With little or no good economic news to encourage us recently, perhaps we'd be better served by trying to foresee where events are leading us rather than bury our heads in the sands of apathy. One of those who is trying to glimpse a potential future is Drake Bennett, identified in The Boston Globe as a "writer for Ideas." (We think - but are not absolutely certain - that IDEAS is an online research arm of the Department of Economics for the University of Connecticut.)
The article today is entitled, "Depression 2009: What would it look like?"
Bennett, who seems to agree with economists who believe the "odds are we will yet avoid a full-blown depression," raises the question of whether a 21st Century Great Depression would look anything like the one we had back in the 1930s. Not likely, he believes.
He makes a good case that the Depression will be radically different, but in my estimation he is entirely too optimistic. Bennett writes,
"We are separated from the 1930s by decades of profound economic, technological and political change, and a modern landscape of scarcity would reflect that."He foresees a return to the inner cities for security and less security in the suburbs.
"Unlike the 1930s, when food and clothing were far more expensive, today we spend much of our money on healthcare, child care, and education, and we'd see uncomfortable changes in those parts of our lives. The lines wouldn't be outside soup kitchens but at emergency rooms, and rather than itinerant farmers we could see waves of laid-off office workers leaving homes to foreclosure and heading for areas of the country where there's more work - or just a relative with a free room over the garage. Already hollowed-out manufacturing cities could be all but deserted, and suburban neighborhoods left checker-boarded with abandoned houses next to overcrowded ones."
"... a Depression circa 2009 might be a less visible and more isolating experience. With the diminishing price of televisons and the proliferation of channels, it's getting easier and easier to kill time alone, and free time is one thing a 21st-century depression would create in abundance. Instead of dusty farm families, the icon of a modern-day depression might be something as subtle as the flickering glow of millions of televisions glimpsed through living room windows, as the nation's unemployed sit at home filling their days with the cheapest form of distraction available."And you say, "That's optimistic?"
Admittedly we are deep into our Nostradamus role playing games, and who knows for sure how it might all shake out. Much of what he writes could be spot on - and you should read the whole thing for yourself - but we think Dr. Bennett misses a couple of key factors that also have changed since 1929.
One, ours is a much coarser culture. There are fewer church-going folks and several generations more or less raised on the idea that morality is relative to one's situation. A Depression would eventually change this, but the early going might be bumpy. Can't see the inner city as a place to run toward.
Two, our economic system heavily relies on corporate agriculture and distribution systems that in turn feature J.I.T., "just in time" delivery. We are but a couple of weeks away, at any given moment, from seeing empty store shelves if something were to interfere with the timely arrival of supply trucks. Diesel shortages, blocked roads, corporate bankruptcies, massive layoffs, credit shortages, or piracy could mean hunger for a lot of folks real quick. Ask anyone who stayed behind in New Orleans during Hurricane Katrina if it was easy to find a can of clam chowder down at the jiffy mart a few days in.
Bennett addresses the food issue. He cities an academic who says that people, even in the cities, will try their hand at growing food. That's probably true, but what if hard times arrive in the dead of winter? It takes several weeks of growing season, seed and a little bit of knowledge, to grow food that you can eat. What happens in the meantime. In 1929, nine out of ten Americans either farmed or had gardens, and gardening experience. Today, I would guess, maybe five out of one hundred Americans have the ability and know-how to grow food.
Steep learning curve.
And what if utilities failed? Those millions of TV sets and DVRs won't do much good if there is no power.
I pray to God every day that the people of this country awaken to the potential disasters ahead and start making plans, simple plans, to protect themselves and their families. If nothing happens, so much the better. If the worst happens, that's one less family that will be panicked into doing something stupid or worse.
Six months ago, an article like Bennett's was unthinkable in a major metro newspaper. It's worth some thought.
Labels: Depression, Predictions, The Economy