Tag Archives: Great Depression

Why Evangelicals Love Donald Trump

Possibly the most depressing thing I have ever read about the state of the evangelical church in years.

Kevin Kruse, a historian at Princeton University, has a theory: This is an echo of an old alliance between white, evangelical Protestants and the corporate world. In his book One Nation Under God, published last year, Kruse argues that business titans joined forces with ministers and pastors following the Great Depression, pushing back against the New Deal with a kind of “Christian libertarianism.” Later, Dwight Eisenhower took their arguments—that freedom from government is a necessary part of freedom under God—and transformed them into messages about America: “In God We Trust” was adopted as the national motto and added to U.S. currency, and “under God” was tacked onto the pledge of allegiance. In turn, Kruse argues, Nixon used the newly minted image of America as a “Christian nation” to justify many of his policies.

Perhaps a strain of “Christian libertarianism” is coming back in American politics, showing up in a push to have government “run like a business” and a sense of anxiety about individual religious liberty being trampled by changing social mores. Kruse and I spoke about the possible connection between Trump’s rise and this old strain of pro-individualism among some conservative Christians.

Here is some of what Kruse said in an interview with The Atlantic

The first strand is an old one. You can look at the way in which Christians, Protestants, have seen personal success as a sign of God’s work.

The real political linkage is one that comes about through these corporate leaders in the 1930s, who are looking for someone to push back against the New Deal. When their own efforts fall flat, they go looking for ministers to make the case for them. They come together around a common set of values: They see the New Deal and the labor unions’ power as forces of “pagan statism.” Through that common enemy, they make an argument that Christianity and capitalism are one and the same.

In my book, I talk about James Fifield, who argues quite explicitly that both the systems are based on individual salvation. In his telling, a good Christian goes to heaven; a bad one goes to hell. A good capitalist makes profit, a bad one goes to the poorhouse. In both systems, individuals rise on their own merits.

If you go back and look at the main libertarian thinkers from the 1930s on, religion doesn’t play a large role in their lives. Even some, like Ayn Rand, are atheists.

Christian libertarianism is an effort by ministers like Fifield or Vereide or even Billy Graham to appropriate classic libertarian arguments, which didn’t at all have to do with religion, and put a religious veneer on them to make them palatable for Americans. They reprint Hayek and von Mises and people like that who never would have made an argument in religious terms; they send them off to ministers and religious leaders. Christian libertarianism is essentially an effort to appropriate a political ideology that either had nothing at all to do with religion or was antithetical to religion and instead use it toward a set of ends that had a religious gloss to it.

Great Depression 2.0

How close did we come to a depression?  Pretty close according to Newsweek.

"Depression" is a term of art. It’s more than a serious economic downturn. What distinguishes a depression from a harsh recession is paralyzing fear—fear of the unknown so great that it causes consumers, businesses, and investors to retreat and panic. They hoard cash and desperately curtail spending. They sell stocks and other assets. A devastating loss of confidence inspires behavior that overwhelms the normal self-correcting mechanisms (lower interest rates, inventory resupply, cheap prices) that usually prevent a recession from becoming deep and prolonged: a depression.

We came pretty close to that last year.

Thus traumatized, the economy might have gone into a free fall ending in depression. Indeed, it did go into free fall. The anniversary of Lehman Brothers’ bankruptcy in September inspired much commentary that saving the investment bank wouldn’t have averted crisis. True. But allowing Lehman to fail almost certainly made the crisis worse. By creating more unknowns—which companies would be rescued, how much were "toxic" securities worth?—it converted normal anxieties into abnormal fears that triggered panic.

As credit markets froze, stock prices collapsed. By year-end, the Dow Jones industrial average was down 23 percent from its pre-Lehman level and 34 percent from a year earlier. Financial panic poisoned popular psychology. In September, the Conference Board’s Consumer Confidence Index was 61.4. By February, it was 25.3. Shoppers recoiled from buying cars, appliances, and other big-ticket items. Spending on such "durables" dropped at a 12 percent annual rate in 2008’s third quarter and at a 20 percent rate in the fourth. With a slight lag, businesses canned investment projects; that spending fell at a 20 percent rate in the fourth quarter and a 39 percent rate in 2009’s first quarter.

So why didn’t the economy keep tail spinning out of control?

That these huge declines didn’t lead to depression mainly reflects, as Romer argues, countervailing government actions. Private markets for goods, services, labor, and securities do mostly self-correct, but panic feeds on itself and disarms these stabilizing tendencies. In this situation, only government can protect the economy as a whole, because most individuals and companies are involved in self-defeating behavior of self-protection.

Government’s failure to perform this role in the early 1930s transformed recession into depression. Scholars will debate which interventions this time—the Federal Reserve’s support of a failing credit system, the TARP, guarantees of bank debt, Obama’s "stimulus" plan and bank "stress test"—counted most in preventing a recurrence. Regardless, all these complex measures had the same psychological purpose: to reassure people that the free fall would stop and, thereby, curb the fear that would perpetuate a free fall. Confidence had to be restored so that the economy’s normal recovery mechanisms could operate. That seems to have happened. By September, the Consumer Confidence Index had rebounded to 53.1. Housing prices had stopped falling. By the Case-Shiller index, they’ve increased for three months.