness to treat their poor neighbors by opening their drapes and giving them a peek at what they were missing. They meant it as a kind gesture, but also displayed how out of touch they were with the vast majority of Americans. Bugs Bunny, in a 1940’s cartoon, displayed this social cluelessness by remarking, while basking in the sun on a beach, “I wonder what the poor rabbits are doing this season.”
Certainly, President Donald Trump, with his fetish for building ballrooms that his fellow citizens will never see, raises eyebrows. Indeed, he is behaving as if his campaigns never happened, proclaiming that his economy “is the best” in history. He discounts inflation, debt, and the sagging job market with a sigh and a dismissive hand, as Joe Biden before him did, and looks at financials, which have done very well, along with stocks. The markets must please those who reside in the most exclusive addresses (e.g., Mar-a-Lago).
William Jennings Bryan, the Democratic standard-bearer for president in 1896, 1900, and 1908, would grasp this situation very acutely. Given Trump’s taste for both decorative and bars of gold, Bryan’s critique is even sharper: “You shall not press down upon the brow of labor this crown of thorns; you shall not crucify mankind upon a cross of gold.” This would probably apply to cryptocurrency as well.
Cryptocurrency has served the Trump family very well. But this "turning a blind eye" to this emerging crisis is both irresponsible and dangerous. Part of it repeats the “recession” of 2008, which was fueled by easy credit, lending to consumers with low financial assets to buy houses they could not afford. The Subprime Mortgage and the irresponsible, reckless marketing of these “assets” overseas led to a financial crisis that almost brought the system down. Only a fast bailout orchestrated by Presidents George W. Bush and Barack Obama rescued Wall Street after Lehman Brothers collapsed.
This is nothing new in American history. Before World War II, the American economy benefited an elite few. Less than 2% owned stocks, and many were over-leveraged in real estate. Speculation was the rule during the “Jazz Age” in the 1920s. In rural America, many had their farms mortgaged, and many left for the cities where they had no land but wages. Rural America offered a modest life, and in hard times, it fed you. In the age of steel and steam, you could starve.
Bryan warned about this in 1896, in his campaign against William McKinley. Bryan saw the loss of rural wealth as a threat to democracy. “Burn down your cities and leave our farms and your cities will spring up as if by magic; but destroy our farms and grass will grow in the streets of every city in the country.” People without real assets, land, or money are threatened at their core.
This hints at the “Affordability” crisis, which arises when salaries do not keep pace with inflation. Both parties do not see this, being reduced to promising heaven on earth while trying to make a secure life even more perilous. World War II saved the US economy, and we have been living on fumes from that victory. Now, it has been twenty-six years since housing prices peaked in 2006 and crashed in 2008. History beckons again.