Thoughts on the Economic Depression the U.S. Is Officially Not Experiencing
74
Don't Say the 'D' Word
The Great Depression was a time of extreme hardship for the United States and its citizens. Unemployment was near 30%. People went hungry. People lost their homes and lived in tent camps that came to be referred to as 'Hoovervilles,' after Herbert Hoover, the President who was in charge when the stock market crashed in 1929.
If you are a news junkie like me, one thing you know for sure is that the economic crisis we are currently experiencing is not another Great Depression. Mostly you know this because the anchorpersons and pundits make sure to say that specificially, a lot, over and over again.
Unemployment right now is only 6.5% and experts predict it may reach 8% or 9% in the coming year--not even close to the 30% levels seen in the 1930s. People are losing their homes but so far no tent towns have sprung up anywhere. Spending is way down, but then we were all spending too damn much anyway. We don't have breadlines yet.
So no, this isn't the Great Depression II or Son of The Great Depression or Bride of the Great Depression or anything of the sort.
But, let's be honest for a minute:
It doesn't look good.
Perfect Storms, Dust, and Fire
The Dust Bowl greatly exacerbated the Wall Street woes that triggered the Great Depression by creating food shortages and displacing large groups of people. From 1930 to 1936 the Great Plains states were hit by severe dust storms caused by extensive farming with poor crop rotation combined with a severe and extended drought.
With no plant material to hold the soil in place, nothing prevented the wind from picking it up and distributing it where it didn't belong. It suffocated and buried people and livestock, and scoured the paint off of buidings and vehicles. The static charge in the air was so strong that if you were to go out in a dust storm and touch a piece of farm equipment or a car, the electric shock delivered could knock you out cold or kill you.
People lost their farms, lost all their worldly belongings, and in many cases, toward the end, simply piled into a vehicle and headed west with no jobs and no plans. They had no hope, no reason to stay. So they just abandonned their farms and their homes and ended up sleeping in tents in California or Florida, living hand to mouth for months at a time.
You might say that the economic woes of the 1930s and the Dust Bowl created a 'perfect storm' of events that resulted in severe economic hardship that didn't really end until World War II began and America had to gear up its manufacturing base to prepare for that war. People like to argue about whether FDR helped or hurt the economy during the Great Depression, but in actual fact almost nothing helped except World War II.
While I personally admire FDR and am grateful for social security, the WPA projects, and many of FDRs other social accomplishments, I do want to emphasize that none of these significant achievements actually halted the Great Depression. Eventually the Dust Bowl drought ended, better farming practices were put in place, and the war started factory production going again and put a few dollars in people's pockets. But pretty much everything the government tried at the time to pull itself out of the Depression was mostly a way of keeping people from despair by keeping them busy.
That's not nothing--Keeping people from despair is important.
But today, when people are hotly debating economic and political ideologies and how to proceed and what is going to be the right and wrong thing to do and why or why not, I think it's important to point out that sometimes, the best thing you can do is recognize that there isn't a whole hell of a lot you can do. Don't despair, but keep an eye on reality. It keeps you from wasting energy, spinning your wheels, and it also keeps you from getting into unproductive arguments over philosophical matters that, exciting as they may temporarily seem, are not, you know, edible.
Determining what is and is not edible will become important soon.
Our Dust Bowl: The Loss of the Auto Industry
The U.S. auto industry has been credited with single-handedly creating the American middle class. By any measure, that industry is in serious trouble right now and parts of it might not even last until Obama's inauguration in January. GM doesn't even have sufficient funds to last out the year. Ford is not doing so hot either. Let's not even talk about Chrysler.
As I write this, Congress is arguing about whether or not to loan Detroit a second $25 billion to get them through the coming months. It isn't looking good, but anything could happen I guess. The problem is, even if they get the money, they don't have a plan that will result in profitability. They can't borrow money right now because of the credit crisis, so they are turning to the U.S. government. But individual people can't easily borrow money either, so even if they were producing cars people want (they aren't), few people would be able to buy them. Clearly, this is a problem.
Now lots of people say, let them fail! The Big Three have been so poorly managed they don't deserve to live. I can actually see this point of view, but here's the issue: Whatever you think of the American auto industry and how it has been managed or mismanaged, the loss of it means the loss of at least 3 million more jobs, and these jobs could be lost very quicky---like, over the course of the next month or two.
It isn't just the jobs in the factories themselves that are at risk. A myriad businesses depend on Detroit for their own existence. Jobs at car lots, parts manufacturers, parts distribution centers, trucking companies (that ship the parts), and jobs in all the support industries and retail and service industries in the states and towns where the factories are located--all of these jobs will vanish very quickly. The loss of those jobs will mean further economic contraction and the loss of even more jobs.
So that 8% or 9% unemployment could easily, quickly approach Depression era levels in the coming year, and this could easily happen no matter what Congress does or does not do for the auto industry.
I live in Michigan, and my partner is now commuting 60 miles a day because his trucking company shut down the hub where he has worked for the past twenty years. If Detroit fails, some trucking companies may fail as well. Already rumors abound that Yellow Trucking is about to go under. So it isn't as if letting the auto industry fail to teach them a lesson about capitalism won't hurt all of us. It will hurt bad, and for a long time, because so many industries are so interconnected with the Big Three.
Concealing Bank Failures
Two weeks after I left my bank job, my bank asked for some of that $700 billion federal bail-out money and was turned down. The reason? The F.D.I.C. had determined they were about to fail and be seized, so instead of giving the federal bail-out money to the bank I worked at, the Fed gave it to another bank to use to buy my old bank, thus concealing the bank failure.
Let me make this clear:
The bank that bought my failed bank did not have the money to buy it. The federal government gave that bank bail-out money to buy my old bank so that it wouldn't hit the news as another bank failure.
When you see Treasury Secretary Henry Paulson on TV explaining to Congress that he is no longer even trying to buy up troubled mortgage-backed financial instruments and is instead giving that bail-out money directly to banks, this is what he is talking about and this is why he is doing it. If he weren't doing this, we'd have bank failures in the news every single night.
And it's about to spread to credit card companies and student loan companies. The next big round of defaults will be in the area of unsecured credit. Already defaults on credit cards are double what they were last year, and it's only beginning, because the job losses are only beginning.
While concealing bank failures and the horrible state our financial institutions are in does help maintain calm, it also keeps vital information from the American public. Yesterday, Citigroup, the second largest financial institution in the entire world, announced lay offs of 53,000 workers. That's on top of around 20,000 laid off only a few months ago. And Citi is one of the bigger financial institutions that is considered more stable.
Obama Is Not the AntiChrist
David Brooks is not my favorite New York Times columnist by a longshot. He's a dyed-in-the wool conservative and kind of a stuffed shirt, and he usually comes down far to the right of wherever I happen to be, but today's column was pretty good. Brooks noted that economic contraction does not always necessarily bring out the best in people. Hard times tend to bring out a lot of fear and extremism too, and the effects can be very painful for a nation.
