Have you ever wondered how American high school history books in
the future will condense the political and economic events of the
last ten years into a few brief paragraphs?
In my junior year of high school I took American history as a standard
part of the curriculum. Although I now wish they had given the course
a more accurate title — something like The History of American
Politics, Presidents, and War — at the time I couldn’t have
known any better. I was not in a great position to receive the information
critically, and as a result I would later regurgitate the basic
narrative of U.S. History that the textbook writers gave as though
it was the obvious truth. Overstatement is a history textbook's
most effective tool.
(Of course, none of the key issues in historiography, such as how
viewpoints and ideology bias the interpretation of facts, or how
alternative views interpret historical fact differently, were addressed.
Our books were as matter-of-fact on why things happened the
way they did as they were on dates and names.)
Most everyone has had to take some version this course in school,
and the central themes are familiar: America is a dream of hope
and the greatest political and social experiment in history; the
evil South seceded from the Union in order to keep their slaves,
and the heroic Abraham Lincoln held the Union together and freed
the slaves with the glorious Civil War; the Industrial Revolution
led to the brutal impoverishment of the working classes, until the
government stepped in with labor unions, regulations, and workers’
rights; too much capitalism in the 1920s, coupled with Hoover’s
laissez faire philosophy of doing nothing, led to the stock
market crash in 1929 and subsequent Great Depression; Franklin Roosevelt
saved America from greed, poverty, and despair with his fireside
chats and the New Deal; World War II gave the American economy its
much-needed boost and set it on the path to recovery; and so on.
The culmination of my studies came during the essay of the final
exam, in which we were to defend the notion that Franklin Roosevelt
was the greatest President in American history.
Even as a politically-unaware teenager, at the time I felt uncomfortable
making this case. (Intuitively, I had sensed something awry with
the notion that mass crop destruction and make-work government programs
had kept our economy afloat during the depression.) But my teacher
insisted that we should be able to write in defense of something
even when we disagreed with it. And so, not wanting a failing grade,
I called Mainstream Belief as my muse and began to give examples
of how Roosevelt saved America from capitalism, Great Britain from
Hitler, and re-inspired belief and hope in the American dream. As
I recall, I got an A.
Of course, were I to write that essay now, I would probably start
first of all by citing "great" not as an admirable
personal quality, but rather in the context of the Great War, the
Great Famine in Ireland, or the Great Fire in London. I would name
Roosevelt as our greatest President in the same sense that the depression
of the 1930s was America’s "greatest" economic phenomenon
up until that point. Or, in the same spirit that TIME Magazine had
named Hitler Man of the Year in 1938: not as an endorsement
of his beliefs and actions, but as an acknowledgment of his influence.
I would have little conscientious objection to writing that
(Indeed, given the ratchet
effect, and the relative size of government before and after
each respective president since FDR, one could write the same essay
in defense of just about any of them.)
Today’s headlines often make me ponder how PhDs will write history
for tomorrow’s young adults. Surely they will dedicate a section,
or even a chapter, to the economic boom of the 1990s followed by
September 11th and this decade’s economic woes. I imagine that,
in fifty years, high school students may read something along these
A Growing Crisis
Even though the United States weathered the immediate economic
impact of the 9/11 attacks, it had shown that even the world’s
greatest economic power was vulnerable. In fact, the nation would
face growing challenges in the years ahead, prompted by wild speculation
in real estate markets.
President Bush’s platform of an "Ownership Society"
fostered a strong desire in the American people to purchase their
own homes. Real estate prices had seen dramatic increases for
years, and as a result American enjoyed an unrivaled prosperity.
But the high levels of home ownership came at a cost. The housing
market became crazed, as many Americans sought to purchase a home
at any price. To meet the high demand for housing and construction,
companies had to devise new ways of lending to accommodate lower
incomes. These so-called "subprime mortgages" largely
failed only a few years later, crippling lending companies and
putting the entire financial industry at risk.
Once again, it was up to President Bush to make tough decisions
to try and save the economy. He knew that, left to its own devices,
the financial industry was headed off a cliff, and might drag
the rest of the United States with it! Bush met with the top officials
of the Treasury Department and the Federal Reserve, and they drafted
a massive plan that would save the major banks — and, with a bit
of luck, the economy as a whole — from ruin.
There are many parallels between the economic booms of the 1920s
and 1990s. Unbridled capitalism led to over-consumption of goods,
and people relied on credit to purchase what they could not afford
on their own. Although this led to profits for big companies,
it was unsustainable and could not last.
In 2008, the trouble was that housing prices were falling drastically,
but with no available credit, few could buy them. Without consumer
spending driving demand in housing, everyone’s wealth was beginning
to erode and disappear. Thus, in order to counter the irrational
swing in the market and keep housing prices stable, the government
decided to back the finance companies directly. In so doing, they
reinforced the value of these firms, despite the fact that they
had been taking severe losses. Within a couple of weeks, the bailout
was enacted, which cost the government an unprecedented $700 billion,
equivalent to about 5.7 trillion in today’s dollars.
The bailout was a huge gamble, but it worked. Although inflation,
unemployment, and business failures deepened for another five
years, the economy eventually stabilized and resumed its pattern
of solid growth, founded on high levels of consumer spending and
public infrastructure. Housing prices returned to 2005 levels
by the year 2012, and by 2018 they were 50 percent higher. 96
percent of families who had defaulted on their original loan were
able to keep their homes.
Before leaving office, George Bush also created the FOB (Federal
Oversight Board) that set new standards and regulatory influence
for every aspect of the lending business. He also guided Congress
in passing a law that banned short-selling, to prevent speculators
from manipulating the market and making immoral profits from the
nation’s struggles. (This ban would later become permanent, in
By giving insurance to unfortunate lending companies, protecting
families from being removed from their homes, and preventing others
from harming the economy further, the stage was set for a recovery.
It was America’s second brush with potential economic collapse
— a test that pushed the economy to its very limits. However,
by committing itself to supporting American businesses and housing
prices, the government was able to moderate the financial industry
and lay the foundation for a successful future.
Is it far-fetched to imagine George Bush receiving praise specifically
for the bailout, which is currently unpopular and likely to cause
further harm? I don’t think so. We would do well to remember just
how vehemently many Americans opposed the likes of Abraham Lincoln
or Franklin D. Roosevelt at the time they were in power. (Indeed,
try to imagine what people would say about Bush if he threatened
to pack the Supreme Court or run for additional terms.)
Just think: my children (and your children) may one day be writing
an essay for History class, defending the notion that George Bush
was the greatest President in American history!
Coleman [send him mail]
is a freelance editor who lives in Annapolis, Maryland. He spends
his free time conversing with friends about libertarianism and Thomist