The Body Economic (27 page)

24
. For methodological details see Stuckler, et al. “Banking Crises and Mortality During the Great Depression.” Briefly, we used a Hodrick-Prescott filter to differentiate short- and long-term trends. This is a technique, which decomposes movements in time-series data into short-term and trend components in two steps. First, the HP filter finds a smoothed time trend in the log level of the mortality for each state. Then, short-run deviations of the original time series from the estimated long-run trend can be used for subsequent statistical analysis. We performed a sensitivity analysis using different smoothing parameters for estimating long-term trends (the standard is 6.25, although Granados and colleagues use 100), finding that our results did not differ qualitatively. We also replicated our analysis using short-term changes in the mortalities (using annual levels of the percentage change in mortalities). We also controlled for relatively fixed differences between states, such as geographic location, by means of state dummy variables. Overall, we found bank suspensions were significantly associated with increased suicide rates but reduced transport-related death rates. No effect was observed on cardiovascular death rates, homicide rates, pneumonia, cirrhosis, or cancer death rates. Because the population risk of deaths attributable to road traffic accidents (RTA) was 50 percent higher than suicides, the reductions due to RTA outweighed the rises in suicides, yielding a negative net effect of bank suspensions on all-cause mortality.

25
. Source for Figure 1.3: Adapted from Stuckler, et al. “Banking Crises and Mortality During the Great Depression.”

26
. Indeed, so many people died in accidents that car ownership had to be disclosed to life insurance companies. “Vital Statistics.” 1932. Report of the
American Journal of Public Health
. Available at:
http://ajph.aphapublications.org/doi/pdf/10.2105/AJPH.22.4.413
. See Associated Press, “Traffic Deaths Drop in 1932; First Decline in Auto History,”
New York Times
, Nov 28, 1932; M. Kafka, “An Appalling Waste of Life Marks the Automobile,”
New York Times
, Aug 28, 1932.

27
. A. Reeves, D. Stuckler, M. McKee, D. Gunnell, S. S. Chang, S. Basu. 2012. “Increase in State Suicide Rates in the USA During Economic Recession,” The
Lancet
v380:1813–14.

B. Barr, D. Taylor-Robinson, A. Scott-Samuel, M. McKee, D. Stuckler. 2012. “Suicides Associated with the 2008–10 Economic Recession in En gland: A Time-Trend Analysis,”
British Medical Journal
v345:e5142. Available at:
http://www.bmj.com/content/345/bmj.e5142

28
. See for example, “U.S Highway Deaths at Lowest Level in 60 Years,”
Washington Post
, Sept 9, 2010. According to the Governors Highway Safety Association, “We attribute the progress to a host of factors, including increased seat belt use, stronger enforcement of drunk driving laws, better roads, safer vehicles and an increasingly well-coordinated approach to safety among state stakeholders and the federal government. [Transportation] Secretary [Ray] LaHood's focus on distracted driving has brought an unprecedented focus to behavioral highway safety, and as a result, lives are being saved.” The more likely explanation for this favorable turn is the Great Recession itself. See also M. Cooper, “Happy Motoring: traffic Deaths at 61- Year Low,”
New York Times
, April 1, 2011. Available at:
http://www.nytimes.com/2011/04/01/us/01driving.html?_r=0

NIDirect Government services, “Lowest Number of Road Deaths on Record,” Jan 3, 2013. Available at:
http://www.nidirect.gov.uk/news-jan13-lowest-number-of-road-deaths-on-record
; for Ireland see Ireland's National Police service. Garda National traffic Bureau. Fatalities and Other traffic Statistics. Available at:
http://www.garda.ie/Controller.aspx?Page=138
. The consequences have had knock-on effects elsewhere. Across the globe in India, more and more farmers are selling kidneys to pay debts, as the black market for organs has increased.

29
. Edward Behr,
Prohibition: Thirteen Years That Changed America
(Boston, 1996), pp. 78–79. For additional time-trend estimates based on aggregate, rather than state-level data comparing “wet” and “dry” states, see J. A. Miron and J. Zwiebel. 1991. “Alcohol Consumption During Prohibition,”
American Economic Review
v81(2): 242–47.

30
. M. Davis,
Jews and Booze: Becoming American in the Age of Prohibition
(New York, 2012), p. 191.

31
. Source for Figure 1.4: Adapted from Stuckler, et al. “Banking Crises and Mortality During the Great Depression.”

32
. Total government debt also increased from $16.2 billion in 1930 to $19.4 billion in 1932.

33
. Charles R. Geisst,
Wall Street: A History
(New York, 2012).

34
. Maurice Sugar, The
Ford Hunger March
(Berkeley, 1980), p. 108.

35
. Irving Bernstein,
A History of the American Worker 1933–1941: The Turbulent Years
(Boston, 1970), pp. 499–571. The Socialist Party of America's membership doubled between 1928 and 1932.

36
. William E. Leuchtenburg,
Franklin D. Roosevelt and the New Deal 1932–1940
(New York, 1963), pp. 1–17. It is perhaps ironic that the New Deal, which in part arose from Socialist agitation, made the Socialist Party much less relevant.

37
. C. E. Horn and H. S. Schaffner,
Work in America: An Encyclopedia of History, Policy, and Society
(Santa Barbara, 2003). We are grateful to Price Fishback and his team for the insight about marked variations in state's implementation of the New Deal.

38
. As part of election politics, more relief funds were distributed to cities with Democratic presidential candidates, those with more representation on the House Labor committee during the New Deal, and those with Democratic governors.

