Can you give me a dime?

As we mentioned in the pre-crisis era, if someone is pessimistic about the future economic situation, they will hesitate for a while before buying expensive goods, thinking about whether there will be enough income in the future and whether they need more leverage. With such hesitation, consumers may just suspend purchases, which will reduce demand and aggravate overcapacity.

But where is the trigger for pessimism about the future of the economy?

For the United States in 1929, the rising momentum of the stock market was interrupted.。

On September 3, 1929, the Dow reached its peak. By early October, however, the stock market was on a downward trend. Although there are some ups and downs in the middle, investors are getting more and more uneasy.

The accumulated unease finally broke out on October 24, when the stock market fell sharply at the beginning of the day, even though several major New York banks formed a "rescue fund" to rescue the market.The stock market fell as much as 12% on that day, which is called "Black Thursday".

In theory, the stock market crash will only have a direct impact on a small number of Americans. But more people will take a pessimistic view of the future economic performance when they see the stock market fall.

Many Americans have cut back on shopping.

In the months after the stock market crash, the number of registered purchases of new cars was 1/4 lower than in SeptemberConsumption of durable goods fell by 20% in 1930 compared with 1929.

When consumption falls, companies will go bankrupt or lay off staff, and more and more people will lose their jobs.

In the previous years of prosperity, Americans believed in the "ethics of success", that is, as long as you work hard, you can live a good life. On the other hand, if a person does not have a good life, he is a person who does not work hard or is incompetent, which is shameful. This ethics seemed to be taken for granted at that time, because too many people struggled to become the so-called "middle class", becoming decent and well-off. They will naturally think that the unemployed are lazy and that they will not lose their jobs if they are capable and hardworking.

The United States also has a strong tradition of small government, which meansThese new middle classes will think that the government should not vigorously help these "unemployed slackers".

Obviously, they do not understand a truth: a person's fate, of course, depends on self-struggle, but it also takes into account the process of history. Both natural and social laws can mercilessly crush ignorant and powerless human beings.

Speculators in the stock market were the first to be hit by the Great Depression. some people just bought expensive cars and had to sell them at a low price of $100 in October to make up for their losses in the stock market.

The impact of more people is not so fast, but similar to warm water boiled frogs. After all, COVID-19 's highly contagious disease took more than two months to infect millions of people in the United States.The consequences of the Great Depression clearly spread more slowly and quietly. Many people just know that the economy is bad and lose their jobs inexplicably after a period of time.Entering the confused stage of unemployment, I don't know what happened, and I don't know who to blame, as sung in the popular song "Brother, can you share me a dime" in the United States at that time:

They once told me that I was building a dream

So I followed the crowd.

As long as there is land to grow, or a gun to carry

I'm always there ready to work...

I used to build a railway that could make trains go fast.

Run up and it can race against time.

I built the railway, but now it's finished.

Brother, can you give me a dime?

This song has spread, which shows that many people are wondering why they work hard and end up asking for a coin.

It is shameful to be unemployed

Based on the above-mentioned "ethics of success", many people can't stand losing their jobs. They think that unemployment is a shameful thing and their own failure.

At that time, many middle-class families had only adult men to work to support the family, and the hostess often did not work, but worked as a housewife at home. If the man loses his job, the family's source of income becomes a problem. The look that a family looks forward to will deepen the frustration of unemployed men. They can only walk up and down the street day by day, trying their luck to find a job-often not. Some of the middle class in New York can't find a job, so they can only wholesale Apple Inc and sell them on the street, hoping to take a chance to make some money.

At first, these people were also ashamed of receiving relief. They mainly blame themselves and will not think of delegating too much to others. One unemployed person said in an interview:

"if you don't have a job, you can't be a man. "

And the United States has always adopted a laissez-faire policy towards the economy.Hoover, the then president of the United States, also believed this.

At the beginning,Hoover also expects people to help each other spontaneously to tide over the crisis.. This is also the usual pattern in American history, and before entering politics, Hoover was also involved in charitable work, organizing American citizens to evacuate overseas Chinese from war-torn Europe and raising relief for war-torn Belgium. He believes that this approach is feasible and does not require the government to directly provide relief to the unemployed.

Therefore, at the beginning of the crisis, people up and down felt that laissez-faire was feasible, but they relied on people to help each other and did not think much about the government's direct intervention in the economy.

So, during the deepening of the Great Depression, an American went something like this:

A man lost his job. He is the source of income for his family, he is ashamed of losing his job, and the burden of supporting his family makes him want to find a job early. I thought I would find a new job soon, but it was very difficult to find a job, so the family had to draw on their savings first.

When his savings were used up, he borrowed money from his friends and relatives, but they were in the same state as him, and they soon had no money to lend him.

He has to take credit at the grocery store, and the landlord may postpone the collection of rent, but sooner or later he will have to pay what he owes.

Many such people can only turn down their faces and ask for relief. Some relief comes from non-governmental mutual aid organizations, such as the church, the Salvation Army or the Red Cross. Some come from the government, but the public relief system can only support a small number of poor families during the boom.However, too many unemployed people have led to the collapse of the relief system.

Others will wander around the city, rummaging through the trash cans or waiting for leftovers outside the restaurant. Some people can't find a job in the street, so they have to try their luck in other places, but they never come back. They joined the army of homeless people, when nearly 2 million people ran to trucks and wandered from city to city, looking for jobs or food, and became homeless.

Homeless people camped out and built shacks on the edges of cities and landfills. This kind of shack gathering area is called "Hoover Village".

The tragedy of deflation

The tragedy above, from the perspective of macroeconomics, is a process of deflation.

