Many facets of history are repetitive and even cyclical which enables the astute student of the subject to develop an acuity not available to the person myopically focused on the present. Simply put, a student of history may see the train approaching the washed out bridge before anyone else but the momentum of the locomotive makes it impossible for them to do much more than watch the tragedy unfold, cover their ears to soften the sound of the crash, and make preparation to rescue survivors.
A case is point is the unfolding of the Great depression 2.0. The astute observer of history realized as early as 1999 that a major economic storm was rapidly developing just as his predecessor in 1919 saw the world sliding toward the economic abyss that manifested in October of 1929.
In 1928 the advent of of low interest home loans, the introduction of manufacturer financed auto loans, and payment plans for household appliances promised a rosy future for all. However, for those who chose to look beyond the rosy glasses all was not pretty. A repeat performance of 1928 played out in 2008, for those who chose to look beyond the promises of riches beyond measure through the flipping of houses.
Then as now, it was happy talk and happy times fueled by easy credit that made it possible for the average family to drive a Cadillac on a Chevrolet budget. Then as now, governmental intervention, though necessary, prolonged the problem by addressing the symptoms and not the cause.
One of the best books on this topic to cross my desk in quite some time is Breaking The Banks In The Motor Cityhttp://rcm.amazon.com/e/cm?t=1968adventurer&o=1&p=8&l=bpl&asins=B0036FTNZO&fc1=000000&IS2=1<1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr by Darwyn H. Lumley. The subtitle is an even more apt descriptor, The Auto Industry, The 1933 Detroit Banking Crisis, and The Start Of The New Deal.
The parallels between the origins of the first and second depressions were startling. The insider trading, the development of a “To Big To Fail” policy that resulted in the creation of new governmental agencies and the bailout of banks, and the dangerous intertwining of government and corporate entities.
As Mr. Lumlyey notes, “Spurred by failed decision making and conflict of interest by automobile industry leaders, Detroit banks experienced a critical emergency, precipitating the federal closure of banks on March 4, 1933, the first in a series of actions by which the federal government acquired power over economics previously held by states and private industrial and financial interests.” Sound familiar?
Even though there are a multitude of parallels between the first and second depression there are also some startling differences. The first depression spawned a wide array of safety nets that are today preventing the worst degradations of poverty associated with the era of the Dust Bowl. However, these safety nets have also created a dependency unknown during Depression 1.0.
Another stark difference is found in the current entanglement of governmental regulations the negate a vast array of opportunities which were available to those suffering through the first depression. Have you tried raising chickens and selling eggs, bartering services, or getting your sixteen year old son a part time apprentice position to help cover expenses. lately?
In the research for the book Ghost Towns of the Southwesthttp://rcm.amazon.com/e/cm?t=1968adventurer&o=1&p=8&l=bpl&asins=0760332215&fc1=000000&IS2=1<1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr, I discovered that the Great Depression spawned a new life for many old mining camps turned ghost town. Many of these were rediscovered by men who scratched a better than subsistence living with placer mining or the reworking of old tailing’s at these sites. What are the odds of unemployed man turning to this in support of his family today?
Another aspect that separates the two depressions is the never ending learning curve associated with technology that dominates the job market today. If you have current computer skills, loose your job, and find another in seven months many of your skills are as antiquated as the ability to operate a Model T Ford.
This depression has another aspect that I find rather unnerving and that is the implosion of the industrial city and the suburban satellite that encircles them that dominated the American landscape for more than a half century.
Imagine this, a recent study has concluded that forty square miles of the greater Detroit metropolitan area are abandoned, left to the ravages of the modern Vandals. In Las Vegas abandoned housing projects stand in mute testimony to the death of suburbia that is becoming a symbol of this depression but under the glitter an even darker chapter is unfolding, the death of the American middle class.
For those with work, then as now, times are not so bad as prices fall, bargains abound at endless yard sales, and cash is king. For those without, then and now, it is the camp and the roust.
In Depression 1.0 legendary Route 66 was the road of flight for those dusted out of Oklahoma and the Panhandle of Texas. It was also the road of fun and adventure for those on their way to the Los Angeles Olympics of 1932.
|The ghost of Christmas future?|
In Depression 2.0 iconic Route 66 is still the road of choice for those seeking fun, adventure, and tangible links to the pre generic age. However, for the astute observer there is the faintest of hints of the ghost of Christmas future found in its tarnished gems and fast fading remnants, in its ghost towns and empty motels.
The last depression had a face. It also had a voice in John Steinbeck and his now classic work, The Grapes of Wrathhttp://rcm.amazon.com/e/cm?t=1968adventurer&o=1&p=8&l=bpl&asins=0143039431&fc1=000000&IS2=1<1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr.
This depression is still unfolding much as the first one did between 1919 and 1930. As a result its voice and face have yet to be identified.