Demos senior fellow and Black Tuesday author explains how similar America’s current economic climate is to the period after the Great Depression and shares what scares her most about those similarities.
Writer Nomi Prins
Tavis: Nomi Prins is a Senior Fellow at Demos whose previous books include “It Takes a Pillage.” Her latest is a work of historical fiction with plenty of real-world takeaways. The book is called “Black Tuesday.” Nomi, good to have you back on this program.
Nomi Prins: Thank you so much.
Tavis: The parallels are so profound. Intentional, I assume? Or not intentional, just timely.
Prins: Yeah. I think after the last book and seeing how economically devastated we really are since the Wall Street financial crisis, how they’ve gotten bailed out and everything else, we’re more and more mirroring what happened in the Great Depression. There was a crash in 1929. It was spurred on by Wall Street and speculation, a lot of shady deals.
Then it basically created years and years of economic devastation, depression for the rest of the country. So in that respect, there’s no other period in our history that is as similar to this period as, unfortunately, the Great Depression.
Tavis: Why write this? I’m glad you did, but why write this as a historical novel?
Prins: I wanted to find a way to bring the human side to it. I think a lot of times as journalists we talk about the statistics and the data and who said what and what politician responded and everything else.
I just wanted to get back to here’s a girl, here’s a character, here’s a situation where it’s a person who, through no fault of their own, through no desire of their own to be a heroine or anything else, comes upon a situation and it’s spurred and it’s difficult and there’s more conflicts and everything else to do something about it.
I think that’s something that’s in all of us and I wanted to create that character, which is really a lot of people, and look at the historical comparisons between the 1929 into depression and what we have now.
Tavis: Without giving too much away because, with novels, you have to be careful about this, tell me more about the character, about the woman.
Prins: Leila Khan is an immigrant like so many of us are, came over from Russia after horrific problems there and lives in a fifth floor walkup in the Lower East Side in the late ’20s. She’s very much trying to find herself.
You know, she comes up with a job on Wall Street basically at a diner and she comes into contact with these banker types that normally don’t come to her neighborhood. They still don’t come today through the Lower East Side.
She very much just wants to make something out of herself and tries, through a love connection she has with a banker, looks at him as a person, not just as a banker, but through that discovers – without giving too much away – a lot of shady things that are going on at the time, but also has this pull towards her tradition and towards her family and coming home every day and seeing the poverty on the streets and seeing the pushcart operators not be able to sell their wares and seeing people getting kicked out of their homes and trying to really come to terms as a person and as a growing woman in America with what happens downtown and what happens elsewhere.
Tavis: While I got a chance to go through this, I don’t think that the story could have been told as wonderfully as you told it had the character not been female. You agree?
Prins: I think that element of heart was something that I really thought was a very female quality. Not that men don’t have heart, but there’s a lot of bravado that comes with male characters and male heroes. She was very much following her heart as much as learning through her head and I think that was she was a woman.
Also, a lot of literature, particularly around those times, tends to portray women as flapper girls or sort of 1920s, those types of party girls, and that really wasn’t what a lot of people were. You know, they followed their heart, they had family problems, they had traditions that they were upholding and they were in a very, very volatile world, so she was.
Tavis: Unless I’m missing something here, you did not live on a fifth floor flat on the Lower East Side, but you did once work on Wall Street.
Tavis: What do you make – and you’re a woman, obviously – what do you make of what’s happening on Wall Street these days? That’s a two-part question. Let me ask first what do you make of what’s happening on Wall Street, the industry, the business where you used to work, and, number two, what do you make of what’s happening now on Wall Street regarding Occupy Wall Street?
Prins: Well, I think the business particularly recently, as we’ve seen, has gone out of control. It’s been unregulated, it’s been unwatched, it’s created situations, devastated the country. And the shadiness, the fraud inside of it, is something that still hasn’t been prosecuted, has still not been brought to light.
It’s like this essence of something that we know corrupted the country, we know devastated our economy, and the people in those banks, the people in those walls – I’m talking about the executives more than anything else.
You know, there’s secretaries, there’s all sorts of people that make up those banks, but the ones that really pull the triggers, the ones that call the shots, the ones that okay the toxic things that come out of that mechanism, they feel so entitled about all of this.
They feel that it was okay, that it was their duty to receive government subsidies, to be bailed out, because they are pushing the whole economy of America and they’re not. They’re really pushing a very small, very entitled agenda.
That’s not dissimilar from 1929 when a lot of their practices were very shady and hooked in little investors, “little people,” as they saw them. It’s very much the same now.
So what you have on Occupy Wall Street is a group of people that’s growing on Wall Street, in the area, it’s growing across the nation that are saying, look, the devastation that we are suffering at the hands of these people is absolutely wrong, it’s absolutely untenable, it’s absolutely unsustainable.
