I'm Going Lewis Lapham On Y'All...

Slate recently observed that Lewis Lapham is addicted to reading contemporary times through the lens of ancient Rome. Thanks to my once-and-future job on "Mad Men," I have a similar problem, only my drug of choice is 20th century American History.

For example, let's toke on William Manchester's "The Glory and The Dream," 1974 edition, p. 36:

"Seen in perspective, the Depression appears to have been the last convulsion of the industrial revolution, creating a hiatus before the technological revolution. In the aftermath of the World War, the techniques of mass production combined to increase the efficiency per man-hour by over 40 percent. This enormous output of goods clearly required a corresponding increase of consumer buying power -- that is, higher wages. But the worker's income in the 1920s didn't rise with his productivity. In the golden year of 1929, Brookings economists calculated that to supply the barest necessities a family would need an income of $2000 a year -- more than 60 percent of American families were earning. In short, the ability to buy did not keep abreast of the volume of goods being turned out... Customers of limited means were being persuaded to take products anyhow, the exchange being accomplished by an overextension of credit."

In other words, corporations thrived through out the 1920s, and passed those profits onto shareholders and executives, but neglected to pay their remaining employees a share of the growing pie. For a time, employees were able to participate in the nation's prosperity by living on credit, until the bottom fell out of the market and all the bills came due. Only then did they realize that, in fact, their real wages had not kept up with the economic growth around them.

Boy, what does that remind me of? Maybe this.

Manchester doesn't seem to have been a firebrand or a radical, and he writes a fantastically readable historical narrative. To hear him tell it, the only thing that pulled the U.S. out of the Great Depression was spending Federal money, and lots of it. In fact, throughout the late 30s, the one phrase that would inevitably make Wall Street freeze up was "balanced Federal budget."

I.e., it was only 70 years ago that corporate America was forced to learn the blunt reality that it does not good to hoard your profits if nobody is left to buy the stuff with which you generate those profits.

When an economy grinds to a halt, a rich man is just as boned as a poor man. I'm pretty sure John Maynard Keynes said that.