Brooks notes that,
"The economic slowdown of the 1880s and 1890s produced a surge of agrarian populism and nativism, with particular hostility directed toward Catholics, Jews and blacks. The Great Depression was not only a time of F.D.R.’s optimism and escapist movies, it was also a time of apocalyptic forebodings and collectivist movements that crushed individual rights."
Brooks goes on to explain that people who stand to lose the most are the very people most open to extreme and even violent political ideas. He says:
"In this recession, maybe even more than other ones, the last ones to join the middle class will be the first ones out. And it won’t only be material deprivations that bites. It will be the loss of a social identity, the loss of social networks, the loss of the little status symbols that suggest an elevated place in the social order. These reversals are bound to produce alienation and a political response. If you want to know where the next big social movements will come from, I’d say the formerly middle class."
We have a choice though about what kind of social and political movements the coming hard times produce. Some of those movements will surely be frightening and full of anger and blame. But I think that we do have a President-elect who wants to unify the people of this country and heal some of the cultural rifts that eight years of Rovian politics hath wrought. We didn't all vote for him, but we are all Americans and he is the President now, and we will need to all work together to get through the tough times ahead.
I'm under no illusion that it will be easy or that Obama will even be successful. I think he isn't even sure what will work or how it will all sort out. A bigger mess I can't imagine. He's got a hell of a job ahead of him.
But maybe the next time any of us feels tempted to pull out a big rhetorical gun to win a political or philosophical argument, it might be worth considering that the person we are so determined to convince (or annihilate) may be the same person who can help us eat or find fuel or water next year or next month or tomorrow. We might want to tone it down and try to all get along.
I don't know much.
But that's my main thought on where we are as a nation right now.
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Comments
It seems that a crisis has a way of becoming opportunites and lessons for us all. In my personal life, we do feel the financial crunch, sales for our businesss has gone down, and its a litte disturbing, I think its basically the lowest in a long time, but we are also spending less, we have learned to do with less.
As usual I anjoyed reading you!
Ahhhh pg, the financial crisis you and I have been talking about for almost a year has finally gotten some official recognition.... and though it is not the Great Depression, it is a humongous worldwide bubble bursting in slow motion. We are still at the beginning, I think..... but like VioletSun says, crisis has a way of becoming opportunity.
Winston Churchill once said " You can always count on Americans to do the right thing, once every other possibility has been exhausted" Well, we've certainly exhausted all the other possibilities over the past decade or two and now we have a chance to get sserious and go back to being who we really are....besides, won't it be nice to have a President who can actually pronounce the word "nuclear"?
Adversity sometimes brings out the best in people rather than the worst, so cheer up. I've got a basement full of Little Friskies and you and Bill have an open dinner invitation. BTW congratulations on getting out of that damned bank. Now that you have more time to write you are going to make a fortune blogging--wait and see:-) Good job and another thumbs up.
Hi Marian & VioletSun,
Marian--it's like that here too. The reason I have the job I have right now is tht the big chain I work in laid off employees right before Christmas and pushed the stock work on the distributor. To keep the client, the distributor had to scramble to hire extra reps to pick up the slack--but imagine, layoffs in discount retail right now! It's pretty alarming.
VioletSun, I'm so sorry about your business. I lost my best freelance client last week. He sold his blog. It was so disappointing. Ironically, it was an economics blog!
Thank you both of you for reading my hub and for your always thoughtful comments.
No tent cities?
http://www.shortnews.com/start.cfm?id=73491 http://thecrit.com/2008/03/17/tent-cities-popping- http://wanderingvets.com/2008/09/21/177-tent-citie http://www.cbsnews.com/stories/2008/10/01/eveningn
"We might want to tone it down and try to all get along."
That is the most important line in an excellent Hub. This mess hasn't even gotten started yet. It's just warming up. Pretty soon it will pass a point where obfuscation won't work anymore and things will start coming apart at an increasing pace. Hopefully there will be enough positive changes taking place to offset some of the collapse.
Factor in what's happening to our global life support system and you've got a situation that's never been encountered before. There have been localized environmental breakdowns in the past. Never, in recorded history, has there been a global extinction event that I'm aware of.
Hold on people. I personally think what's coming will make the "Great Depression" seem like the good old days.
robie2! So good to hear from you! Yes it's finally congealing, this financial mess, but thank God I'm out of that bank and I do like Obama--I have confidence in his abilities. This is a pretty big mess though. I don't know that anyone really is up for this one. You're right though about opportunity and crisis coming hand in hand. Some of what will be lost I won't miss. Maybe we will emerge as a better nation once the smoke clears--but as you say, it's a long slow event, this bubble bursting.I think it will last awhile.
CWB--thank you for the links! Very disheartening. I do think getting past our differences will be necessary to get through this. I hope that it can happen. I think you are right that this will make the Great Depression seem like the not all that serious Depression. I think we are just at the beginning of the worst of it, and it will be years, not months. Thank you for your thoughts.
Nice job. If not the country, Michigan at least is in a depression which will get worse before it gets better. Sign of the times--the number of page views on my most popular Hub--"Unemployment Compensation Information for Claimants" continues to increase.
Thank you for the hub PG. I enjoyed reading it and learned alot that I didn't know before. I still don't think it's hopeless. I guess I'm an optimist: something really can be done about it.
With the internet we can be global. There's global problems and solutions that can be created.
We can turn to alternatives such as solar and wind power; water for gas technology and solutions to grow non-chemicalized food. Create the solutions on a global basis.
John Lennon did say that he was a dreamer, but not the only one.
There is one man who can trun things around and that is the newly elected American President Barack Obama otherwise I don't see any improvements in the world economy for atleast two years from here.
Check out my latest hub on Motorola Smartphone here http://hubpages.com/hub/Motorola-MOTO-VE66-Gets-Of
Nice hub Pam. Though it's a terrible way to learn a valuable lesson, I am looking forward to the day people go back to a cash society and not feeding and making the monster rich.
yep. knowing what is edible and what is not. Probably pushed me into my new mycology hobby. To me it seems like the whole damn system was this kind of whirlwind of money being blown through tunnels, and nobody saw it because the tunnels were opaque and we all trusted those smart guys who understand them. Everyone's telling everyone else the money is there, so you behave accordingly. Then one day somebody checked, and lo and behold a great deal of money had been sucked out through thtop of the machine. Now everybody is calling their chipa which takes even more money out of the system Boom the whole thing collapses. This 700 billion dollar thing to bail out the banks doesn't seem to be working and bailing out the auto industry may not work either. it may well be that we lose a buttload more jobs really quick. There is going to be pain, but when something finally moves to get the economy going again (isn't the Iraq war big enough I don't really want a bigger one!) the landscape is going to be way altered.
Another great and thoughtful hub Pam! And - surprise! - I find myself in agreement with Richard :O
Great Hub Pam.
The whole shameful subterfuge that was the global financial market is slowly being revealed.
In Australia, we have these no-doc loans. (I guess they're similar to the US NINJA loans - where all you need to qualify is a pulse and the ability to sign a contract.)