We haven’t seen any sort of leadership come to change this from Washington. It’s certainly not gonna come from inside Wall Street. They’re not gonna correct themselves. The market’s not gonna correct itself. It’s a very rapacious animal. It’s gonna be that.
But what’s happening with that Occupy Wall Street is there’s an energy. A lot of the people are youth. A lot of them are focusing on 25% unemployment that we have in this country for the youth today, massive amounts of student loans which are given now at rates of 4% to 5% where banks get money close to 0%.
There’s such a dislocation and what’s happening down there is a groundswell and it’s great that it’s a groundswell of people who are saying no, this is enough. You got bailed out, we got sold out. That’s financially, economically, and every meaning of that slogan, true.
Tavis: When Leila discovers what she discovers in the book, and she discovers much, were she around today, might she be a part of Occupy Wall Street?
Prins: I think she would be and I think the journey that she goes on where she didn’t start out to be a protestor, she didn’t start out to be that leader, but it’s that right and wrong.
It’s that when you see so much and you’re aware of so much that’s wrong and how it impacts so many people that you love, so many people around you, your country, everything else, that you are propelled to act out and to voice out. So, yeah, I think she’d definitely be down there.
Tavis: Something occurred to me a minute ago, Nomi, when you were talking about these bankers and their sense of entitlement. Put another way, to my mind at least, there are some major over-inflated egos on Wall Street. I’m thinking while you’re talking of that, on the one hand, that’s a real issue. There are egos over-inflated.
On the other hand, I wonder to what degree we, the government, are complicit, the people are complicit, in helping those egos to become so bloated, given that when they were going through their crisis, what Democrats and Republicans were saying, what George Bush and Barack Obama were saying, is that if we don’t save Wall Street, the whole country goes under. You see where I’m going with this.
Tavis: I wonder what responsibility, what complicity, we have for blowing those egos up, for making them think that perhaps they’re more important than they really are. Does that make sense?
Prins: Yeah, I think we have. We financed them to become more important than they are. We aren’t prosecuting the laws that they broke. We, as in the government on both sides of the aisle, as you mentioned, are not saying, hey, wait a minute. You guys committed fraud. You stole from people. You violated laws.
You violated agencies we have in Washington that’s designed to protect the public from your behavior. And after you did all that, we paid you for it. Not just in terms of your bonuses, but in terms of just the sheer continued solidity of your institutions. We made them bigger.
So all of that – if you have an institution like a JPMorgan Chase where it was just JPMorgan Chase and then it got Bear Stearns in March of 2008 that was government subsidized. We are still paying for that deal.
They got Washington Mutual. That became a bigger institution through government subsidies. So, of course, the inflated ego of Jamie Dimon who runs that institution grows along with it.
Now it’s a chicken and egg thing. I have this conversation all the time. Did the ego come first or did the entitlement come first? When they rose in their position, did it grow? Did they have it inherently and it just spawned? I don’t know what the combination is.
I know a lot of these men and I know that their egos are phenomenal. Their sense of entitlement is phenomenal. They really do think that they are the American economy and they are the financial system and they have been subsidized to do so. They don’t really care about the people on the ground outside their offices.
Tavis: Since you’ve written this historical novel, “Black Tuesday,” and I mentioned at the top that there are some fascinating and interesting parallels between 1929 and now, which is why you wrote the book, I wonder in real life what part of the comparison, what part of the parallel, most scares you, most concerns you as some believe now that we’re on the precipice of perhaps a double dip recession?
Between ’29 and now, parallel-wise, what most concerns you?
Prins: What concerns me is how much today we’re subsidizing the failure and the fraudulent and the criminal activities of Wall Street. Back then, what happened was, in 1933 – and it did take a while from the crash of 1929 to FDR being elected, to 1933, to examining what these banks were doing.
But there was an examination. There was a bank holiday. There was an idea that the government, and it was run by a Republican Treasury Secretary under a Democratic president, got together and said let us see what these guys are doing and let us create some sort of laws to keep them from doing it again.
What’s fearful now to me is that that just doesn’t happen. It hasn’t happened. Even if there was an opportunity after the worst part of the crisis, which I believe is still unfolding into a greater depression, it’s not being talked about in Washington.
It’s sort of being – you know, keeping this notion that the recession happened, was over in 2009, it’s not still going on, means we don’t have to deal with the fallout. We don’t have to deal with our banking structure. And that is very scary because they’ll do it again.
Tavis: In a few quick seconds, I think I hear you suggesting that you believe it gets worse before it gets better?
Prins: Yes, unfortunately, I do.
Tavis: Wow. It’s a historical novel written by Nomi Prins. The book is called “Black Tuesday.” Nomi, good to have you on the program, and congrats on the book.
Prins: Thank you very much.
Tavis: My pleasure.
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