The Great Depression
Caused by government action
Although the Great Depression engulfed the world economy many years ago, it lives on as a nightmare for individuals old enough to remember and as a frightening specter in the textbooks of our youth.
Some 13 million Americans were unemployed, “not wanted” in the production process. One worker out of every four was walking the streets in want and despair. Thousands of banks, hundreds of thousands of businesses, and millions of farmers fell into bankruptcy or ceased operations entirely.
Nearly everyone suffered painful losses of wealth and income.
Many Americans are convinced that the Great Depression reflected the breakdown of an old economic order built on unhampered markets, unbridled competition, speculation, property rights, and the profit motive. According to them, the Great Depression proved the inevitability of a new order built on government intervention, political and bureaucratic control, human rights, and government welfare. Such persons, under the influence of Keynes, blame businessmen for precipitating depressions by their selfish refusal to spend enough money to maintain or improve the people’s purchasing power. This is why they advocate vast governmental expenditures and deficit spending — resulting in an age of money inflation and credit expansion.
Classical economists learned a different lesson. In their view, the Great Depression consisted of four consecutive depressions rolled into one. The causes of each phase differed, but the consequences were all the same: business stagnation and unemployment.
GEEZ DOES THIS SOUND FAMILIAR? DOES THIS SOUND LIKE LONG-DEAD INFORMATION FROM OLD TEXTBOOKS?
I grew up with parents who were old enough to understand the Great Depression. They remembered it. Mom remembered her mother, a farm wife, rising at dawn to bake 3 dozen biscuits for the hobo men who would knock at their back door every day, asking for a handout. She had to go to high school for an extra year before her parents could afford to send her to college. Her oldest sister graduated, and her next oldest sister was a senior, and she was a freshman.
My Dad never got over losing the fifty dollars he had saved in his bank account.
During the last sixteen years of his life after he retired, I would guess that he visited one of his banks at least three times a week and possibly more. Was he looking to see if the bank officers were surreptitiously packing boxes, preparing to depart?
I learned the lessons drilled into my head daily. Pay cash, save your old stuff, you never know when you might need it again, Satan invented credit cards, it will all come down one day.
Mom grew vegetables and sewed most of our clothes.
I remember 1973. Fuel prices skyrocketed. Dad took out one of his ubiquitous index cards that he always carried (yes! he did!) and recorded the kilowatts used v. the price charged by the power companies each month. We never used our dryer again. The rest of my childhood was spent listening to fans running on clothes draped all over the house. The day we took Mother to the nursing home, the dryer, bought in 1970??? still worked.
I learned my lessons well. Right now I am wearing a shirt I bought at Goodwill for $2.50, a pair of shorts bought at Old Navy for $3.00...both purchased many years ago.
I have never in my life walked into a store and paid full price for a piece of clothing, a purse, a pair of shoes, a piece of jewelry.
I had several hundred dollars worth of birthday gifts in an old coffee can covered in red wallpaper and my drawings, "KEEP OUT THIS MEANS YOU" by the time I was 8 years old. I would take the money out at night and feel the bills. It was comforting.
I am not working. I am lucky. I get a state retirement disability check, and my social security disability application is pending.
I don't think I know of a family that hasn't been affected. I think that right now I know more people without a 9-5 job than I do people with a 9-5 job. I know several families where one spouse lives in another state while their families stay in houses that can't be sold and their children complete their education in a state where they've earned the residency rights to apply for lottery scholarships.
We've already been discussing college with our kids and telling them they might have to live at home.
But yet I cannot buy an Ipad. They're sold out everywhere. Somebody still has money. The school pickup line has dozens of expensive cars running their air conditioning while they wait. We just renovated our 2001 Nissan Quest Van, planning to drive it for another ten years. It's paid for.
The price of gas begins to soar again, and America begins to rethink vacation plans. We had talked about flying to visit far-flung relatives, but we're not.
We used to eat dinner out every week. Now it's every 3 months, and it's an incredible thrill.
I got on an email list a year ago set up by a local realtor and every night as I check my iphone I look at his latest house. Last night I looked at a lakefront mansion built in 2008 that was in foreclosure and cost $525,000.00. Quite a bit of money. But it would have been close to a million several years ago. Some houses seem to be almost at giveaway prices compared to the market a few years ago.
I know people who are ashamed of the jobs they hold. Roger retired early with a sweet buyout deal in 2004. He was an executive, sitting in a big office. He now works as a part time security guard at the library and loves it. I'm not ashamed one bit. I don't tell people he's "in security" or "a security consultant." I tell people he's a security guard. My parents told me not to be ashamed of any type of labor.
People who hold down full time jobs complain to me in hushed voices about the unbearable conditions. They furtively glance around for eavesdroppers. "I know that I should feel lucky, but"....and then I hear another tale of employers demanding twice the work for half the money.
"I wanted another baby," they say. "But we can't afford the ones we have." "We bought a lake lot a few years ago. We can't even afford the taxes on it, much less build on it." "We can't see our house. We're renting it to people who have been foreclosed on."
I feel that I have been preparing for this all my life. I never, not once, made fun of my parents for being so cautious about money. Somehow, deep in my psyche, I knew I would live through something like the Great Depression.
It's here. And all the positive thinking in the world won't pay the bills.
Republicans and Democrats blame each other. The Fair Trade Act passed. What did they expect? My clothes are made abroad. We buy them at Walmart. If I had more money, would I patronize Walmart? I wouldn't even give it a second glance. Now several of the cashiers greet us by name.
I feel that we will come out of this a stronger, better, and temporarily wiser nation. Will it last? No. In 50 years I'll be dead. My kids will be writing about another depression. I can only hope that I can convey to them the necessity, the absolute, definite, necessity of living lives filled with joy, yet listening to the haunting echoes of my voice telling them that nothing.....nothing at all.....health, wealth, beauty, stock prices, life itself.....lasts forever.
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