As we prepare our purposefully irreverent meal for this day of thanksgiving - boiled oats and day-old biscuits - we would like to stop and make a fearless prediction which has been rolling around in our heads since about the middle of this year. We really don't have any hard data to back up our assertion; in fact, we're going to just put it right out there, that this is an intuition.
Simply put, we posit this will be the last holiday season that anyone in the United States, or elsewhere, can call normal. Note the call normal; last year saw the last holiday season which could be considered actually normal. This season, however, will be all about keeping up appearances; the show must go on, after all.
Take this Thanksgiving in the United States; 49 million Citizens are going hungry at the end of every month. Now, at last report in September, 28.4 million Citizens are on food stamps. Hmm, we sense a number problem here... but anyway, on top of that, half of all children in the U.S. will receive food aid, as well as 90% of African-American children.
Let that settle in your mind for a moment, dear Reader. Those numbers are not from Haiti or Zimbabwe, but rather the only so-called superpower in the world, the United States. Those are not good numbers to be seeing from an OECD nation; it makes us think about terms like 'third world' and 'failed state.'
This will be a failed Thanksgiving; people will max out what little credit they have remaining for the month in order to have a 'feast.' By that, we mean keep up appearances, as there are really very few people in the U.S. right now who can actually afford to have an extravagant meal, pay their bills, and have savings. Perhaps the 'recovery' propaganda has worked its magic, and most Citizens have moved into a Keynesian dreamland, where they spend now and have an economy later. We frankly think not; we posit most U.S. Citizens couldn't make a budget - and keep it - if their lives depended on it. For 49 million of those Citizens, their lives do depend on it, and they seem to prove unequal to the task.
After Thanksgiving will be the failed consumer orgy of Christmas; failed, because one cannot have an orgy if no one shows up. That's not to say that lights won't be strung and trees erected, because they will be... probably with more 'animal spirits' energy than ever. Under those trees, though, will tell the real tale. Show us an average Citizen who has lots of gifts, and we will show you someone who is nearing the end of their financial rope.
As we're writing, an ironic thought occurs to us: would it not be an expression of cosmic justice, if the attempt at summoning up a holiday shopping extravaganza is what finally topples the still-tottering U.S. economy? Think about it: maxing out credit cards for one last huzzah; blowing the savings on gifts for the kids, or Social Security cheques on the grandkids? Citizens of the United States are far too broke to enjoy the spendy, spendy ways to which they became accustomed; at this point, they should go limp, take their financial kicks to the stomach, and try to get things in order again. Instead, they will - and we mean will - go down, in vast numbers, and in flames.
Showing posts with label starvation. Show all posts
Showing posts with label starvation. Show all posts
Tuesday, November 24, 2009
Tuesday, May 12, 2009
Analysis of 1929 Depression Survivors' Advice
As the 2007 Depression continues, we expect that still-living survivors of the 1929 Depression will be getting more air-time. In our mind, it is sad that an economic calamity had to occur before these people's well-tested advice is given its due. The frugality and thrift which is so deeply ingrained in the individuals would have prevented much of what is occurring today - if only the greater public would have listened.
But that is neither here nor there; we want to discuss both the advice that these survivors offer (taken from two articles), and some inherent problems. First, the advice: in this article from The Ledger, one individual recommends a 20% personal savings rate; another says not to buy things one cannot afford. The most interesting insight, at least to us, is the thought that the young of the United States, having lived with nothing but a knee-jerk consumeristic lifestyle are in for a serious shock, at the very least. All in all, we recommend this article; it's interesting to hear the perspectives of these survivors, and their advice is never out of style.
On the other side of the coin is the bad advice, as seen in this otherwise excellent article from Utica Observer-Dispatch. One of the survivors says that the 1929 Depression was completely different from this 'recession,' but fails to suggest how or why (as an aside, she gave corollaries and outcomes of the 1929 Depression, not causes). The general thrust of the article seems to us to be that "the government is prepared;" “I don’t think [a Depression] could happen again” said one interviewee.
These two articles highlight some inherent difficulties in turning to 1929 Depression survivors: these people are old. There are sharp-as-a-tack survivors (we know one), but that term does not describe every survivor. A not-insignificant number of these survivors are not in as full of command of their faculties as they once were. This has a number of implications.
First, even when the advice survivors give is sound and useful, they cannot defend why it is as such; to them, it is only the way things must be done. Because of that, these survivors come across as a bit senile at best, or outright loonie-tunes at worst, from the perspective of later generations. It is easy enough for one to dismiss well-defended advice; it is infinitely easier to dismiss advice without supporting argument.
Second, because of the loss of facility which comes with increasing age, many of these survivors probably have to rely - at least in part - on what they hear and read, rather than anything they actually remember. The post-1929 Depression mantra carries with it a healthy dose of Franklin Roosevelt worship, and Herbert Hoover bashing. Both of those Presidents have similarly damaging policies; Roosevelt's was remarkable for being aggressively un-Constitutional. This loss of first-hand memory allows for retroactive continuity: the 'memories' of the survivor are clouded by the rhetoric of later generations defending the expansion of the Federal Government.
And finally third: these survivors can only reflect the point-of-view of persons who didn't die during the 1929 Depression. Almost all survivors came from fairly well-off families; they owned their own home, they could hold some jobs, they could buy and grow some food. There were many more families which had none of the above, and many simply died of stress and starvation. The survivors who speak today do so through a bias: they were comfortably-off before the 1929 Depression, and so had a cushion between death and survival. They did not see the absolute horror that the 1929 Depression brought to the United States.
We expect the 2007 Depression will bring similar horror. The only question, in our minds, is when.