Anyway, on 1st November, they are going to become almost non existent, due to a change in the policies of lenders. I think that thisis going to cause a big problem as these loans expire, and can't be refinanced.
Pam,
This is right on the money or should I say a lack of it! Yellow Freight keeps half the bills payed in our household. It looks like just a matter of time before they bust. No it is not getting any prettier but time has a way of cleansing so we have that to look forward to. We are a spoiled lot and it seems funny that many folks are just starting to take note of the downhill run we have been on for so long. The movement is picking up speed and the bottom is going to feel hard to those who do not take action, getting along would be a good place to start that action. Yes we are all in this together, like it or not. Great Hub, you have such a way with truth. Thanks for sharing your mind. C.S.
Thank you for a thoughtful and interesting hub, PG. I knew there were a lot of good reasons why I fanned you and like getting your feed.
It's odd. I am one of those people, the recently middle class. I spent most of my life in deep poverty after having grown up with hidden deprivation under a middle class facade, because my family wound up getting a deal on a house in a neighborhood that was mostly millionaires and tried to keep up appearances.
I think the difference between real and perceived deprivation is going to be the key to surviving this. Because if definitions of luxury and what's upscale shift well enough, that social disaster and panic-stampede isn't going to cause as much damage. He's right. That's like the bank runs.
I have to ask: what's in my reach? I'm a writer, it's what I do. I can also draw real well and teach art. Those are good things.
I've got a website in progress that's going to have a lot of nuts and bolts thrift articles and self employment/paying hobby/side income articles. When people lose their jobs, the ones that have hobbies that paid for themselves still have some fun in life and may be turning the hobby into a stopgap or a business that becomes their new job. I've seen that many times. It's the one way that crisis does become opportunity for some people.
But making that happen for myself as part of demonstrating it is a big part of it. It does take adopting a new and different view of life. I got into it back in the earliest 80s in an apprenticeship job with an entrepreneur.
We'll have to see what happens. Plan for the worst, but also plan for the best and reality usually falls somewhere in between. Maybe this shell game of hiding bank failures will make a difference. It may make a big difference to people who'd lose their savings along with their job if it preserves that.
Hi Ralph--I live in SW Michigan and it's getting bad here too. For awhile people were coming here from the Detroit area for $10/hr jobs but now, not so much. Governor Granholm said that if the Big Three go down MI will immediately be in the same shape as New Orleans after Katrina as far as needing disaster relief. I don't think ti was an overstatement.
Brittney, lalemire, & Jewels--Thank your for your comments. I'm not totally pessimistic either, but I do think we will go through a very tough time and it will last at least several years.
hot dorkage--the one thing I will NOT miss is the faux-job market, a.ka. CALL CENTERS and other corporate work that serves no purpose other than protecting some CEO from the consequences of his greed and bad management. Good riddance to all that.
Misha--Life is surprising isn't it? This economic climate is making for some really strange bedfellows! lol! (o:
Eric, We had those loans here too. One of these days I'll do a hub on mortgage fraud. Most people think of individual homeowners when they think of these bad loans, but there were people who were taking our 30 or 40 mortgages and then defaulting--on purpose. It's so bad they FBI can't even keep up with all the cases right now.
C.S.--Bill, my better half, says if Yellow Freight goes down the whole industry is in trouble. The trucking industry has been kind of hanging on by a thread anyway with the spike in fuel prices this summer, and now this bad Christmas season, factory lay offs, and the possible collapse of the auto industry could very well do them in.
Robert, thank you for your insights and thoughts. As always, you put a hopeful spin on things. In the case of my old bank job, the shell game didn't actually save any jobs. The bank that bought us out has their own corporate center--the don't need ours too. Plus, the say they will announce more job cuts once the deal is finalized in January. Personally I'd like to see more transparency in the use of the $700 billion. Not that I have any better ideas---I just think that it's taxpayer money and taxpayers should be kept up on the specifics of how it is being spent.
Thanks again for all your comments everyone.
Well, ColdWarBaby beat me to it (re tent cities), but I think I've got a few links he didn't post, and I'll go ahead and share them:
BBC video report: http://www.youtube.com/watch?v=CnnOOo6tRs8Article, with add'l info: http://news.bbc.co.uk/2/hi/americas/7297093.stm
CA Shanty Town: http://www.youtube.com/watch?v=jmeHiFZUWtEI think this is the one feaured in the BBC video -- it's devastating to view. There are also videos of Reno and perhaps others that can be accessed from this YouTube link.Reports encampments in San Diego, Chattanooga in Tennessee, and Columbus, Ohio (toward end of article)http://www.telegraph.co.uk/news/worldnews/northame decided to go ahead organize and run its tent city, basically as an outdoor shelter (toward end of article): http://www.cbsnews.com/stories/2008/10/01/eveningn
PGrundy, I'm all for learning what's edible, and I guess that's where we can agree. It's good to remember that food grows on trees and in bushes and lives in and among the wild places. It's good to raise chickens and praise the incredible edible egg. It's good to own our land and to practice thrift and to take responsibility for filling our own stomachs.
I disagree with the idea that we should bail-out incompetence because everyone is interdependent. We're only as dependent as we allow ourselves to be. Rewarding incompetence perpetuates it.
Pam, your intelligent and biting commentary belongs in the NYT!
Hi Aya! It's a fact that people who might disagree on any number of intellectual and political points can usually appreciate food! I find that reassuring. (o:
Rob--Thank you! You flatter me!
Hi, Pam-
Amen to that section about Obama as the Anti-Christ... I believe I made some similar comments on that certain thread towards the end there.
I have heard it is bad in MI. Maybe we are not going to notice all this THAT much here in my part of AZ, because of the extreme wealth/poverty structure already in place. I think my partner, Matt, just might feel it as far as the design of houses, however. He's so resourceful, I admit I don't worry too much...but you never know.
I too, think we should take a hopeful stance. Maybe easy for me, I don't know--I'm used to 'poverty,' perhaps--I have been living that way since my extended stay through school, or actually, at all times growing up--and in some odd way actually prefer it. I think it was Vitaeb, a hubber here, who said something about a depression actually being good for us, making people human again, instead of us all concentrating on false things (He said it much more eloquently!)
As far as the big 3 auto industries--perhaps I support the Michael Moore view of things. Give them the bail out they are requesting, but tell them to start looking to the future with the building of biodiesel cars and light rail infrastructure. Cut the salaries of the b*stards who caused this mess with their money grubbing, suck-it-dry-to-enrich themselves incompetence. 22 million dollar salaries are obscene. Holding on to technologies that will kill us in more than one way is also stupid and obscene!
What has always weirded me out is how tenuous all this financial stuff is. The foundation of financial health--or any health--is always integrity. That means value in what you are producing and value and decency in the way things are managed--including other people. Warren Buffett (of my home town) has always had it right.
