tent cities in California...
http://www.youtube.com/watch?v=C...h?
v=CnnOOo6tRs8
The characteristics of this depression will be much different than the others though. Demand is currently rising for food and oil. Food we have a lot of, oil we need a lot of. Even though I think most of the oil speculation is based on using it as a hedge against the falling dollar, it ain't gonna make it any cheaper at the pump. And that is really sucking up discretionary spending.
The fact is that for most of us this recession/depression has been here for awhile. This car just keeps getting deeper in the mud no matter how much we spin the tires. It has to do with the end of middle wage earners and the bifurcation of the American economy with the immense profit going almost exclusively to the extremely wealthy. And did the Democrats stand up against this extreme disparity of wealth? No...they created a corporate wing that effectively controlled the party since the 90s. Our economic crisis was precipitated by a massive political one.
Let's face it. The end of the housing boom fueled by subprime mortgages was like a ship slowly scraping along the side of an iceberg. The ice provides a temporary stopgap but is what eventually causes the ship to sink.
All in all this period is required to further restructure the economy along one of the third world. The middle class losing money and privilege was always going to require some sort of economic and political emergency to make them think that their sacrifice was worthwhile. Add to this conservative Republican ideology steeped in the cult of "pull yourself up by your bootstraps capitalism" and you get a recipe for a lottery society. Few rich people but for us don't it look grand, I only need to win the lottery and I'll have it made like they do.
This type of alarmism is easy to understand, but it also doesn't fully encapsulate the slow steady decline of this society. It's in the interest of Europe and Asia to continue the slow steady pace of our economy's decline so that they can bleed out dollars at a constant rate. Having Bush in power for 8 years has given the capital-producing countries a look at a world where the US government is unable and unwilling to take the lead on issues of fundamental importance to the future of the world. Thus they have a new template and a new conception of their power outside of US influence.
Russia has the most billionaires in the world. The US will pass them as our country restructures and privatizes its massive public infrastructure further. The vast majority of us will be poor while top ten percent will be immensely rich. Don't plan for a uniform depression. Just count on the wasteland of our depressed urban and rural areas will expand exponentially.
In 1929, the USA was self sufficient in oil. We were an oil exporter.
In 1929, there were many factories sitting idle but still here.
In 1929, there was an unemployed labour force that could actually make things if they could have found work.
Fundamentally, the factories have been closed, stripped, machinery moved to other countries and the property turned into barrens. The educated laborer is gone. The last of the greatest generation workers are dying off rapidly.
The oil dependent suburban lifestyle is a product of the 50's, America went from being an exporter to being an importer of oil in the mid 70's.
There are no savings in the USA. The national savings rate is negative. Without savings, there is no equity no incentive to invest.
The only thing that pulled the USA out of the great depression was the second world war. We already have a world war that is much more costly than the original.
We have an import crisis, not just of oil, but of things. We are now a net importer of high tech items. The exporting nations have subsidized our purchases with cheap loans ( the japanese carry trade is the heart of the beast ). Now the Chinese have stepped back from buying US govt debt.
All those dollars in sovereign wealth funds and forex accounts have one place to go. We are being bought with our own worthless paper but that paper is not in our hands but in the hands of our creditors.
Overll I think Jesse is an optimist.
Invest in yardarms, lamposts and portable guillotines. Forget about investing in tar and feathers, both are imported.
A depression is technically 25% unemployment, not 1 in 6 persons. It is hard to tell just what will happen if one looks to the past since the economy is more internationally based now than it was in 1929, and the regulatory events that are already underway can slow down or divert certain normal monetary and investment failures.
The advice to sell the overvalued house may be somewhat late by about two years.
Having no debt is a good place to go, but having basic expenses and no job is still the problem.
Basic expenses and underemployment is the place where most Americans have been for some time and the housing scam was the previous solution to creating free money. Perhaps now, there is no solution.
So, very interesting that Jesse would now recommend leaving the country.
So would I, in fact I did for similar reasons {the previous oil crisis and political crisis}thirty years ago.
I am very used to third world realities now, and perhaps if one wants to experience life that way, just stay in the US, because it is getting back to pre-industrialism very quickly.