But that is neither here nor there; we want to discuss both the advice that these survivors offer (taken from two articles), and some inherent problems. First, the advice: in this article from The Ledger, one individual recommends a 20% personal savings rate; another says not to buy things one cannot afford. The most interesting insight, at least to us, is the thought that the young of the United States, having lived with nothing but a knee-jerk consumeristic lifestyle are in for a serious shock, at the very least. All in all, we recommend this article; it's interesting to hear the perspectives of these survivors, and their advice is never out of style.
On the other side of the coin is the bad advice, as seen in this otherwise excellent article from Utica Observer-Dispatch. One of the survivors says that the 1929 Depression was completely different from this 'recession,' but fails to suggest how or why (as an aside, she gave corollaries and outcomes of the 1929 Depression, not causes). The general thrust of the article seems to us to be that "the government is prepared;" “I don’t think [a Depression] could happen again” said one interviewee.
These two articles highlight some inherent difficulties in turning to 1929 Depression survivors: these people are old. There are sharp-as-a-tack survivors (we know one), but that term does not describe every survivor. A not-insignificant number of these survivors are not in as full of command of their faculties as they once were. This has a number of implications.
First, even when the advice survivors give is sound and useful, they cannot defend why it is as such; to them, it is only the way things must be done. Because of that, these survivors come across as a bit senile at best, or outright loonie-tunes at worst, from the perspective of later generations. It is easy enough for one to dismiss well-defended advice; it is infinitely easier to dismiss advice without supporting argument.
Second, because of the loss of facility which comes with increasing age, many of these survivors probably have to rely - at least in part - on what they hear and read, rather than anything they actually remember. The post-1929 Depression mantra carries with it a healthy dose of Franklin Roosevelt worship, and Herbert Hoover bashing. Both of those Presidents have similarly damaging policies; Roosevelt's was remarkable for being aggressively un-Constitutional. This loss of first-hand memory allows for retroactive continuity: the 'memories' of the survivor are clouded by the rhetoric of later generations defending the expansion of the Federal Government.
And finally third: these survivors can only reflect the point-of-view of persons who didn't die during the 1929 Depression. Almost all survivors came from fairly well-off families; they owned their own home, they could hold some jobs, they could buy and grow some food. There were many more families which had none of the above, and many simply died of stress and starvation. The survivors who speak today do so through a bias: they were comfortably-off before the 1929 Depression, and so had a cushion between death and survival. They did not see the absolute horror that the 1929 Depression brought to the United States.
We expect the 2007 Depression will bring similar horror. The only question, in our minds, is when.
Wednesday, November 19, 2008
A Case for Optimism
As you can surmise from our posts, we are not hopeful that the world can avoid hard times. However, a true optimist is someone who will make the best of any situation, good or bad.
A depression is not merely a destructive force, but a force for change. New businesses and institutions grow out of the wreckage of the old. Emerging industries meet new needs, and more efficient operations replace obsolete models. Whether what new forms replace the old are "better" or "worse" is a subject of debate that we won't get into.
In the USA during the depression of 1929-1939, many major, traditional sectors of economic activity more or less completely withdrew from the scene and were replaced. For example, the family subsistence farm was replaced with specialised, industrial farming. The mom-and-pop corner store was replaced with the supermarket. The workshop manufacturing system was replaced with mass production. Horse-driven transportation was replaced with cars and trucks.
What industries of today are heading for the chopping block, or at least facing prospects of diminished significance? US auto makers? The "FIRE" economy? Big government? Public education? It's a difficult thing to predict, but if these sectors do not deliver value in proportion to their cost, they will likely shrink until they do.
Also, how will the forms of economic life change? Will online shopping grow in significance as the mall-dependent retail stores fail? Will globalisation increase or decrease - that is, will goods and services from around the world be a larger portion of one's spending? - or will import substitution grow as entrepreneurs discover how to use small scale technologies and the internet to beat the advantages of the mass market and global trade?
What this has to do with optimism is this: if you lose your main source of income, what will you do? We hope you won't simply join the bail-out parade. We hope you will turn on your inner entrepreneur and recognise the many activities all around you right now that can be done for a profit. Join forces with others who are on the ball, or create something new on your own. The possibilities are endless. Even if others around you go mad with bailout-mania, resist the temptation to have someone "make work" for you, unless you are just going to use that as a "day job" while you build up your creative work. You are never too old to learn a new skill - in fact, learning new skills keeps both mind and body sharp.
We have been reading many sad stories of people who have lost their jobs or businesses, but kept spending their way right into bankruptcy and homelessness. Wishfully expecting your income to be restored is not optimism, it is reckless delusion! One must always live within one's means, no matter how meagre. If you loose 70% of your income, you must cut at least 70% of your spending. This can be a hard thing to do, and depressing psychologically. We know, we have been there.
There's a Depression on, folks. There's a good chance you, Reader, are looking at an imminent, massive, and persistent decline in your income. You must be able to respond to that appropriately if you want to have a hope of restoring your sense of accomplishment in life. Economic depressions break people psychologically. You must prepare yourself to avoid involuntary homelessness and starvation. Soberly assess how much you could rely on friends, family, your church, or "the government" to prevent that eventuation.
There's a Depression on, folks. There's a good chance you, Reader, are looking at an imminent, massive, and persistent decline in your income. You must be able to respond to that appropriately if you want to have a hope of restoring your sense of accomplishment in life. Economic depressions break people psychologically. You must prepare yourself to avoid involuntary homelessness and starvation. Soberly assess how much you could rely on friends, family, your church, or "the government" to prevent that eventuation.
In conclusion, optimism is proactively managing a loss of income, and working towards its regrowth. We will further elaborate on both those tasks in future posts.
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