I think relating this so called downturn to the Depression is impossible for any of us (and media) to do. From the stories I heard from my grandparents and others, I'm not sure if the generation today would do so well in a true great depression.
"I asked my grandmother what her thoughts about the current financial situation, remember, she survived the great depression and she said, "I haven't seen anything like this.""
I'm sorry, but in what way does the current financial turmoil even approach the Great Depression?
As much as the media likes to say 'worst X since Great Depression', that doesn't mean X is actually anywhere near as bad as the Great Depression. And before you start digging up obscure values of X that actually are statistically worse in some way, point me to the 25% unemployment and millions of middle class folk turning into migrant workers and living in their cars.
Well now we have the "Great Recession" (according to Wikipedia, though technically apparently it ended in 2009), before WW2 there was the "Great Depression". Since the baby boomers are born shortly after WW2, I suppose the Great Depression was brought about by their parents or grandparents. I think people were far worse off back then.
Also, will the kids support the unsustainable retirement lifestyles if they can't afford them? It seems unlikely.
And we still don't know how things will play out. Maybe it was a genius move to take up all that credit.
By economic downturn, you're talking about the Great War. I mean, there are plenty of people terribly afflicted in the current western world, but it's hard to argue that the scale of the horror even approaches what was lived in those years, for soldiers and civilians alike.
The point of the article, life goes on even in a depression, is indisputable. However, I was thinking about the differences then and now. One conclusion I reached was that an economic depression is like a giant step backwards in terms of opportunities to get ahead, standard of living, etc. So for the sake of argument, say a Great Depression knocks you back 15-20%. What I realized was that a crash in 1929 pushed a significant number of people into actual subsistence poverty (not the modern Marxist definition of 75% less than others). The US was just barely out of an agricultural based economy in 1929. Today a 15-20% setback puts us back, on average, to sometime in the '80s. So the consequences today are not as severe as they were in 29.
It's debatable whether it was government policy that turned the 1930 recession into the Depression. Personally, I think it was because of the huge level of consumer debt racked up in the 20s. We have that feature in common with them.
The big difference between this recession and the 1973 or 1980 recessions, IMHO, is that the perception back then seemed to be that we were doomed. According to my parents and the books/news accounts I've read from then, people thought that American supremacy was permanently on the wane, the Japanese would kick our asses, and we just had to get used to a new era of austerity and lack of opportunity. While now, the mainstream news media seem to think a recovery is just around the corner, the worst is behind us, etc. Much like the 1930s.
In other words, we were not doomed then because we thought we were doomed and acted accordingly, and we are doomed now because we think we're not doomed.
Which makes sense in a perverse way, if you think of a recession as an economic signal to stop doing what you were doing, and find something new to do. Like how many young people in the 70s eschewed the corporate paper-pushing jobs and started playing around with computers.
Something similar could happen here, but it'll take more than social networking sites and fart-noise iPhone apps.
All of this reminds me of the modern version of the Great Depression. Economists have gotten smarter this time around and have covered up the unemployment rate and CPI, but it’s mostly the same.
Studs Terkel, probably the most famous interviewer / oral historian who’s ever lived, wrote a book containing hundreds of oral histories about the Depression. It sounds just like today:
Things are bad enough without exaggerating the situation. The big problem with the great depression was not the size of the crash but the duration of the recovery. Our view of the money supply seems a bit more effective these days and it seems unlikely that the recession that comes out of this situation will last as long.
Would it not be a Great Depression if it impacts millions of Americans for years or decades if the academic elite don’t see it from their ivory towers to document it?
We've avoided a major depression so far, but our institutional knowledge only spans a couple generations. There are very few people left who lived through the Great Depression. That there is active debate regarding policies that will prevent future depressions is not encouraging. Those who learn history are cursed to watch as history repeats.
No ones forgetting about the Great Depression nor implying that there haven't also been other tough times. But the point remains that from a perspective of lifetime earnings today we are worse off than we have ever been. The Great Depression wiped away billions if not trillions of dollars of worth but from an economic perspective those dollars were already earned. We can debate all day whether having gained and lost a million dollars is better than having never gained that money to begin with.
Also the Great Depression only lasted 10 years to begin with meaning that it didn't even affect a majority of that generations prime earning years. Coupled with the fact that it was immediately preceded and succeeded by periods of incredible growth and you see why you're point isn't really accurate.
But it isn't. Circumstance molds you. The Great Depression did untold psychological damage to entire generations. I don't think they could just will the anger and resentment and destitution away
Anecdote, not data: My father was born into the Great Depression. He said you couldn't buy thread - not because you didn't have money to buy it, but because all the thread factories had closed, and there was literally no thread to buy.
Data: The US unemployment rate peaked at 25%.
So, yeah, things were (much) worse during the Great Depression. I have no data on whether people were depressed then (though the final lines of Charlie Chaplin's Modern Times, his message to the country, were "Buck up" and then "Smile"). But I know that it left deep marks on people. When there just wasn't stuff, and there was no promise that there ever would be stuff, it affected people for decades after it was over.
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