Some have said that what we are witnessing is actually the death of capitalism. I do not necessarily agree--I think healthy self interest is actually to everyone's best interest, but I'd point out that 'ol Buffett, for one, has 'socialist' leanings. That's the thing--as it turns out, caring for others actually benefits everyone, including one's self. I wanna see more of those things that are supposed to set us apart from other species--more 'humanity.'
Oh, and BTW, you SHOULD check out the Huffington Post's 'On The Bus' blogging opportunities... They are calling for people from across the country. Opportunity for good writers to be picked up and paid. You'd be great, because you are right in the middle of the action there in MI. My boyfriend keeps saying I should, :), and maybe I will, but I know you are perfect for it.
Hi Lita,
I will check out Huffington. That sounds interesting. My best regular client just sold his economics blog to some people who have so far emailed me twice to say that the blog is losing money, I'm overpaid, and they don't want me. Geez, I got it the first time, you know? They really seem to be total assholes.
I never asked for lots of money--he decided what to pay me, not me. I would have written for him for free because I liked him and I liked the blog, but these folks--if they doubled my pay I'd tell them to go stuff it. I've noticed that writing for the internet is like that--a few really great experiences and a few real stinkers, interspersed with lots of writing about foot powder while you're half asleep. I'm thinking about ways to kick it up a notch. Maybe make a little more on what I write and choose my projects a bit more carefully.
I have some of the same feelings about the economy that you mention here. Part of me is looking forward to it all falling apart, as nuts as that sounds. At the end there, it was just rampant greed and abuse. Who can feel sad to see that go?
I appreciate your support and your willingness to share, Lita. Thank you for reading this hub and commenting, and for the tip on the Huffington call for bloggers. I'll check it out. You should too!
Excellent stuff, PG, and well researched.
I may be WAY off base here, but I can't help but feel that if just one of the Big Three had exercised an ioda of forethought they could have seen this coming. America's oil supplies had peaked decades ago, the global climate change situation was becoming worse by the year, even further alienating the oil industry in the public's eye, and America was starting to look for alternative energies. Some serious research into an auto that runs NOT on gas (when they had the funds to do said research) would have put whichever company that developed it at the top of the heap about now. Would it not?
I have a hard time feeling sympathy for them for keeping their heads planted firmly in the sand. Those I feel for are the workers who will suffer for said short-sightedness.
Hi CW! It's actually much worse than that. GM actually built an electric car in the 90s as a test to show the state of California that people would never buy them and the fuel economy standards were excessive. Instead, people LOVED them. So GM recalled every single electric car and DESTROYED THEM. There's a movie about it called "Who Killed the Electric Car" that is excellent. If you're irritated with them now, watch that movie and you'll be steaming.
Ford's first prototype car was electric, and Ford also built a car that ran on hempseed oil. This was at the turn of the 20th century, 100 years ago. So their BS about how the technology is not ready is just that---BS.
Still, it's getting so ugly and bad. If the auto industry goes down, and it looks like it will, it will hurt the whole country bad. People will blame the UAW, but the UAW didn't make the auto industry destroy fuel efficient cards rather than build them--that was a management decision. Thanks for your thoughts! Amen!
When we're staring into the abyss of a potentially deep and long recession is hardly the time to let one or two of the American automobile companies go down, especially after we've appropriated $700 million for the Wall Street bankers whose recklessness was a major cause of the problem and $180 million for the morons and crooks at AIG. Fair is fair. The auto companies are a victim of the credit crisis not a cause of it. They made plenty of mistakes but letting them fail wouid deepen and prolong the recession. I'm pretty sure reason will prevail and aid will be forthcoming if for no reason than the fact reported in this morning's NYT that the failure of the automobile companies will hurt the big banks and hedge funds and other holders of debt tied to the auto companies and their suppliers. As Donne said, no man (or company) is an island but a piece of the whole and therefor don't ask for whom the bell tolls. It tolls for thee (and for us all). [From memory.]
The rot with the automobile industry set in when cars became a means of personal expression, instead of a means of transport.
Do we REALLY need over 300 (I'm guessing) car manufacturers in the world?
Many providing similar types of competing cars for "normal" people, as well as specialised cars for many niches?
Perhaps a total of 20 car manufacturers would be enough, and the economies of scale resulting from the much larger quantities of sales for each one would make a bailout unneccessary?
I can't help comparing the world current situation with Ayn Rand's epic novel "Atlas Shrugged".
Looks like we're starting to live it in real life.
Cheers, Eric G.
PG, I've heard about those alternative energy/electric cars for years. Thanks for reminding me of yet ANOTHER reason I'm shedding no tears for the Big Three.
I just hope all those people will find other sources of income. Something similar happened in Oregon, during the 70s. The logging industry was going like gang-busters, clear-cutting as if the forests were unlimited (you can still see the empty patches if you take the train through Oregon)... until the hippies and tree huggers raised such a stink that the rampant deforestation was finally curbed and controled. Thousands of loggers and mill workers were suddenly out of work!
People hated those "lousy, smelly hippy tree-huggers" for decades, but you know what? Without them, Oregon would look MUCH different, and uglier, today. I am very glad somebody (alot of somebodies) stood up and said STOP. It had to be done, no matter what the immediate consequences.
I have a feeling people are going to look back on this time and the Big Three in the same way.
The best hope is in millions of little personal revolutions. I don't think the big things can be fixed by big actions - they're too broken for that. One of your commentators talked about a global bubble slowly bursting. It's a good image - I see the slowness not the speed of this 'downturn' as evidence of its enormous size and inertia. There's no stopping it. So, personal revolutions: People weaning themselves off credit and off superfluous consumption could have a positive effect. But it's difficult because moderation isn't sexy from a soapbox. Especially when the guy on the next soapbox is recruiting by blaming everything on immigration, socialism, Islam, or (as we've seen) an antichrist.
Hi Ralph--Let me be clear about Detroit: I'm angry with management for running the industry into the ground, pig-headedly doing the same lazy thing over and over, but I think having a healthy auto industry is essential to the U.S. I think it's possible to be both angry at the mismanagement AND think we should get them through this tough time if we can.
I also think the attempts to bust the union as part of this are despicable. The only reason Toyota & Honda are competitive is because they don't have a bazillion retirees...yet, and because they don't have to pay health insurance benefits overseas. If we had universal health care in the U.S., we would be competitive--most of the union issue is not over wages, it's health care. Even Henry Ford thought workers should make enough to be able to buy the cars they built.
Hi Eric--I'm not an Ayn Rand fan at all. I'm probably the AntiRand, lol! But I think the problem isn't the number of auto manufacturers, it's more that the world is changing faster than the auto companies are changing--especially U.S. auto companies. I think if the Big Three go down it will put a Big Hurt on the whole country. We'll see what happens I guess.
CW--It's true, sometimes change just has to happen regardless of the pain that accompanies it. If the Big Three fail (or when they fail), I hope the U.S. finds a way to encourage makers of alternative vehicles here. We need an industrial base here. Not everyone can be CEO of Citi. BTW I'm really not happy about the U.S. backing Citi with no voter input, no congressional input---this "too big to fail" line is getting old.
