Unemployment has reached a fourteen year high, consumer purchases are dropping sharply, and the stock market fluctuates wildly, although the overall trend is down. There is a new president elect but he will not take office for more than two months. The only events comparable to what we are facing today are the events of November, 1932.
History does not repeat itself exactly, as Karl Marx noted more than 150 years ago. But, writing about the events that followed the failed revolution in France in 1848, he saw history repeating itself, the first time as tragedy the second time as farce. Hopefully, we have gone beyond the farce in the presidential campaign which gave us Palin, Joe the Plumber, Bill Ayers, and Reverend Jeremiah Wright as "serious" issues.
In November, 1932, Herbert Hoover, having gone down to an overwhelming defeat in the elections, did absolutely nothing as the depression reached its peak and both bank and business failures and unemployment mounted. His relationship to the President-Elect, Franklin Roosevelt, was one of unremitting hostility and Roosevelt, when he took office in March (the transition then was from November to March,which was changed in 1936 largely because of what had happened in 1932) faced from the moment of his inauguration a catastrophe.
We have Bush and a lame duck Congress, but global capitalism is much more advanced and interconnected today than it was in 1932, and what historians have long called the "velocity of change" (meaning that in contemporary society, the effects of events like economic crises of this magnitude can be realized in days and weeks instead of months and years) becomes a force in itself.
President Elect Obama as a U.S. Senator and the Democrats in Congress should begin immediately to draft legislation to contain the crisis in so far as it can be contained. Jobs and mass purchasing power should be the first priority. Public works legislation should begin to be drafted and Bush pressured to sign such legislation to contain unemployment. Unemployment insurance benefits should immediately be extended and expanded to maintain mass purchasing power. Legislation easing the burden of consumer credit card and installment plan debt on the people should be immediately drafted. Such legislation would have an enormously positive effect on consumer confidence and at the same time begin to save people who are either unemployed are about to become unemployed.
When the howls begin that this can't be done because "the money is not there," progressives should make it very clear that within the last month over a trillion dollars has been spent by the U.S. government alone to bailout finance capital and capital has responded so far by what John Maynard Keynes would call "oversaving" or hoarding rather than major reinvestment in productive capacity and jobs.
The "velocity of change" is a reality in contemporary capitalism. If there is no action, it is not impossible that we will see double digit unemployment and a Dow Jones Average under 7,000 when President Obama takes office in late January, along with wage and salary cuts among non unionized workers and management pressure to force such cuts among unionized workers.
That is why, as Franklin Roosevelt said when he became president, we need action and action now, so that President Obama will have the best possible chance not to confront in 2009 a crisis of the magnitude that FDR confronted in 1933.