On the other hand, for the average person, not particularly talented enough for another country to be all that excited for them to become a citizen or guest worker, just which countries would Jesse recommend moving to, particularly if one just has debt and no credit or savings, a common situation in the US?
My question is serious, not facetious.
No, I'm not going anywhere, but life here is going to be uglier than the late 1970s and early 1980s.
My partner was laid off in June of last year. She had 26 years in as a college prof (at a for-profit U-no tenure, no unions) and is one of the best undergrad teachers I've seen, period. That said, she's working part-time now as an adjunct prof. Her new school loves her, but has been very clear that she'll be part-time from here on out. Given her age, we're sanguine about her never working full-time again.
We had been "downsizing" for a couple of years (most anyone could see the crash coming--Steve G surely did), and we hate debt (our parents were depression-era kids, so thanks to them, we knew/know what to do). We have 2 cars, but rarely run both. The car that gets the better mileage is the one that gets used. I'm also a prof with tenure and a union, so I try to do most of my writing at home. The days that I'm teaching, I try to be at work all day to handle appointments, etc. That has also chopped car useage down to the bone.
While I'm not going to blow horns about moving out of the US (I'm committed to this country--economic warts and all), I would encourage everyone to just hunker down if you can. Pay off debts as fast as you can, max out your retirement savings, if possible, bundle the chores/work you have to do if you drive, and believe it or not, replace the incandescents bulbs with CF's.
We managed to chop our electric bill nearly in half by gradually installing CF's around the house. I have some vision problems, so I replaced the standard 60 watt bulbs with 100 watt CFs, which are about 30 watts in actual consumption. So, more light, less power.
It IS a life style change, but for many of us boomers, we really DO know what to do. My dad was so fiscally tight that some days he looked like a hobo. But his finances were always in the black.
Remember: Socialism in the US is ONLY for the corporate big guys. The rest of us need to protect ourselves, because we're going to get stuck with the bills.
"We have an import crisis, not just of oil, but of things. We are now a net importer of high tech items."
The more I read these things and think about them, the more I'm reminded of the end of Roman Empire, when Rome was just a massive city which had to import everything from far away, far beyond Italy, including food and most luxury and basic resources. Only the empire and the legions assured the overpupulated Rome's survival. Then the legions got beaten, provinces seceded, and the empire fell. And Rome went from 1 mio to 20'000 people in 2 centuries.
things to note....when we go (or more improtantly when china gose, the rest of the world will fallow...moving may not land you in a better situation.
two sellign your upside down house may not be the best answer...soem folks are playign chicken with the banks right now...tryign to get tehm to write off chunks of the debt...it may be best to stay where you are (hell if the guy who owns your mortgage don't exist any mroe who do you pay?
it aint all doom and gloom folks. new factories can be built (giveign construction jobs on the way..and built better,more efficant) skills can be learned (besides there are stil a lot of machinist, press operators and what not who recently hjob changed to IT in the last 20 years...they can switch back). We still have a lot of raw materials in this nation, and well alternatives to ground oil can bridge the gap while we devlope a better energy source (im a big fan of biomass, any positive gain energy source that has a biproduct of bacon is a winner to me, we jsut need soem tiem to scale it up).
We need a new deal, we need a leader that can bring us out of the wilderness into a bright future.
make no mistake a storm is coming, and it is bringing change. the more you fight agenist it the more violent it will be...but after its passed teh world will be renewed.
This what I always have a problem with when discussing economics. It's either "The sky is falling!" or "Everything is rosy".
Between Bush and the hyperventilating of the last few days I wish there was a less alarmist analysis out there for us lay folk.
Forgot to add this.
Don't worry folks it's not a depression you'll just get live like black folks for a few years.
Enjoy.
If you can legitimately and legally leave the U.S. for the next five years, move.
After witnessing the abject stupidity of American voters during 2004, I decided that it would be best to leave for a few years until the country came to its senses and the economy improved. I'm a dual citizen now in a G8 country. Since I have desirable skills and education, a small support network here, and know how to work banking bureaucracies, I was able to establish myself fairly quickly with only minimal fuss or shift in lifestyle (if you don't have most of these things lined up, do not move. Unless you're very wealthy or a celebrity, your mileage WILL vary).
