Nearer My God To Thee

“Of Mice and Men” is a novella written by John Steinbeck and published in 1937. It is set during the Great Depression in the agricultural fields of Northern California, where it follows two migrant ranch workers, George Milton and Lennie Small, who move from place to place in search of job opportunities. They are the real Americans in the heartland during the worst of the Great Depression. That Great Depression was caused by a complex mix of factors rather than a single event. The major causes included a stock market crash in 1929 which wiped out billions in wealth and triggered widespread panic. That was followed by banking failures (Over 9,000 banks failed during the Depression) wiping out millions of Americans’ savings due to lack of federal deposit insurance. This led to a reduction in consumer spending and investment as people lost money and confidence, spent less, and created a downward economic spiral. The Federal Reserve contracted the money supply and raised interest rates at critical moments, worsening the economic situation and structural weaknesses in the economy due to uneven prosperity with declining industries (like agriculture), weak international trade due to tariffs, and growing wealth inequality. Both consumers and businesses had taken on high levels of debt during the 1920s boom and farmers were already struggling with low prices, debt, and overproduction throughout the 1920s (again, not helped by tariffs which restricted global sales). Economists generally agree that these problems went global due to the gold standard, WWI debt policies, and tariffs (particularly the Smoot-Hawley Tariff of 1930), which damaged international trade and economic cooperation. The Depression lasted from 1929 until around 1939 when World War II spending helped stimulate economic recovery. In a strange way, the economic crisis probably helped create the grounds for global aggression that led to WWII. Its severity was worsened by initial government responses that were insufficient to address the scale of the crisis.

I don’t think I’m being very subtle with this recitation of how the Great Depression came about. Only an ostrich with his head in the sand would be unaware of the similarities of that preamble to economic catastrophe and the state of our world at this moment. We have more safeguards now like a smarter Federal Reserve, a hopefully more chastened banking system and a few regulatory measures like the existence of FDIC Insurance to help head off things like bank runs. Only people who couldn’t be bothered studying history would say that tariffs are good for America (or anywhere else) or that regulation by government is harmful.

But back to George and Lennie, as they go from one agricultural job to another. The story centers on the friendship between the intelligent but cynical George and the physically strong but mentally disabled Lennie. George acts as Lennie’s protector and guide, while Lennie’s strength helps them secure work. They share a dream of owning their own piece of land someday where Lennie wants to grow rabbits because they are cute. The story explores several important and still relevant themes like the impossibility of the American Dream for working-class people during the Depression, the loneliness and isolation in American society that can exist in times of economic hardship, the power dynamics of friendship and dependency, and the harsh realities faced by those who are different. The title comes from the Robert Burns’ poem “To a Mouse,” which includes the line “The best laid plans of mice and men oft go awry”. That title foreshadows the tragic conclusion of the story where George is eventually forced to put an end to poor Lennie with a tragic realization that sometimes in life, what should be is overwhelmed by what is.

Lately I have been having many text conversations with people about what is happening with our economy as Donald Trump insists on putting his hands on a system that has served us well for many years and brought a great deal of prosperity to a great number of people. His “Liberation Day” tariff regime has now been met by an array of responses ranging from predictions of impending global recession (both JP Morgan and Goldman Sachs have now firmly established that as the consensus view) and Larry Fink of Blackrock has gone so far as to declare us not on the crust of a recession, but rather in the midst of one already. Tribalist Republicans continue to denounce naysayers by pretending that they, as the wealthy part of our society, are bearing the brunt of this pain since they own 90% of the investible assets, but that ignores the reality that regular Americans cannot bear the burden of decimated 401-k funds, decreased employment and the “tax” burden of higher prices on everything with any foreign content. The wealthy can survive for the unlikely anticipated “better day” that Trump says is coming to Americans after leveling the foreign trade playing field to suit Trump’s vision of global economic fairness. Naturally, it ignores anything related to fairness to those outside of America, but it also ignores the horrible burden being placed on the Middle and Working Class of America, those who can ill afford the luxury of this hair-brained experiment by the narcissistic man-child Trump.

I was always a business leader who wanted to make radical change for the better and enjoyed being a change agent in the businesses I took over. I specifically remember trying to implement changes to a staid and conservative business like global private banking only to find too much of the baby getting thrown out with the bathwater. I learned that some things lend themselves to radical change and some things need far more finesse and need to be handled more carefully. The global economy is something that needs lots and lots of care and finesse. Tactical use of tariffs is a longstanding tradition and helps to keep nationalistic protectionist urges from taking advantage of certain industries, but Trump’s manner of using tariffs is more of a cudgel than a surgical instrument and his objectives are less about fairness and more about winning at any cost. So not only is his application of this economic lever filled with bad intentions, it is also horribly applied in a manner that is crashing the global economy. His egotistical tendencies and inability to adjust and admit that he has miscalculated the impact is just deepening the hole he is creating in the economy. Taking markets down into solid bear market territory.

This morning I was talking to my irrigation guy, who is, admittedly, very liberal, especially for a working man, but he has made it clear that he is angry as hell at what this market reaction has done to his 401-k and said that he knows a number of fellow small businessmen who are laying people off and pulling in their investment horns to prepare as best they can for the coming financial storm they see resulting. He spent a long while talking about the uncertainty of it all. In the same way, I told both my son and my brother-in-law in the last day that since they are both trying to sell some capital goods (some arcade machines and a warehouse) that they should take the first reasonable offer that comes along rather than try to get cute and playing negotiating games. This is livelihood and lifestyle money to them both and they do not deserve to be left holding an illiquid asset bag while the economic cycle grinds to a halt when people realize that the risk of capital investment is simply too great to make it a prudent play in this environment.

These are men trying to provide for their families. They are not being timid mice if they exert a degree of caution in the face of the lunacy coming from Trump. What John Steinbeck understood a century ago about America and Americans is all too relevant today. We are all now together in a place where we need to be careful for each other and not party on, playing one round of golf after another while the band on the deck of the Titanic plays “Nearer My God to Thee”. I’m mixing metaphors because one just doesn’t seem to be enough. That beautiful hymn, “Nearer, My God, to Thee” is a 19th-century Christian hymn with lyrics by Sarah Flower Adams, that is perhaps most famous for reportedly being played by the band on the RMS Titanic as the ship sank in 1912, though historical accounts vary on whether this actually happened. The lyrics express a desire to draw closer to God, even through trials and difficulties. The U.S. economy is the unsinkable Titanic to most of us, but Trump and his tariff iceberg has now ripped a large hole in the hull as well as causing a series of relatively small punctures and tears below the waterline of the ship. I don’t know if Trump has ruptured four, five or six of our economic compartments, but our massive economy is simply not invincible. With the Titanic, what’s interesting is that modern analysis suggests the total area of all the openings combined was likely less than 12 square feet – relatively small considering the size of the ship – but their distribution across multiple compartments proved catastrophic. Tariffs are the iceberg to our Titanic economy and both the mice and the men are starting to abandon ship.