Depression 2009: What would it look like?

[katty]

more: http://www.boston.com/bostonglobe/ideas/articles/2008/11/16/depression_2009_what_would_it_look_like/?page=full

By Drake Bennett
November 16, 2008

OVER THE PAST few months, Americans have been hearing the word "depression" with unfamiliar and alarming regularity. The financial crisis tearing through Wall Street is routinely described as the worst since the Great Depression, and the recession into which we are sinking looks deep enough, financial commentators warn, that a few poor policy decisions could put us in a depression of our own.

It's a frightening possibility, but also in many ways an abstraction. The country has gone so long without a depression that it's hard to know what it would be like to live through one.

Most of us, of course, think we know what a depression looks like. Open a history book and the images will be familiar: mobs at banks and lines at soup kitchens, stockbrokers in suits selling apples on the street, families piled with all their belongings into jalopies. Families scrimp on coffee and flour and sugar, rinsing off tinfoil to reuse it and re-mending their pants and dresses. A desperate government mobilizes legions of the unemployed to build bridges and airports, to blaze trails in national forests, to put on traveling plays and paint social-realist murals.

[HereSince1628]

1. It will look like Sec Daschle sitting on his ass wringing his hands because

he has no f***ing courage to fight for the homeless and hungry.

[katty]

5. agree with that

[natrat]

14. that guy is such a fucking pussy, what a bummer of an appointment

[benld74]

2. WILL NOT be pretty

[WCGreen]

3. One of the contributing factor that was present in the 1930's and is not

present now is the complete and utter destruction of farm land in Northern Texas, Oklahoma, Kansas and parts of Colorado. The land was over worked and not replenished and when the winds started to blow hard, the topsoil turned to dust and blew away...

There were food shortages because of this confluence of really bad circumstance.

[GliderGuider]

4. Contributing factors that were not present in the 1930s and are now:

From my article Gathering Momentum:

Then there is the perennial (and perennially optimistic) reference to the WPA during the Great Depression. Millions of people were put to work on infrastructure projects, and were happy to find the work, no matter what it paid. Of course labour costs will drop through the floor in any deflationary depression, but there's more to a recovery than just the cost of labour. The problem I find with comparisons to Depression-era WPA efforts lies in these facts:

* The American manufacturing base has been significantly eroded compared to 1930;
* Energy and raw material prices are much higher than they were then (oil is over 5 times more expensive in constant dollars);
* The population of the USA is almost 3 times higher;
* The per capita national debt is 6 times higher in constant dollars;
* The national debt has ballooned from 20% of GDP in 1930 to 100% today;
* The USA now imports 2/3 of its oil, compared to 0 then. This is especially significant in light of the Export Land Model proposed by Jeffrey Brown of The Oil Drum, which leads to the conclusion that the international oil market could go completely dry within 25 years.
* The derivatives market -- whose value depends strictly on agreements between buyers and sellers that can vanish in an instant -- is nominally valued at ten times the world's total GDP. The disappearance of this value in a global mark-to-market event could be the trigger for a world-wide deflationary crash.

All these factors create a physical and economic environment with "significantly" more challenges than the USA faced in 1930.

My best guess right now is that the world will, overall, reset within ten years to a level of economic activity that is less than half of today's value, and that this will become the new normal. Recovery to our current level of activity will not be possible due to the convergence of permanent ecological and energy shortfalls. Some regions may do better than that, some worse. The USA is primed to be fall into the "worse" column because of its dependence on imported oil and its eroded manufacturing base, neither of which can be rectified in the time remaining with the money remaining.

Given the current circumstances a recovery from this crisis is not guaranteed.

[katty]

6. great-thanks for posting this

[tama]

12. I'd like to add

That in 1930 there was still significant part of the population working in basic production (farmers etc.). Today only very small part, and even those totally dependent on energy intensive industrial farming. Except Amish and few ecovillages.

In 1930 many still had basic skills. Today most have only useless skills.

[katty]

13. yes, i've thought about that alot - should start some basic

instruction on candle making, gardening, sewing, & i am sure many other things

[Hydra]

7. Thanks for posting this

It's a subtle way of showing how we basically are in a depression already...but that's hardly a surprise to those feeling the squeeze.

[katty]

8. yes, hardly a surprise-whole families on the street

[Hydra]

10. The sad part about that

That particular problem has been going on for years...but no concern until the problem became more widespread(as to threaten some of the better off).

Ironically, I used to advocate against homelessness and poverty...until the threat of such in my own life required me to set that aside and fight for myself and my disabled relative.

[katty]

11. yes, true - it has

[vinylsolution]

9. President Obama must....

... find a place for John Edwards in his administration.

One guy we KNOW who will fight for the homeless and the hungry (unlike dumb-ass Daschle).

Fighting the Bush Depression on behalf of blue-collar folks would be a great way for Edwards to restore his reputation.

[Trojan]

15. Let Me Point Out One Difference Between 1933 And 2008

75 Years ago... Now there are many many more rich folks than poor ones. Then there was no internet. No one really understood what really happened.

Now when things get BAD and sadly it will, the Crooks and Cons (Fed and Wall Street) still are Well Off ...

Anger mounts ... Then what ? Look at the Pirates in Somalia ! The Evil of Money !!! What a Sodam and Gomorah world !!! Go Britney Spears

Do Not give the peasants CAKE ! Feed them American Idol while we debase the US Dollar. Some thoughts from a Canadian that Loves America and does not care for the EVIL FED and the Bankers. Go Back to your constitution ! The FED is not part of what your founding Fathers wanted with GOOD REASON !

They passed that LAW December 23, 1913 in the middle of the night and STOLE America !

[hyperdemocrat]

16. I don't even want to think about it

The thought depresses me.