Waiting for the Stimulus

As George W. Bush takes the stage for one last time tonight — finally! — a cry threatens to overtake him and even the new president who is the object of so much hope and anticipation. The stimulus. In offices and conference rooms, in anxious dens converted to workspace and breakfast halls, you hear it. Just hang on until the stimulus package kicks in. It’s a refrain that has become part of the public lexicon — part of the sober speeches of the day — Things may be bad now, but the stimulus will get things going again.

All the hope and anticipation for the stimulus plan — being finalized in the House of Representatives today — reminds me of the plight of those displaced Okies seeking work in California after the bank seizure of their farms during the Depression. It’s what John Steinbeck wrote about in The Grapes of Wrath. Back then, the hope centered on jobs in the Golden State, which the farmers learned about via the distribution of handbills. ” ‘We seen them han’bills. I got one right here.’ He took out his purse and from it took a folded orange handbill. In black type it said, ‘Pea Pickers Wanted in California. Good wages. All Season. 800 Pickers Wanted.’ ”

That’s not, however, how it turned out. Here’s Steinbeck’s devastating summation of what happened when they arrived in California.

“When there was work for a man, ten men fought for it — fought with a low wage. If that fella’ll work for thirty cents, I’ll work for twenty-five.

If he’ll take twenty-five, I’ll do it for twenty.

No, me, I’m hungry. I’ll work for fifteen. I’ll work for food. The kids. You ought to see them…Me. I’ll work for a little piece of meat.

And this was good, for wages went down and prices stayed up.”

I don’t have any reason to believe that our economy won’t get cooking soon — helped along by the Federal Reserve’s low interest rates and President-Elect Obama’s stimulus package. But it is instructive to consider the psychological aspects to a downturn, none greater than depicted in Steinbeck’s classic novel.

Madoff and Anti-Semitism

Well, this didn’t take long. Less than a week after the Bernie Madoff scandal broke — a Ponzi-scheme which largely victimized the American Jewish community — an epidemic of anti-Semitism is breaking out. Last night, I was jarred to hear the Klezmer-tinged notes of “If I Were a Rich Man”  coming from the McLaughlin Group. I found this pretty distasteful given that one of Madoff’s victims was Jewish philanthropist and McLaughlin Group regular Mortimer Zuckerman.

Now the Anti-Defamation League is drawing attention to what is happening.

“Site users have posted comments ranging from deeply offensive stereotypical statements about Jews and money — with some suggesting that only Jews could perpetrate a fraud on such a scale — to conspiracy theories about Jews stealing money to benefit Israel,” the ADL said in a statement.

“Jews are always a convenient scapegoat in times of crisis, but the Madoff scandal and the fact that so many of the defrauded investors are Jewish has created a perfect storm for the anti-Semites,” said Abraham Foxman, ADL national director.

There’s one surprise in all this. I was sure the trigger for the anti-Semitism was going to be the closure of the financial markets right after the initial crash back in September for the Jewish New Year. My sense is that this is one problem that is going to get much worse before it subsides.

The Economy: Even Worse than You Think

I attended a private gathering of workers in the financial industry and came away with a sobering recognition: the economy is much, much worse than we think. That’s saying a lot given the dire tone of local headlines, such as those in the Globe and the Herald.

Perhaps I was just picking up on the immediate reaction of workers watching the results of the Bear Stearns meltdown first hand. But I got a very real sense that people are absolutely freaked out.

I never understood the deep financial worries and profound fiscal conservatism of my grandparents, who lived through the Great Depression. But they were adults as customers lined up to take money out of banks which couldn’t give it to them because they didn’t have it. The bank runs and gripping financial hardships of that time traumatized them. We all have to hope that those days will never return. The fact that the current troubles have brought even discussion of such possibilities forward is terrifying.

In addition, given the relative youth of those in the financial industry, I’m also worried that it lacks individuals who have a sense of history and perspective. Many financial specialists today only know boom times and the boom market. Aside from the blip of the bursting of the technology bubble in 2000, most have almost no experience with bad times. Black Monday was more than two decades ago. The youngest people with experience of that day are in their early 40s.