39
. E. Amenta, K. Dunleavy, M. Bernstein. 1994. “Stolen Thunder? Huey Long's ‘Share Our Wealth,' Political Mediation, and the Second New Deal,”
American Sociological Review
v59(5): 678–702. Available at:
http://www.jstor.org/discover/10.2307/2096443?uid=3739560&uid=2&uid=4&uid=3739256&sid=21101670536097
; W. I. Hair, The
Kingfish and His Realm: The Life and Times of Huey P. Long
(Baton Rouge, 1991).

40
. See also P. Fishback, M. R. Haines, S. Kantor. 2007. “Births, Deaths and New Deal Relief During the Great Depression,” The
Review of Economics and Statistics
v89(1): 1–14.

41
. Cited in G. Perrott and S. D. Collins. 1934. “Sickness and the Depression: A Preliminary Report upon a Survey of Wage-earning Families in Ten Cities,” The
Mil-bank Memorial Fund Quarterly
v12(3): 218–24. Available at:
http://www.jstor.org/discover/10.2307/3347891?uid=3739560&uid=2&uid=4&uid=3739256&sid=21101670536097

42
. Our colleague Dr. Price Fishback, an economist at University of Arizona, looked at the data and drew similar conclusions: “Even though relief programs were targeted at a broad range of social and economic problems, they display similar costs per life saved as modern programs that are targeted more specifically at reducing mortality, such as Medicaid.” See Fishback, et al., “Births, Deaths and New Deal Relief.”

43
. The First New Deal totaled about 10–20 percent of GDP. In the six years after it was implemented, government spending doubled. Yet it was not until World War II and a large rise in government stimulus in the 1940s that the Depression ended. Price Fish-back and colleagues estimate that the personal income multiplier for public works and relief was around 1.67. This is similar in magnitude to our estimates for total government spending and social protection, cited in chapter 4. P. Fishback and V. Kachanovskaya, “In Search of the Multiplier for Federal Spending in the States During the New Deal.” Working Paper. 2010. Available at:
http://econ.arizona.edu/docs/Working_Papers/2010/WP-10-09.pdf

44
. And the New Deal put in place reforms to prevent another recession from occurring. The 1933 Banking Act, the Glass-Steagall Act, as it is commonly known, separated commercial and investment banking and prohibited banks from dealing in debt and derivative securities, the types of investments that had precipitated the Stock Market
Crash of 1929. Because of Glass-Steagall, more than six decades passed without another Crash or Depression. But, sadly, in 1999, after intense lobbying by the banks, a Republican Congress and a Democratic president, Bill Clinton, repealed Glass-Steagall. The floodgates reopened for risky investment to create another real estate bubble and a Great Recession. In 1939 Roosevelt also passed an additional “undistributed profits tax,” establishing the principle that corporate earnings could be taxed to pay for the negative effects of corporations' actions on the rest of the economy. But it was watered down by Congress and soon expired. “The Wall Street Fix: Mr. Weill Goes to Washington: The Long Demise of Glass-Steagall,”
Frontline
, PBS, May 5, 2003.

45
. M. Harhay, J., Bor, S. Basu, M. McKee, J. Mindell, N. Shelton, D. Stuckler, “Differential Impact of Economic Recession on Alcohol Use Among White British Adults, 2006–2009,” unpublished analysis; J. Bor, S. Basu, A. Coutts, M. McKee, D. Stuckler. In press. “Alcohol Use During the Great Depression of 2008–2009,”
Alcohol and Alcoholism
.

Chapter 2: The Post-Communist Mortality Crisis

1
. United Nations Development Program. The
Human Cost of Transition: Human Security in South East Europe
(New York: UNDP). Available at:
http://hdr.undp.org/en/reports/regional/europethecis/name,2799,en.html
. Technically Russia was not a state until 1992. World Bank World Development Indicators 2013 edition. Available at:
http://data.worldbank.org/indicator
. See also J. DaVanzo and G. Farnsworth, “Russia's Demographic ‘Crisis',” RAND, 1996. The Russian census had projected that the population would grow during this period, while the official US estimates also forecast continued growth. However, astute demographers, including Nicholas Eberstadt, who had been studying Russia's mortality data since the early 1980s were quick to recognize that mortality had been on a long-term adverse path and that the early- 1990s reflected a short-term shock superimposed upon this long-term deterioration.

2
. USSR Census 1989. Published by the State Committee on Statistics.
Natsional'ny Sostav Naseleniia Chast' II.
Informatsionno-izdatel'ski Tsentr (Moscow, 1989). See also “Abandoned Cool Mining Town in Siberia: Kadychan, Russia,
Sometimes Interesting,
July 24, 2011. Available at:
http://sometimes-interesting.com/2011/07/24/abandoned-coal-mining-town-in-siberia-kadykchan-russia/
. See population statistics from Russian Census 2002:
2002
.

3
. E. Tragakes and S. Lessof,
Healthcare Systems in Transition: Russian Federation
(Copenhagen: European Observatory on Health Systems and Policies, 2003).

There had always been a low level of unemployment of about 1.4 percent in 1990. S. Rosefielde. 2000. “The Civilian Labour Force and Unemployment in the Russian Federation,”
Europe-Asia Studies
v52(8): 1433–47. Available at:
http://www.tandfonline.com/doi/pdf/10.1080/713663146
. Estimates of poverty rates based on analysis using the Russian Longitudinal Monitoring Survey; see P. Mosley and A. Mussurov, “Poverty
and Economic Growth in Russia's Regions,” Sheffield Department of Economics, 2009. Available at:
http://eprints.whiterose.ac.uk/10002/1/SERPS2009006.pdf
; London School of Hygiene & Tropical Medicine, “Living Conditions, Lifestyles, and Health Survey 2001.” Details available at:
http://www.lshtm.ac.uk/centres/ecohost/research_projects/hitt.html