At first, the United States did not take decisive action to interrupt the deflationary cycle, so after the decline in purchasing power, production decreased and employees lost their jobs. The increase in unemployment has further reduced purchasing power.

The overall result is that America's GDP fell by 25% in the three years from 1929 to 1932-and this happened in peacetime. Between 1929 and 1933, the consumer price index fell by 25 per cent. Total agricultural income fell from $12 billion to $5 billion in four years.

The dust of the times falls on the heads of Americans and becomes a mountain.2 million people have become homeless, which means more people are out of work. Indeed, in 1932, the best part of the Great Depression, the number of unemployed in the United States reached 11.5 million, equivalent to 1/4 of the American labor force at that time.

1/4 of the working population is unemployed, which is unprecedented in the not-so-long history of the United States, but it is finally coming-- social isolation caused by the epidemic this year.The number of unemployed in the United States has reached 40.767 million in the past ten weeks, more than at any time in history.It is also equivalent to 1/4 of the US labor force.

Considering that the surge in unemployment in the United States is caused by the social isolation caused by the epidemic, as long as the society is reopened, the number of unemployed will decline, so if we look at unemployment alone, the situation is not the worst, at least the people have something to look forward to.

People during the Great Depression were even more desperate because they didn't know how long unemployment would last. At that time, someone asked Keynes, a famous economist, if there were any other historical periods comparable to the Great Depression. Keynes replied:

"Yes, it was the Dark Ages of the Middle Ages, and it lasted four hundred years. "

If the Great Depression really lasted 400 years, there would probably be no America.

In the first few years of the Great Depression, most Americans were shocked and then confused. For those who still believed in the "ethics of success", it was difficult for them to accept their own unemployment, but they did not take the initiative to blame others. It's even hard to accept the idea of government relief.

In fact, the United States is still a country that advocates small government and liberalism after the end of the Great Depression.Believe in the American Dream of personal struggle, believe that there are many opportunities, and that everyone should be responsible for their own circumstances.. In this social environment, unless it is clearly targeted by the avatar of the government (such as being pinned down by the iron knee of the police), one believes that one's fate is bitter and one cannot blame the government.

But during the years of the Great Depression, some people changed their minds and began to resist.

In 1932, for example, World War I veterans took action, demanding that their retirement compensation be paid in advance. In June 1932, tens of millions of veterans marched into Washington, set up a camp and planned not to stop until they reached their goal.

You know, in an era when there was no social media, the exchange of information between people was not smooth.It is already a large-scale demonstration to be able to gather thousands of people to Washington.

And veterans who took part in World War I were generally disciplined and patriotic and organized self-picketing agencies to expel the communists so as not to be criticized for handing knives to foreign countries.

But even in the face of such disciplined protesters, Hoover did not take appropriate measures. Hoover could not have the money to pay the veterans' retirement compensation, but he did not fully communicate with the veterans. Finally, after the conflict between the police and veterans intensified in July,Hoover used the army to disperse the veterans.

Hoover was criticized by the domestic media for this move, and there was no Twitter for Hoover to defend, rally supporters or blame FAKE NEWS, so his reputation was inevitably tarnished.

New script

There have been riots in many cities in the United States recently.

The cause was that an African-American man was pinned down by police in Minneapolis and suffocated a few minutes after the police put their knees on the back of his neck.

Such cases of police brutally enforcing the law against African-Americans occur from time to time in the United States. There have been many similar cases before, but also African-American parades or riots, African-American stars show their support, and it will be over. After all, everyone still has work, and they have to go to work after the parade.Now that the job is gone, the people who witnessed the tragedy at home have nothing to do and take to the streets on a large scale, making this riot much louder than before.

Some people may ask why the COVID-19 epidemic killed more than 100, 000 people in the United States, but people did not make trouble. Only one African-American died, and protests broke out in the United States.

Judging from the situation during the Great Depression, Americans believe that the government should not be held responsible for their situation, that losers in work and life should find their own reasons, and that Americans have their own stubbornness.

As a doctor who worked in a free clinic during the Great Depression recalled:

The poor can get some medical services because they can go to free pharmacies to get medicine; the rich can enjoy good medical services because they can afford to see a doctor. The huge middle class does not have access to any medical services, and their living conditions are no different from those of the poor. But this kind of status person, it is very difficult to accept charitable relief. Every day. People fainted on the streetcar. People will send him to a free clinic, but they won't ask him any questions. Everyone knows what's going on. He fainted from hunger.

People often faint from hunger on the bus, and now some people are often infected with COVID-19 and turn into severe illness or even death, somewhat similar, are very terrible pictures. But it's hard to be an outlet for Americans to vent their anger.

However, over time, people always doubt the "ethics of success".One day, some people will ask the government for an explanation.. During the Great Depression, it took nearly three years for veterans to go to Washington to ask for retirement compensation. Maybe it will be shorter to figure this out now that social media is more developed?

Americans are more afraid of government evil than government inaction. Especially African Americans.Has long been treated unfairly by the American judicial system.As long as African-Americans are brutally enforced to death, there will be demonstrations.

However, the COVID-19 epidemic has become a background board and an accelerator. As a result of COVID-19 's widespread unemployment, more Americans took part in the demonstrations, which exacerbated the situation.

What is worrying is that in the United States, where the epidemic is far from over, large-scale mass demonstrations broke out in many places.I am afraid the risk of further spread of the epidemic will be greatly increased.. Within a week or two, it is not impossible for the number of COVID-19 infections to increase rapidly.

I thought Trump would deliberately find a way to boost the US stock market until the November election, after which a new economic crisis could occur. What I didn't expect isBefore the economic crisis, an epidemic caught the United States by surprise.To complicate more things-it seems that history does not like simple repetition.