Paraglider, I've come to a similar conclusion. Over the course of the past year we've tried to become as self-reliant as possible. I've been trying to set up multiple income sources, we installed a low-carbon pellet stove that is very cheap to run for heat, we planted fruit trees and a big garden, and we paid off our one newish vehicle. We'll keep paring down too, as far as we can. I think it will get quite bad. The party's over.
Neither am I. I don't think that attitude will change until people stop buying their product and/or supporting them. The change will come about slowly, in most cases, but I do see it coming about.
Excellent hub! You did a great job presenting the information in this hub. It shows the effort & research that you put into creating this hub. Thank you the information.
marketingmergenow
Thank you marketingmergenow, I appreciate the kind words.
When there is a crisis of this proportion it can act as a cattle prod to focus on solutions. It's a mistake to try to solve the big solution. No one can do that, and it can be overwhelming causing you to throw up your hands and say, "What's the use!"
Focus instead on what you can do in PARTICULAR to solve a problem that others want an answer to. Like the person who put a little silver in those bags and made the produce last longer. Something simple, but with an obvious benefit others want.
If you do something like that, you can prosper when the economy is not doing well...and you'll be helping to improve the economy in some small way.
I share what I know about how to solve health problems that people want the answer to. People appreciate that, so I end up getting paid doing what I love to do.
My income has been going up lately, even though I've retired. I hope that is an encouragement to you. Solve a problem for someone. That's what people want. And that is what makes the economy work. You might not end the recession or depression by yourself, but you won't be a victim of it.
The best to you.
Kelley Eidem
Together we can cure cancer - one person at a time!
It's a conspiracy, man. All kidding aside, the oil rich nations who would like to see us fail and who have tried in several ways now have the perfect opportunity. They raised the priice of oil so that US autos would be undesirable. When gas prices went up, the cost of most everything else went up. Now they have lowered the price to a point of almost deflation. But, the consumer prices for other goods have not reflected the immense drop.
They have bought up low ranking stocks that used to be worth much more and each day they conrol more and more of our every day life. They couldn't bomb us off the map. They'll buy us off of the map.....and who is the one person who can stop it? Barrack Obama. The same man that most conservatives feared.
After we lost our health insurance early this year, our visits to the doctor have sharply dropped (none). We try to find suitable remedies over the counter. One of the major expense was the dermatologist for my teenagers acne. Researching the internet I came across Niapads and it worked (http://www.bestsyndication.com/?q=node/19875
Difference b/w Great Depression and this one - access to information and choices. Hopefull we will pull out of this one soon. Alternative is unthinkable. If only I can find an alternative to my OB-GYN.
Hi Heathermom--Yes insurance is a big problem. Even people who HAVE health insurance often can't afford care. I lost mine this year too. I try to eat well, exercise, get enough rest, and then let it go. Eventually I think we'll have to totally overhaul health care in this country, but I don't see it happening very soon. Thanks for your thoughts!
I love the article you've written and how you've tied it into the great depression of the 30's. I find it to be an extremely well written piece of historical journalism that relates to modern times. This is an extremely rare talent and your perspective deserves accolades.
Wish you all the best in the coming turbulence and know that opportunity will be at its greatest point soon.
Shaun
Thank you Shaun! I appreciate your positive feedback. All the best to you!
Hi Pam,
I just got round to reading this hub, on the same day that our UK news featured the demise of Woolworths, a hundred year old institution on High Streets throughout Britain. Here in the South we've scarcely been affected yet, but I feel the unease in the air. When I collect my nine year old from school each day I usually arrive a few minutes early and catch up with some of the other Mums. These days I'm noticing a fair sprinkling of Dads at the school gate too.
I ran into an old friend earlier today. He has a mail order business locally, and I asked him how things were going. 'We're all right for now,' he said, and he went on to explain that he'd seen this coming for two years or more, and had shed staff through natural wastage, and cut out all marginal product lines to keep the business as slimline as possible. Well that's fantastic, and I'm glad he has the gift of foresight. What a pity our mutual governments only have the gift of hindsight!
Hi Amanda--Yes it's getting bad here too. The bank job I quit disappeared anyway two weeks after I left, and Bill's job here shut down a little over a week ago and now he drives 60 miles to work at one of their hubs in a bigger city--most of their employees were simple let go, but he has 20 years in there so they gave him and 9 others the option of staying and commuting or taking a buyout. The buyout wasn't really enough to get him to retirement and there are no jobs here, so he's doing the drive but he hates it. He's been working 12-14 hour days so basically M-F he has work and nothing else.
I think it's going to be a lot uglier than what we're hearing on the news. I hope I'm wrong but I doubt it. Thank you for sharing what's up in your neck of the woods!
Don't be a dinosaur...chose to evolve instead of choosing to fossilize! Do you recognize the opportunity that a recession or depression presents? Change your perspective...change what you're looking for and change what you'll find.
Don't know what I mean? Check out my hub at:
http://hubpages.com/hub/Save-a-Dinosaur
Here's hoping that you save a dinosaurRob
Since I am in an industry that has been hit hard(construction), it seems that it will be many years before the wheels start moving again. I think the one factor that hurts America's recovery is that fact we have no production as most manufacturers have headed to Asia. I think the government needs to open up trade talks and revise some of these agreements to bring jobs/factories back to America. I enjoyed the hub.
Thanks for the great hub! I vacillate between watching the talking heads on tv/internet and being scared and between being optimistic and trying to be thankful for what I have while looking forward to the future esp with a new president. My husband and I are currently employed with great health insurance but I was recently diagnosed with a serious health issue and may need to take an (unpaid) leave from work. Hubs like yours and the comments they generate help us all to know that we are not in this alone - thanks again!
Another super great magnificent HUB pam! Thank you.
I was wondering, since the baby boomers were all born from 1946-1964, what do today's actual numbers look like compared to The Great Depression? What I mean is, how does 8% of todays population compare to 30% of 1930?
Another thing, and I've mentioned this before-since there were more millionaires made after The Great Depression than any other time in history, and again after the recession in the 80's, what does this mean for us today? In his book "The Next Millionaires", Paul Zane Pilzer predicts there will be 10 million more NEW millionaires by the year 2016. Sounds crazy, I know, but it is historically backed. Your thoughts?
Hi goldentoad-- My son in law is a steelworker, and his work has dropped off a lot too. Plus, he's a union worker and lots of companies are using nonunion labor when there is work, which seems to be like not the best way to save money (steel work isn't all easy, some of it you have to actually know a lot to do it correctly and safely). I agree about manufacturing. We've lost so many jobs overseas. We can't be a 'consumer society' if only white collar workers make decent money--but lately they don't even make decent money. Thanks for your comments.
Susan M--Right now is a terrible time to have a serious health issue. I hope it all works out for you. I also hope Obama doesn't put the health care crisis too far on the back burner. That could actually easily be the next meltdown. All the best to you!
