A PERSONAL COMMUNICATION and COMMUNITY PERSPECTIVE:
We are an impatient people. And, no matter who becomes the next president, one can not microwave (systemic) change.
It took a full ten+ years to pull us out of the great depression. We complain about our national debt but change begins at the individual level as well. Who of you in four years has paid down All of your OWN debt or have you just continued to go farther into debt (possibly some, but not All) How many of you have hired just one extra person for a job to keep a family from going under, (split a higher paying job budget between two workers)?
How many of you have fed or invited an unemployed family down the street from you in foreclosure for dinner?
It starts with us, from the bottom up and not from the top down in all our efforts.
What ever similarities are drawn from the Great Depression and what we see today. Can we really immediate change in under 4 years?
1) I believe that there are two major differences in the economic circumstances of 1933 and 2008 which transcend other issues and have literally save us in some respects comparatively speaking. First, thousands of banks “failed” between 1929 and 1933, wiping out the savings of millions of “hard-working, playing by the rules” middle-class Americans. Since fall 2008, not a single depositor in a U.S. bank has lost a dime of savings due to FDR’s Banking Act of 1933, which created the Federal Deposit Insurance Corp.
While the stock market and housing prices tanked, the fact that bank accounts were intact was of immense psychological value to savers at all income levels. Undoubtedly, this depositor sense of security had a positive effect on the stock market rebounding quickly so now it is more than double what it was in February 2009.
2) Secondly, and just as importantly, because of Social Security, started in 1935, the purchasing power of today’s seniors has been greatly, although not entirely, protected. Social Security payments, combined with the unemployment insurance benefits (also initiated in 1935) paid to the millions laid off due to the downturn, have kept consumer purchases much more stable than they otherwise would have been. This is in contrast to the complete removal by 1933 of the purchasing power of nearly 25 percent of the workforce that became suddenly unemployed. The economy just shriveled up.
1. Stock Market Crash of 1929
Many believe erroneously that the stock market crash that occurred on Black Tuesday, October 29, 1929 is one and the same with the Great Depression. In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars. Even though the stock market began to regain some of its losses, by the end of 1930, it just was not enough and America truly entered what is called the Great Depression.
2. Bank Failures
3. Reduction in Purchasing Across the Board
With the stock market crash and the fears of further economic woes, individuals from all classes stopped purchasing items. This then led to a reduction in the number of items produced and thus a reduction in the workforce. As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and their items were repossessed. More and more inventory began to accumulate. The unemployment rate rose above 25% which meant, of course, even less spending to help alleviate the economic situation.
4. American Economic Policy with Europe
As businesses began failing, the government created the Smoot-Hawley Tariff in 1930 to help protect American companies. This charged a high tax for imports thereby leading to less trade between America and foreign countries along with some economic retaliation.
5. Drought Conditions
While not a direct cause of the Great Depression, the drought that occurred in the Mississippi Valley in 1930 was of such proportions that many could not even pay their taxes or other debts and had to sell their farms for no profit to themselves. The area was nicknamed “The Dust Bowl.” This was the topic of John Steinbeck’s The Grapes of Wrath.
6. Unemployment to continue to purchase good and services within the economy
Throughout the Great Depression, there was little information on the extent of unemployment in the country. More important, there was no good way to assess whether the situation was getting better or worse. The wealth of timely statistical information on the labor market that we now take for granted simply didn’t exist. Throughout the 1930s, researchers grappled with the issue of how to measure unemployment. To begin with, there wasn’t agreement on how to conceptualize or define the condition. Simply asking those out of work if they “wanted” work or if they were “able” or “willing” to work proved to be too subjective to serve as unemployment criteria. At the same time, attempts to gauge the number of jobless by looking at declines in employment or counting the registrations at public employment offices were found to be incomplete. By the way, the second dip during the Depression was in 1937 and came as a result of austerity measures.
The whole unemployment schema today is a numbers game and it all depends on which lens one is looking through to sell those numbers. Systemically, we have more people, more kids, more families to feed no ifs and or butts about it today than in 1930.
One unemployment perspective today is about the actual current civilian workforce vs 208 against the total US population. Another is all of those not being counted who have dropped off the employment labor roster and workforce grid all together, and another is DOL’s BLS reporting which has significantly changed on how we look at number vs. how we looked at unemployment in the 1930’s.
Today, our news is filled with accounts of sensationalized news, recent horrible storms, a terrible record-setting heat wave with temperatures reaching 105 degrees, and other bad news; such as the economy, unemployment, murder, crime, war and the like. There has indeed been a substantive amount of news lately, and even more complaining about certain local electric company’s inability to fixing things fast enough.
Well, yesterday I heard a story by word of mouth from a friend (about 15 miles away in Germantown, Maryland) where an 86 a year old woman had walked to the big box food store in the 100 degree heat to buy some food and ice as she was out of her small ration of food which she had kept on ice in a little cooler which contained bologna and cheese for sandwiches.
More critically, no one, not a single person had checked in on her and she had no family in the area. She mentioned to the deli worker that there were a lot of elderly in her neighborhood. She did not have any AC. She did not own a car anymore. She did not have a cell phone. She did not have the Internet. And, she had survived the intense 100 degree weather by sitting in her doorway step to catch a little breeze when it came through.
I was shocked, no I was mad actually to hear about this. No one had checked on her or the other elderly in her neighbor. But, she assured my friend that she was fine, just a little hot.My friend could not leave her job with 35 people in line buying food in the aftermath of the storms and electrical outages, but she gave her personal phone number-just encase she needed anything-at any time. The elderly woman then walked back home, in the 100 plus degree weather.
It is my hope that you will take the time to go take some food and ice with you to the house bound, and the elderly who are possibly shut ins, check on them and offer to take them to nearby cooling centers or a local mall.
The heat has indeed been daunting (and winter time is also another tough time for specific at risk populations. Please go early and check on your neighbors, go door-to-door if need be. It will only take about a 1/2 hour of your time.
And, lest we forget the power of good and how just one single person can make a difference in the lives of others, I would like to share the following story I came across this morning. I would like to encourage those of you reading to take a look at the short video clip directly below.
If you have not ever seen this before, it is a moving experience recently annotated (2008-1009) more than some 70 years later about Sir Nicholas Winton’s impact.
For more information here are a few other links:
May each of us remember the potential impact for good we each have in our own lives to touch others.