My Granny died at age 94. She was born in 1917 and lived a full life – she was only sick the last couple of days of her life. Overall, I would call it a success. She was thoughtful, generous, and even in her old age able to carry on a good conversation.
The things my grandmother lived through have always fascinated me. She witnessed every modern day historical event I could think of. The World Wars, the Great Depression, race riots, the Cuban Missile Crisis, heck she even watched two states become part of the Union! I used to always ask her about historical events and what it was like to live through them – I guess I expected it to be somehow different from my own experience living through historical events (like 9/11). One day I asked her what it was like to live through the great depression.
She explained to me that, at the time, no one even realized it was the “Great Depression”. People were poor, many people did not have jobs, but that most of what we see on TV today was the worst of it – not the typical. I started thinking about what we are going through today in “The Great Recession” and I can’t help but think that nothing is too different. Today there are just as many people without jobs, underemployed, or work for government created jobs. In fact, many sources cite actual unemployment around 22% or higher, not a the government’s 10% figure (not including the underemployed). (re: Hiding a Depression | Alternate Unemployment Chart). In fact, about 50 miles north of where I livea small tent town has even formed. Sound familiar? It sounds to me like a modern day Great Depression.
I did some research to find out what’s going on. Why did the government say that the recession was over in 2009, but nothing seems to have changed? Sure the stock market has improved a bit (hasn’t it?), but I’m still losing value in my 401k, unemployment is still as high as ever, the federal government is even deeper in debt, and the financial trouble abroad is as bad as ever! So Doesn’t this ring of something worse than a recession? Allow me to quote someone more credable than me, Richard Posner: “Let’s Be Honest: We’re in a Depression, Not a Recession, And There’s No End In Sight.”
Richard A. Posner is a judge on the U.S. Court of Appeals for the Seventh Circuit and a senior lecturer at the University of Chicago Law School.
If the notion that we are merely living through the aftereffects of a mere “recession” that ended in 2009 sounds somewhat ridiculous, that’s because it is. If we were being honest with ourselves, we would call this a depression. That would certainly better convey both the severity of our problems, and the fact that those problems have no evident solutions.
That’s right, we’re in a depression. As much as the government wants to tell us things are going to improve soon – it’s all phony. I’m not saying this is the end of the world as we know it, but don’t expect things to change for some time. The Fed is still over spending and printing more money (deficit), the EU has its own problem, and we still aren’t producing anything! This isn’t a short term problem, it’s a long road, folks. The Keynesian economic theory of “spend your way out of the recession” doesn’t apply this time. We are in a modern day depression.
If you happen to be thinking, “this doesn’t look like any movie, news clippings or pictures I about the great depression I ever seen” there is a good reason for that. As economist David Rosenberg of Gluskin Sheff points out, “The soup lines have been replaced with unemployment payment checks. Over 10 million such checks are being sent out now for up to 99 weeks.” We still have a long way to go and someone has to pay for those unemployment checks.
When I talk to my parents and the typical “uninformed” person, I get the feeling that they are just waiting for things to turn around. There is a sense of “any day now” things will just get better. I wonder how many other people out there feel the same way. Citing the 1970s and 1980s as examples when we pulled through recessions followed by periods of sharp growth afterwards doesn’t appear to be happening this time around.
My goal isn’t to promote fear mongering and I’m not saying that we should expect hyper-inflation or the civilized US to crumble. What I am saying is that things have changed for many Americans – possibly indefinitely. Instead of waiting on the government to fix it – it’s up to us, the individual. Accepting that the heydays are over for a while is our first step to recovery. Yesterday we were spending too much – we were gluttons and now it’s time to shed the pounds and go on a diet. The real question I have is how long is the government going to downplay this situation? When are we going to be honest with ourselves and REALLY fix this shit? The longer the government unfairly downplays our situation – the longer it’s going to take the bottom 50% of America to react.