Paradigm Shift, I think whenever there is major change there is also major opportunity, and we never know--any of us could seize an unforeseen opportunity. I think that the way unemployment statistics are calculated these days it minimizes the severity of the problem. Today's statistics don't take into account people who have been out of work so long that they no longer receive unemployment, people who don't qualify for unemployment, or people who are so underemployed they can't pay their bills. Lots of middle management people and skilled tradespeople have been downsized or can't get work and have gone from wages that could support a family to part-time retail or service sector jobs that won't even support one person. All of that is hidden by the official percentage. Some analysts put the figure right this minute at closer to 12-13% unemployment--still half the Great Depression figure--but not good. And I do think it's hard to get accurate information. Thanks for your thoughts!
Times were good for so long... and everyone lost perspective of what reality is. How could this not have happened?
As for the American auto companies... they have been squeezed more and more and more from both sides... the government and its mandates and the union and its greed for more and more and more till there is no more squeeze room left. What company can indefinitely sustain wages of 70 or 80 dollars an hour.. that is including benefits.. to its labor force while being forced to spend millions more on cars production to satisfy the governments demands?
Those companies are now being made the scapegoat for all our economic woes... with Congress forgetting all about the bailouts of AIG and the banks with how much??? 700...800 billion???? And for those congressmen to have the nerve to castigate the auto execs for flying on their corporate jets to Washington while they have their own private jets.... the congressmen..is absolutely preposterous. And didn't the execs of AIG go directly from getting that handout to a luxury vacation?
Self responsibility.. honesty.. character... traits sadly lacking in todays society.. are direct causes of every woe we are suffering. How many have wanted everything for as little as possible of eveyrthing...money, effort , work? Power.. honor.. glory... self emulation.... they are traits also directly responsible for every woe we are suffering today.
It had to happen... and unless we tell government to get off our backs.... instead of looking to government to bail us out WITH OUR OWN MONEY.... it will never ever ever get better.
Hi silverstar--Thank you for sharing your thoughts on this. I do think though that the UAW is being unfairly scapegoated. The average wage for a Detroit auto worker is between $15 and $25 an hour, which works out to between $30K and $50K a year--a decent middle class wage and not extravagant in my view. I think it is fair. The $77/hr figure you hear thrown about on the news is an artificial number created by taking all the legacy costs (that is, the costs of all the pensions and retirement and health care benefits of every UAW worker still living even if they are no longer working) by the number of working members. No one on the line is making $77-$80 an hour--this is a number designed to bust the union and get people worked up and resentful.
Toyota and Honda pay their U.S. workers comparable wages but they don't have the health care and reitirement expenses that GM & Ford have because they haven't been in the U.S making autos as long, and Japan doesn't make it's companies pay for health care.
So right now, weirdly, people making $8-$10 an hour (like me) are paying, with our tax dollars, to bail out guys who make millions. That is so sick.
But I don't blame the UAW. I was married to an auto worker. The first two years we were married I earned more than he did at my $8900 per year PBS job--that's because even after 15 years working there he was laid off about half the year. At 20 years he got to where he worked steady. He made about 40K then and deserved every penny. The year before he retired two guys were killed on the job--by tires that blew off an assembly part--a not uncommon occurence, even in this day and age.
It's not the UAW that's bring this country down. But the people who are bringing it down would love for you to believe that it is.
Thanks for commenting!
Pam- Glad that you mentioned that 30% unemployment rate as lots of dooms day predictions are floating around. I have faith in the spirit of American Innovation to weather this worst storm. America is more connected to the world than any other country and if it is affected adversely then the world as a whole is also affected.
Also I hope Obama makes education more affordable and for people already suffering from huge educational loans some relief is provided. My dad always used to say anything can be taken away from you but not your education hence relevant education is a worthwhile investment for a life time. One of my friend in California lost a job and put his resume in Monster and got a job offer from Australia. Education (and particularly US education is highly valued the world over) and if one acquires those life skills early in life then the whole world becomes one's job market.
I hope for the sake of the millions of blue collar workers the Auto bail out happens and the management team is shaken up to take correct decisions this time around.
Silverstar, auto workers aren't receiving $70 an hour. The cost of the wages and benefits of auto workers are working are around $45 and hour roughly the same as those at Toyota and Honda plants in the U.S. The $70 represents the "legacy" costs for pension and health care for retirees which were agreed to many years ago, in some cases after concessions on cost of living allownace increases to off set the benefits for retirees. Do you think it would be fair to break the promises to retirees who are relying on them in good faith?
I'm not saying, however, that the UAW is blameless. There are plenty of inefficient agreements, grievance settlements and practices in the auto plants that are overdue for correction. One of the worst of the lot is the infamous "Jobs Bank" agreement which arguably is the dumbest agreement in the history of collective bargaining. It was agreed to, if memory serves, in 1982 by an incompetent GM head of labor relations, Alfred S. Warren, Jr. under the supervision of CEO Roger B. Smith. The UAW then took this insane agreement to the other two companies.
The problem with bailing out the auto industries is that no one is buying cars. It's the same here. New car sales are dead in the water. Yet if nothing is done the industry's infrastructure will be so damaged that it may not be able to resusitate itself should the fabled economic recovery take place.
Hi countrywoman--I agree that we need more accessible education here and we need better education period at all levels. The public high school my kids attended has a 55% drop out rate! That is just unacceptable, but it's fairly standard in that part of the country. Kids know that the same crummy jobs await them whether they graduate or not, so they just drop out and buy a hairnet. We should not be wasting our young people that way. thank you for your thoughts!
Ralph--Yes, if you include benefits your figure of $45/hr is about right, but without benefits it's not an outrageous wage at all--and we need benefits in this country since there is no social safety net to speak of. I'm sure there are dumb UAW clauses in contracts but to my mind the anger at the UAW lately is misplaced. Instead of being mad that a few people are paid decently, why not be mad that we aren't all paid decently? Why do so many working people seem to want to see everyone reduced to $8/hr with no benefits? What is that all about? Who is going to buy houses and cars when that happens? Not people making 8 bucks an hour, that's for sure!
Amanda--I agree. The bailout of the auto industry has to happen to keep it afloat but how does it make people able to buy cars? I think it doesn't. I think no matter how much money we pour into it, if people aren't making money and spending it, it's all irrelevant. No one is talking about that yet, but they will be, that's for sure. We just seem to leap from one crisis to the next lately.
Ralph- I never knew blue collar workers make that kind of money. No wonder why bother to study MS or PhD (and spend thousands of dollars) when without the same education one can get into these auto companies (if one has the right connections) and make the same kind of money. WOW!!$70 dollars an hour works out to quite a sum and no wonder that American cars due to their high cost of production are resulting in lower profit margins compared to the Japanese car makers.
Coutnrywoman--If you reread Ralph's comment and mine you will see that auto workers do not make $70 an hour. They make around $25 an hour, $45 if you include the value of the health care and retirement packages and other benefits. In the U.S., $25 an hour is about $50K a year and you need every drop of that to live in even a modest house and raise a child or two. So they are not rolling in money. Toyota and Honda pay similar wages at their U.S. factories.