This time last year, in anticipation of the end of the Cheney administration, I began planning for a move back to the States. I missed my family and friends and my home city, and while the economy was still stagnant, it didn't seem like it could get worse than 2001-2003 (especially since Bush and his gang were supposedly lame ducks).
Last November, those plans went on hold until at least 2012. And my American friends and family, disappointed though they are, all understand completely. I love the U.S., but for the moment I'd rather continue visiting it as a moderately prosperous tourist than living in it as an unemployed or underemployed resident.
THat's not to say that I won't be affected by the downturn in the U.S. economy and the almost criminally negligent mishandling of it by the Bush gang. There is no "away" anymore. But it's better than living in a country on the downswing where politicians and the media are still pretending that everything is going to be OK.
Most Americans (though not the ones on this site) are in for a rude and sudden awakening shortly after the closing ceremonies at the Beijing Olympics.
Oh what will you give me
Say the sad bells of Rhymney
Is there hope for the future
Cry the brown bells of Merthyr
Who made the mine owner
Say the black bells of Rhondda
And who robbed the miner
Cry the grim bells of Blaina
They will plunder willy-nilly
Cry the bells of Caerphilly
They have fangs, they have teeth
Say the loud bells of Neathe
Even God is uneasy
Say the moist bells of Swansea
They will plunder willy-nilly
Say the bells of Caerphilly
Put the vandals in court
Say the bells of Newport
All would be well if, if, if
Cry the green bells of Cardiff
Why so worried, sisters, why
Sang the silver bells of Wye
And what will you give me
Say the sad bells of Rhymney
i learned this from pete seeger. . .
Here comes candle to light you to bed;
Here comes a chopper to chop off your head!
I learned this from George Orwell.
TG said, "the almost criminally negligent mishandling ."
I say, "Almost???!!"
I have no consumer debt, but I'm considering taking on a rather large amount of it for a geothermal heating system, since my current system is oil and there is no gas coming into the house. Natural gas is also petroleum-based and is not likely to be a lower-cost alternative much longer. I hate the idea of debt, but this seems like it might be a good reason to incur it.
"We need a new deal, we need a leader that can bring us out of the wilderness into a bright future."
Agreed, but it's too late for this cycle. Four years ago, that kind of leadship might have gotten us out of Iraq , out of debt, and out of our addiction to Middle Eastern oil to the point where maybe we'd be sliding in under the wire as things go bad. Instead, we've seen just the opposite trend, plus a lot of wastefulness, wishful thinking, and welfare for corporate bums.
I support Obama, but we should be under no illusions about what he'd face as President. At best, he'll be fighting a holding action at the front while simultaneously cleaning up the rear. If he's successful, we might find the overgrown beginnings of that path to a better future during his second term. But for now, the wise move is to hunker down or move out.
And if Hillary or St. McCain get in, get ready to relive the full-blown stagflation of the early '70s ("Now With More Surveillance!")
OTB..it dosn't matter who gets in america is goign to change dramaticly over the next decade. as a nation we can work to makeign that transition smoothly, or we can try and hold it back...
this is the same point that we where in durign the thirties, right now we have teh choice, the path to the new deal part two, or the path to armed rebeillion ( we where damm close in the thirties to a new revolution).
If you have a credit union, you might consider checking out their foreign exchange services. Mine will sell me foreign currency at optimal rates and with no fees incurred.
I'll now be buying Euros and Swiss francs with every paycheck. If nothing falls apart, I have my money for a European or Swiss trip in 2009 or 2010. And if they do, I've got some currency that might have a better rep than the USD in my own county or nearby Canada.
My two bits...
Well, I figure I'm as good as dead in the gutter at this point. I got no post-economy skills, I live in an apartment, so no land where I can grow food, don't have enough money to stock up on six months of food (that alone would put most people in this country into serious, serious debt), don't have enough dough to buy guns (How does anyone afford those? Do most people just make way, way, way more than I do?), and I'm in a part of the country that tends to be at the butt-end of the distribution chains.
I guess I'll go out this weekend and buy a locking gas cap, but that's about the extent of planning that I'm able to do.
Nice knowin' y'all, someone buy me a tombstone when this is all over...
In the thirties, the people were about equally as well armed as the government goons. That is not the case today.
