Bernanke: economic woes nothing like Depression | Reuters
The current economic slowdown is nothing like the Great Depression of the 1930s, in part because the U.S. Federal Reserve is far more proactive, Chairman Ben Bernanke said on Thursday.
Bernanke, whose academic studies have focused on the Great Depression, said during that era the central bank allowed banks to fail, prices to fall and the money supply to contract, which contributed to the protracted slump.
“We now know the lessons from that,” Bernanke told the World Affairs Council. “We are certainly going to make sure that the financial system remains in good functioning order.”
My husband and I were talking about this, and noting that during the depression, three generations typically already lived together in one home, and usually only one or two of the men were working outside the home, or everyone worked the farm.
Today, we have typically three houses between three generations, and both husbands and wives working. Or we did. The collapse into one house has started — my husband’s parents already live with his sister, for health reasons and economic reasons. My good friend in L.A. is about to be forced to move back in with family if he cannot find a job soon.
In my own family, by the time I was 22 I had graduated college and had my own apartment, and worked all the way through college as well. Now, My 22 year old son is in community college, as is my 18 year old son, and only the 18 year old works, at a job with a friend of mine, at minimum wage. It is difficult for them to find jobs that mesh well with their school schedules, which are limited by class availability. Plus, there are seniors working minimum wage jobs to have health benefits, which limits job availability for the youngest in the work force. Right now we have the lowest level of teen employment since — you guessed it, the great depression.
As families collapse back into a single home, it won’t be like the great depression, but it certainly won’t be like the good times of the 90s, either. Most families now are making slightly less in terms of real dollars than they were in the 70s — and that’s with both parents working.
When I was 26, my husband and I bought our home, our “starter” home, which we still live in. Today, most of our 20 something friends and son’s friends can’t afford a home, and many of our 30 something friends still rent rather than own a home. We chose to stay in our home as we got older, since it is way more affordable than buying a larger home. Today, the Senate is choosing to bail out homeowners who bought more house than they could afford, and the home builders who built too many homes with a large tax break. And we wonder why people haven’t been more fiscally responsible, after years of cheap interest rates and “teaser” rate loans. We watch the big banks and CEOs get their bailouts, and wonder if we were stupid to actually only buy what we could afford.
So Ben, you might not think things are so bad, and comparatively, they are not — my parents’ families both had kids farmed out during the summers during the depression, quite literally, to work the farms and so they would be fed. We aren’t there and will probably not get to that point. But the economic costs of the mistakes of the last seven years are being felt by most Americans. I only hope this time they are smart enough not to be taken in by those who serve the rich and well off, and elect leaders who will truly support the well being of all Americans.
You think you are being responsible in your actions Ben, but you’re not. You’re just taking us further down the rabbit hole of the lack of personal, corporate and governmental responsibility. We need to end this socialism for the rich, and get back to taking care of ALL Americans.
We can’t afford to do less.
One Response
The proposed and likely “bailouts” are just another event on a slide down a slippery slope. I am not enough of a historian to know when the slide started. A major event on it was when during the S&L fiasco the government made sure every depositor came out whole, instead of just paying the $100,000 they were insured for per account. Zillions of unpromised dollars wasted. Of course, most of the folks thus bailed out were, and I know this is shocking, the more well-to-do sorts of people who could actually have an account in an S&L over $100,000.
The government thinks mortgaging the future to try to make a padded cell out of everyone’s economic world right now is the way to go.