I have two college degrees and have never made $25 an hour in my life much less $70 an hour. When I worked for the bank I made $12 an hour and people around here thought that was "good money". $12 an hour is just under $25K a year. It's very hard to live on that even as a single person in the U.S.
I don't know anyone with or without a degree here in Michigan who makes $70 an hour except attorneys and doctors. Most people make between $8 and $15 an hour, and it's very hard to get by. A two bedroom apartment here costs an average of $725 a month--there goes half your month's wages right there.
Pam- When I was typing my comment I didn't see your comment. After I submitted I saw it. So what you are saying is they don't make $70 per hour. Thanks for correcting my false perception. I apologize for saying those things based on earlier comments. I agree we need to be able to pay for our family's education, health, food, housing and other expenses then 25$ isn't much of a money to do all that and also plan for retirement (which I heard social security won't be their in 10 years from now). Hope you forgive me for making those statements. I am really sorry if I hurt you in any way.
I think it's a huge mistake to bail out the auto companies. I don't see how one industry is more important than another when it comes to a bailout. Thousands of private businesses fold (or go into Chapter 11) everyday and thousands of people are put out of work. The auto industry is not a savior to the US. Maybe in Michigan, but certainly no place else.
Great Hub, Pamela!
Hi countrywoman--I'm not hurt at all! I just didn't want you thinking there's all these $70 an hour auto workers running around. It's been all over the news, but it's so not true! lol! No worries! (o:
Hi rockingjoe--Well, I hope you are right, but it looks to me like the midwest will go straight down the tubes without it. Estimates are the related job losses would exceed 3 million--most of them around here, but lots in other parts of the country too. Most people don't realize how many businesses depend on the auto industry to be profitable.
That said, it's hard for me to see how the bailout will save them. As Amanda pointed out, the problem is no one is buying any cars of any kind, so, you know, that has to be solved first, and I don't see a quick solution there. Somehow I get the feeling that whatever happens, you, me, and most of the rest of us will be the bill and we won't have any cash on hand to pay it. I'm broke already! I need a bailout! lol!
Countrywomen, the auto workers are well paid but they do not make $70/hour. That figure includes the cost of pensions and health care for workers who retired years ago. Auto workers hired before the new agreement last year make around $25/hour. Those hired after last year's concessions became effective will be paid around $15/hour. In addition they will receive health care benefits, but no pensions. The union made huge concessions last year in order to save jobs and help keep the companies from going under.
Sorry for repeating Pam's comment which was correct.
Also, don't worry, Social Security will be there 10 years from now. It's more important than ever because defined benefit pensions are disappearing. Fewer and fewer employers provide them every year. Now most employers provide 401k plans only.
http://hubpages.com/hub/Social-Security-Reform-by-
Ralph- Now this is totally confusing me. Do you mean earlier it was $70 then after some time it came to $25 and now it is $15. Now it seems the ones who negotiated it at $70 are to be blamed for killing the goose(Auto Industry) that lays the golden eggs. Because usually factoring in inflation the wage rate should increase over a period of time and not decrease but in this case it is just the opposite. I don't want to assume anything anymore can some one please clarify what I said is correct or not.
No one ever made $70 an hour building cars. That number--$70 an hour--is a made up number that comes from adding in all the legacy costs of retired UAW workers and dividing that all by the number of active workers. There are no geese. There are no eggs. Auto workers WORK HARD and make $15-$25 an hour in actual wages. They are frequently laid off for short to long periods, which reduces their annual pay. They have been watching their wages and benefits decline in recent years as they make more and more concessions to keep their jobs. They sometimes are severely injured or even killed on the job.
As for factoring in inflation increases, usually that happens but in today's economy all bets are off. Many jobs are seeing wage decreases not infation increases. Real wages have not been keeping up with inflation in the U.S. for ten years now.
Pam- Thanks for that clarification. I hope those who are adversely affected on the job have sufficient insurance to take care for the rest of their lives. If something fails people try to analyze the reasons and same is the case when these Big 3 have gone to seek bail outs. I guess you can have a specific hub about the causes leading to this sorry state of affairs. I am once again sorry if my phrase made you feel bad. I guess I am saying things differently than how I intend to say. I really don't know much and trying to understand how the country that invented car has reached this state now.
Hi Countrywoman--You never have to apologize to me, I almost never feel hurt by things people say in comments, and especially not you--You are always so nice. I'm sure I'll say lots of annoying things before our lives play out! lol! Seriously, we are all wondering how things could have gotten to this sorry state. I have opinions about it--that's a good idea, maybe I will put them all in a separate hub. Thanks!
Pam- Thanks for your understanding. I guess I am looking for answers and that $70 seemed too appealing to believe and convince myself but I guess it could be much more complicated than my simple mind can comprehend. I hope you put a hub titled "Myth about Auto workers earning 70$ or What went wrong with auto industry and what can be done to fix it"
Very true. The $70/hour is very misleading.
An old Chinese curse goes, "May you live in interesting times."
Thank you for this well-argued piece of writing! Best of luck to your and your partner in these interesting times.
Here's the best explanation I've seen of the labor cost differential between U.S. car companies and transplants:
http://www.nytimes.com/2008/12/10/business/economy
Thanks Citizen of Earth. I appreciate you taking the time to comment.
Ralph--I saw Leonhardt's article in the NYT today, thanks for posting the link. I thought it was pretty good, but it still provoked an avalanche of union-hating comments about how UAW workers make too much money and cars can get built in Mexico for five bucks an hour. The whole point of Leonhardt's article was that Detroit is failing not because of union wages and benefits (which are comparable to Toyota and Honda--he came up with an $800 per car difference which is cancelled out because the Detroit cars are already $2500 cheaper) but because of poor management and bad products--yet people responded by bashing the union anyway.
I think people just want to be mad at somebody, and they don't know any CEOs but they do know some UAW guys, all of whom make more money than they do, so the UAW takes the brunt of the public's rage.
If we reduce U.S. wages to be competiive with Mexico and India and China, then no one will be able to afford to buy cars at all, so it won't matter if they run on air--if you don't make enough money to buy one, what difference does it make how energy-efficient they are?
I have grave misgivings about this auto bailout, and yet, if it doesn't happen, that's bad too. And I'm so sick of union bashing--just sick of it. I'd like to take every one of these people who are carping about unions and hook them up at any of the call center phone lines I've worked on over the past ten years--you know, the jobs where you aren't allowed to pee and you make $10 an hour while being told how you don't deserve it over and over--They wouldn't last a day, not one day. And when the auto industry finally fails and NO ONE has a decent job, they'll be the first ones screaming about that too--and I guess they'll blame unions for it.
I think Detroit is not going to survive in its present form. I don't see how it can, no matter how much money the government throws at it. Hell I don't know anymore if the U.S can survive in its present form! I guess we're about to find out. I don't envy Obama. What a mess.
