As I write this, the video monitor in the seat in front of me says that I am 39,000 feet in the stratosphere, somewhere over west Texas, headed back home to south Florida after several days in southern California. I've been attending a meeting of several hundred persons and speakers, all gathered to discuss possible living offshore.
Antiquated American Airlines, (unlike JetBlue when I flew west last week), doesn't provide live television feeds, so for almost five hours I'm insulated from the Wall Street nose dive and, what I must I assume, is more bad news from world bourses. This elevated isolation allows time to think on the eternal verities, divorced from the momentary brutal realities of the current economic situation.
At the meeting I attended an alarmed person asked me last Friday if I could arrange for them a Swiss bank account by next week. I explained that, while I could provide contacts, it would take longer than that. I also told him that Swiss minimum deposits ran to US$1 million. "No problem," he said. "I just want to get my money out of an American bank as fast as possible."
Wrong!
Back in the midst of the really Great Depression (circa 1932), George and Ira Gershwin reminded us in the musical "Of Thee I Sing" that some things are more important even than economics: "Who cares what banks fail in Yonkers, as long as you have the kiss that conquers?"
American Sage
Back then the late, great American humorist, Will Rogers of Oklahoma, Broadway and Hollywood, wryly suggested: "We'll be the first nation in the world to go to the poor house in an automobile." Had Will said that now, he might have added "an imported automobile."
I always have admired Will Rogers because of his native American (part Cherokee) wit, and his innate ability to tell it like it was. Would that we had someone such as he today, when we sorely need truth from a leader we can trust.
Last Sunday I paid a personal pilgrimage to what is now "Will Rogers Historic State Park" in west Los Angeles. In the heyday of his movie career in the 1920s and 30s, this idyllic spot was what Will called "The Ranch" where he and his family lived.
Here, on several hundred acres, he raised and trained his Western horses, practiced his rope tricks and played his beloved game of polo. Now this beautiful, nearly pristine corner of busy L.A, is still home to horse shows, polo and hiking. (Tame deer come up and greet you). You can still see Will's ranch house, pretty much as he and his wife, Betty left it so long ago.
Will Rogers died when I was an infant, but I know from history how he helped a shocked and fearful America get through the Great Depression.
People trusted Will, and with his 15-minute nightly radio commentary and his daily syndicated newspaper column, he gently but honestly made Americans smile, think, and eventually realize that their horrible economic national predicament would not endure forever.
Talking American Down
There's been a lot of loose babble in recent days, especially in the unceasing, unthinking, 24-hour TV media, by self-appointed "experts," comparing the present economic downturn with the Great Depression. Most of these pretty faces know little of American history as they repeat their Wikipedia versions of past recessions and depressions. To them, it's a numbers game sandwiched between commercials.
Place what is happening today in proper perspective. That Great Depression lasted from October 1929 to 1942. It was not Roosevelt's quasi-socialist/fascist "New Deal" that ended the Depression. It was the massive wartime production required by World War II that finally ended the downturn -- but with the loss 72 million lives, including over 400 thousand Americans.
Not the Great Depression II
In the Great Depression massive layoffs occurred, with U.S. unemployment rates of over 25% by 1933. (Today it is about 6%). Banks that had financed huge stock investment binges began to fail, as debtors defaulted. Millions of dollars worth of stocks had been bought on "margin," meaning only a fraction of the purchase price had been paid.
When the banks suddenly demanded payment on this margin debt, depositors tried to withdraw their money en mass, triggering multiple bank runs. In those days before the FDIC, with only meager government guarantees and few Federal Reserve banking regulations, bank failures caused the loss of billions of dollars in assets. As unpaid debts mounted, farm and other commodity prices and incomes fell by 20% to 50% -- deflation with a vengeance.
Real Bank Problems
After the 1929 stock market crash, during the first 10 months of 1930, mearly 800 U.S. banks failed. (In all, over 9,000 banks failed during the 1930s). By 1933, individual bank depositors had lost about $140 billion, (which by one estimate would be well over $1.5 trillion in 2008 dollars).
With a creeping fear gripping America, capital investment and construction slowed, then almost completely ceased. In a crisis of bad loans and worsening future prospects, surviving banks became even more tight in lending. Banks built up their capital reserves and made few loans, which further intensified deflationary pressures.
A vicious cycle developed and the downward spiral accelerated. This kind of self-aggravating process ballooned a 1930's recession into the Great Depression. Must we repeat this national economic suicide in 2008?
Learn the Lesson
Are we, as a people and as the American nation, so abysmally ignorant as to learn nothing from this history?If you want better to understand what is happening now, got to www.google.com and enter Panic of 1837, Panic of 1873, the Depression of 1893, the Panic of 1907, and the Great Depression et al. What is happening today is not new or unique.
The ambitious Senator Barack Obama has ridiculed Senator John McCain for stating the truth -- that the economic fundamentals of America are indeed sound. Our vast natural resources, abundant commodities, our human productivity, our world trade, our accumulated capital, still lead the entire world economy in this age of financial globalism.
Yet because of rapacious greed and a near total lack of risk judgment on the part of thousands of mortgage bankers, esoteric investment vehicle inventors, financial "experts" (and their power-hungry political allies), an unreasoning fear is producing an unwarranted and hopefully temporary panic/paralysis.
America Will Endure 
That could lead to the inevitable realization that history teaches us: a) that largely we are causing this panic ourselves, and; b) that we can and will survive what some day will be looked back upon as another in history's many economic dips -- certainly serious, but certainly not fatal.
President Franklin Delano Roosevelt's words at his inauguration on March 4, 1933, still ring true: "This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself -- nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance."
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