While living under stay-in-place rules, my weekly trip to the grocery store brought back memories of World War II on the homefront. Let’s see if there are lessons learned, then, that may usefully be applied to the coronavirus pandemic.
Back then, my mother would arm me with the family’s ration coupons and a $5 bill and send me on my bicycle to make the rounds of all the grocery stores in Wilmington, North Carolina, where we were living at the time. “If you see a line, get in it,” was her instruction. I remember successfully bringing home a beef roast on one expedition. Canned milk on another. I also recall standing in line for what seemed like an eternity only to find a large stack of Kotex hygiene products waiting on a counter. I didn’t know what it was, but I could tell it wasn’t edible.
On the recent trip to our local Food Lion, I found a sight that’s becoming familiar to many of us: The entire paper products section was empty. And it wasn’t just toilet paper that was absent; it was all paper products — plates, napkins, and towels. I purchased the last can of Maxwell House coffee, which was on sale. There were still a few cans of higher-priced Folger’s waiting to be taken.
As I made my way to the checkout, I couldn’t help but notice an attractive sign telling me that wine was on sale by the case. Yes, although some things were in short supply, there were at least a few compensating differences. Maybe we should all drink to that!
Yes, there were memories of World War II, standing in line, and experiencing a strange joy of capture on finding a choice item. But, as I thought about all this, I realized that something was missing, something that might come in handy if this war against the coronavirus does continue for several months: savings bonds. And, for children, savings stamps.
During the war years, incomes were high, much as they were up until very recently (and still are in many cases). Back then, it came from the war effort. While there were a million people in the military not making a huge amount of money, the folks at home were seeing the best paydays they had ever experienced. There was a massive manufacturing buildup. Shipyards on both coasts were burgeoning; auto companies were producing Jeeps, tanks, machine guns, and armored personnel carriers. While the paychecks were large, there was nothing much to buy. No new civilian model cars. No appliances. No tires. And hardly any gasoline or chocolate bars.
Recognizing this, and in the face of huge budget deficits, the Roosevelt administration seized on the idea of war bonds as a place to put those plentiful dollars that were not easily spent. As crooner Bing Crosby put it in song: “We’ll be blessed if we all invest in the USA.” Payroll savings plans began to boom, and, each Friday throughout the land, school children brought their dimes and quarters to class where they purchased savings stamps. When the stamp books were filled, they were converted to savings bonds. $18.75 would buy a bond with a $25 payoff when it matured 10 years later.
President Trump says we are at war. With U.S. debt slated to exceed World War II levels in terms of GDP, maybe we need coronavirus savings bonds. After all, relief legislation is making it possible for a large number of people to earn more now than under normal circumstances. Even some who are drawing unemployment benefits will soon be receiving handsome supplements that will more than replace their previous earnings for the time being. And just as in World War II when goods were in short supply, today, there is less to do with the money in a world where all the retailers are closed.
Of course, we don’t expect the coronavirus shutdown to last as long as World War II. But its effects could last a long time. Meanwhile, we, as a nation, are incurring a huge amount of public debt that will have to be funded.
Yes, this could be the time to invest in the USA. As Crosby asked in song: “Any bonds today?”
Bruce Yandle is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a distinguished adjunct fellow with the Mercatus Center at George Mason University and dean emeritus of the Clemson University College of Business & Behavioral Science. He developed the “Bootleggers and Baptists” political model.