I foresee a huge mass protest beginning within the area supported by the big three auto manufactors. Instead of realistically addressing the problem, however, I see Govenment sending out the troops who will respond will completely unjustifyed violence. The people will not take it laying down. violence will be met with violence and the situation will get very nasty indeed. People will shake their heads when they hear of the atrocities saying that they cannot believe that it is happening in America. The terrorist will be closly watching this event. Expect a massive attack to further exaserbate the situation.
Yikes. I hope you are wrong, but it could happen. I was just thinking that this would be the perfect time for a terrorist attack (from the terrorists' perspective). No one really in charge, the economy about to collapse, lots of chaos and job loss---it looks bad. January 20 looks far away right now. Thanks for your thoughts.
Very well researched as usual pdrundy. Australia's economy is going down the tubes fast as well.
Our motor industry is still making large cars. The world has enough cars. I hope that we can find an alternative fuel to petrol as it will go up in price again. The problem is that we already have 600 million vehicles on the road, and electric cars are no solution to fueling what we already have. To survive Detroit may have to become a fuel conversion centre for current Internal Combustion Engines to keep the ones we have running and improve them by designing better fuel delivery systems and fuels to lower emmissions from the cars that will still be with us for 30 years or so..
I agree, no one in the motor industry is well paid here either, and it can be a dangerous job, as well as being dead set boring and repetitive. I have been in the motor industry a long time running my own businesses for the last 40 years.
I am over it. I closed my business recently and will not be starting up another one in this lifetime.
We will probably lose our motor industry anyway, despite our government recently bailing them out yet again. Detroit will be lucky to see another 6 months even after the bailout if car sales figures are any indication.
I wish my American cousins all the best in the future, and I sure hope your new government under Obama can survive.
None of the bailouts will ever work. They cannot. The scare tactics used to ensure that bastards bankers got bailed out and not the American people still makes me sick to my stomach. What a con!
I had hoped Obama would reverse this decision, but fear and ignorance will make it an impossible task for him, as the American public would not likely support such a move.The self interests of the rich will, as always prevail. The whole world is suffering while these low-lifes pilfer all the trillions for buy outs. The big banks will be bigger than ever after this, and it would have made sense not to trust them at all.
The fact that treasury inserted section 8 is proof positive of the arrogance and endless greed that is still running America.
Hi earnestshub--I agree the auto industry won't make it, even with the bail-out. In order to buy new cars (of any kind--gasoline-powered, electric, cars that run on air) people have to make decent wages, and very few do right now. I think we go through a very bad 2009 and at least three or four rough years after that, and that's if everything goes well--which it might not. If we're attacked, if there are significant environmental catastrophes-that's going to prolong it. I would like to see an investigation of the use of this bailout money for the financial industry, followed by indictments. But I doubt that will happen. Thank you for your thoughtful comment and best of luck to you!
Now Citibank wants the government to take 40 percent of the stake, a minority stake, with a majority investment. Talk about a fascistic rip off of the middle class. made me so mad I just did a hub on how the fascist government is continuing to screw the middle class. I tell you PGrundy, they are killing the golden goose.
Hi bgamall--Obama is speaking tonight. I hope he has something to say that is a bit less grim. It looks so bad now. AIG wants more money too. Unreal.
Thanks for writing such a great hub! You are in Michigan which has been extremely hard hit by the auto industry downturn and other factors. By some accounts, certain parts of Michigan (and other midwestern areas - take Elkhart, IN for example with 15% unemployment) are in a depression. By the way, maybe we don't have a 25% unemployment rate yet, but we are at the beginning of this thing, whatever you want to call it, and unemployment is increasing at a rapid rate. Also, the way that unemployment is calculated these days is different than the way it was calculated back in the 1930s. The unemployment rate that is quoted by the press is the U-3 unemployment statistic which does not include workers who have given up the job search, or are underemployed. If you count those other folks, the real unemployment rate may be more like 15% to 17% depending on who you talk to. Also, we have about 31 million people on food stamps in the U.S. that's why we don't see the bread and soup lines that we saw in the 1930s. There is also unemeployment insurance too, which we didn't have back then.
I believe that we are in a mitigated economic depression. My hub is here if you're interested: http://hubpages.com/hub/Gold--Silver-and-the-Spect
I try to keep it updated with news that is important, but largely ignored by the mass media who are too busy reporting on American Idol or celebrity gossip etc.
Your hard work on this hub shows and is appreciated. My grandmother could talk about nothing but the depression when she got old. I think it had a devestating effect on the country. A lot of the people who got through it became hoarders, never getting rid of anything.
Great hub. Congratulations
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Every single one of my 11 year old daughter's friends has a cell phone. She goes to public school and two of her friends live in single parent households. We aren't talking about rich kids here.
THIS IS NOT COMPARABLE TO THE GREAT DEPRESSION! Droves of children were starving in the streets. I am sure you can find children and adults in poverty today, but it's just not the same.
As far as the auto industry is concerned, many auto employees are grossly overpaid to begin with. I interviewed a potential student at the school where I worked who was about to lose his job. He made $80,000 a year for running a machine on an assembly line. He only had a GED. I have four years of college and was working in higher education, making only $40,000. I really can't feel that bad for this guy if he didn't save enough money to plan for the tough times.
Mark my words,there is a wave of politicians,inventors,entrepreneurs,business people and visionaries coming out of this recession.WORLDWIDE.In a few years there is going to be some real changes on the political side and the business side.
I believe the next election will see many Republicans, and Democrats replaced by Independents. The only way to take back our government is to vote against, and remove those elected officials who ignore our voices. They are no better than the CEO’s that have allowed their companies to fail through greed management.
Our government structure was not intended for the wealthy to be the ruling class. The founding fathers declared that our government leaders should be elected from within the general populace--- the working class and poor. After all, their concept was "a government for the people, and by the people."
Knowledge, participation and keeping informed on WHAT your government is doing, or not doing is vital. An informed voter is a strong advocate for good government. Why keep rewarding (through reelection) leaders who pander to lobbyist and special interest?
Media displays what a lack of knowledge looks like…
http://www.youtube.com/watch?v=fJuNgBkloFE
Marian Swift says:
8 months ago
Our small city has a new downtown, about 8 years old. It's sort of a glorified strip mall, but it's become the gathering place in a city that had lacked one.
Or at least, it was. Last night I stopped downtown to catch some fast food. I found parking right away, smack in the center of downtown. That little feat should have been impossible at dinnertime. On top of that, I was able to jaywalk effortlessly -- both ways -- across a street that, by rights, should have been chancy even at the "Walk" light.
The windows in a couple of my favorite food choices were dark. Fortunately, Choice #1 was open for business -- I hoped there wouldn't be a long line. Well, one lone diner was sitting there when I walked in the door. After he left, I was the only one in there. No one else came in the whole time I was there. Still had to wait though -- the staff had been cut past the bone.
All of this is a roundabout way of saying "Yeah, you're right. It doesn't look good."