In the thirties, the press and the economic elite wanted a "strong leader". Their preferences were for an American Mussolini, an American Stalin or an American Hitler in about that order.
Our current president's grandfather and others of his class attempted to organize a national socialist uprising against Rooseveldt immediately after his election. They attempted to recruit retired Marine corps general and two time MOH winner Smedley Butler to lead the uprising.
The attempts came to naught. The bonus army marches on Washington had helped undo the Hoover administration, as had the poorly handled mississippi floods.
Some things to remember, when the economy gets bad enough, the government confiscates those things that allow one to maintain one's independence. Gold is always first to be confiscated, weapons second.
Recently I am seeing in blogs and other places the demand for a "strong leader" to take the reins of the economy in his hands and lead the US back to its naif and innocent ways.
It ain't going to happen. The only place a strong leader takes you is to slavery. There are plenty of Petraeus, and Clarks, and Bushes and Clintons telling us to put your future into their hands. Might I suggest that you ignore them, laugh at them, turn your back on them and instead put your future into your own hands. It really does not matter if you elect the cool dude, the harridan, or the old fart, the economy is not in their control. The American economy is subject to the whims and objectives of the leaders of China, Russia, Japan, India and the oil producing part of the Islamic world. They are the creditors, they hold the debts, they will want to be repaid. Consider the options:
1) Don't pay, we got the nukes, they can go pound sand. This will work wonderfully for about three weeks, then the imports will stop. The USA is a consumer/government spending society not a production society. Without imports you get no tomatoes and no oil, no motherboards and no machine tools. Picture walmart with nothing to buy but Brittney CD's, no chinese socks, no indian shirts, no chinese nuts bolts screws washers, no canadian plywood.
2) Let all those dollars come home and buy up the forests, the farms, the few remaining productive facilities, the few worthwhile and valuable people. The railroads will be available and bought, the expressways and turnpikes will be available for sale.
3) Try to convince the holders of US treasury instruments ( declining at 6% a year in real value ) and the holders of $ in Forex and Sovereign Wealth Funds that it is in their interest to simultaneously import american inflation ( 9% this year ) and dollar destruction ( 6% ).
Son, such a deal I have for you, just hold this nominal paper and watch it evaporate at a compound 15% a year and in return I will give you more of this paper and you give me oil and motherboards and clothes and food.
What I have learned and seen from my grandparents and parents (full of stories from the Depression) is that hoarding doesn't make life better.
Preparation does, yes. But - the real thriving comes from your relationships. Do you know your neighbors? Have you sat down together at a potluck supper and talked about sharing skills? Repairs, gardening & canning, barter, sewing, tutoring, entertainment, transportation, simple health care?
I think people who try to be a solitary fortress these days are in for the hardest time. Try being a village instead.
Scott find the local farm coop, it exists that would be a good start..and don't let the chicken littles get you down.
CK rebillions don't come form the top (thats why the revolt agenist FDR faild) they come from the middle gettign fed up with the top. we are at that tipping point.
Rebellions come from wherever the most pissed off are.
The American revolution came from the top of the top. The lawyers and landowners, the smugglers and merchants formed it, fed it and led it.
The French revolution came from the anti clerics first and the peasants later.
The Russian revolution came from a few intellectuals and a lot of military drudges.
The peasants rarely run successful revolutions, they are too hungry.
Real revolution comes as you disengage from the systems, Simon Jester the systems you can't disengage from, real revolution starts with laughing at the pompousities of the strutters and the whiners. Laughter is the first weapon. Seditious laughter. The knives and fire come later.
If revolutions come from the middle, it is obvious why this administration has done its damndest to destroy the middle class, what is not understandable is the middle class agreeing to its own destruction, conniving in its own immolation.
CK to much of the middle calss bought into the great lie...taht they where special, and soemhow liked by those above tehm..that they would be givin a lift up while teh rest of us where left behind....eyes are startign to open.
What I have learned and seen from my grandparents and parents (full of stories from the Depression) is that hoarding doesn't make life better.
Amen to that. From what I've seen, it's not the walls you build that will save your life, it's the bridges.
I am so excited to see this.
The adventures of carnage is really avoiding the depression.
The central problem is handled in new way.
I realize the information in this article.
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mac
Dual Diagnosis
Dual Diagnosis
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