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My dad grew up on a farm with ten brothers and sisters. They never lacked food or shelter but it was a hard life he escaped at fifteen with his mothers permission to go into the navy.
My mom's dad was a bigwig in Hollywood who abandoned the family when my mom was 15 and my aunt 11. They didn't live like the rich before and did own the house, but my grandmother raised them with what she made at the grocery store doing food demos. But she *always* had food available for the migrant workers who came by, as well as clothing. She gave what she could.
My mom grew up seeing the value of have a good larder of food and passed that onto me, which paid off when my own life took a tumble for a few years. A few other lessons in life and what really matters and I do understand how they lived.
My parents never bought anything that they couldn't afford and made sure that they could pay the morgage before they signed it. They never had a credit card. They did not spend all the money my dad eventually put in savings for stuff, but for that rainy day (which came). They would never have accumulated the huge debts the current generation has, nor feel too sorry for them.
And they passed this on to me. I have enough food for that rainy day. I have a kitty where there is a fall back in case of big expenses. I only buy things that I need unless its the monthly reward, and even then it has to be something I really really want. In this recession/or worse I'll do fine, but then thanks to my grandmother and parents I was taught values that much of the younger generation never knew.
My nephew bought a 500k house on his and his wifes salery. He isn't working and they probably won't be able to keep it despite advise not to from family. My son grew up in a family where we didn't have a lot of extra and it stuck. It depends on how the children of the ww2 generation were raised.
I'll bet that those who find themselves so strapped they have to pick what bill to pay or have no place to live will end up relearning those lessons.
One thing is for sure. Every one of us here will be able to say they survived the second great depression, one that will prove to be worse then the first. If this one ever ends that is. It will.....in 5-8 years perhaps.
My parents and my wifes parents. I remember my mother -in-law talking about her being older than her sister. She got fruit for Christmas and they didn't have any money to get her baby sister anything. Her whole family use to make brooms by hand to sale. She said they were poor but she never realized it. I see ih in her as she is very frigle ands waste nothing and really know what is a good price for food times.
Was just talking with some folks in East Dallas last month -- as in Southeast Dallas. It is now deep 'hood, but was the areas of their family farm, he was born in the 1920's there, and both his and the Mrs. parents had come over from Czechoslovakia.
He had went to on to "win" WW2 -- pilot in the air war over Japan. But he is very humble -- his son had told me that part some years ago.
He was saying the 1930's depression seemed to come on just like this one. All of a sudden they looked up and it was (t)here.
One thing is for sure. Every one of us here will be able to say they survived the second great depression, one that will prove to be worse then the first. If this one ever ends that is. It will.....in 5-8 years perhaps.
Have not survived it -- yet.
Truly could get ugly depending on how food and other critical supplies turn out.
If this one goes shooting -- duck.
There are old folks and bold folks, but very few old, bold folks.
My grandmother grew up as a black child and teenager in Birmingham, Alabama during the depression. She talked about going to the store to buy bread and having other kids fight her for it. She talked about hording food in secret places, just in case. She considered herself very lucky because her father was a doctor. After she grew up, she treated money as if she had very little. Because of her, my first credit card was at the age of 32, so that we had enough money to move cross country. I haven't used it since. If you couldn't afford to pay in cash, you couldn't afford it. Most of what I buy is on sale, and if I don't really need it, I don't get it. I lived with her and my mother until I went away to college at 18, so she had a HUGE influence on my life and habits.
Folks I hate to keep bringing this up, but the whole notion of their being a fall-off in productivity of 10% given the breadth of our economy, the size of the workforce, the ease with which the government and quasi-governmental bodies are increasing spending and liquidity all point to something that is just so close to impossible as to be up there with asteroids crashing into the planet...
When you take a look at the size of the US force, and the educational attainment there is just no way that there is much comparison to the sooty faced, vegetable patch thieving picture of what existing in the 20's-30's... http://www.census.gov/prod/2004pubs/p20-550.pdf
I do not mean to minimize the current situation. The credit markets clearly have some HUGE problems. It will take some time to re-invigorate the economy, and it could very well take a LONG time before there is real momentum in many sectors, but the reality is that MANY papers have been written about HOW WRONG Hoover and even Roosevelt were in their approach to dealing with the problems they had and THOSE MISTAKES WILL NOT BE MADE AGAIN.
That is not to say that there won't be some missteps on the path to restoring health to the economy this time. The odds of those mistakes being quite small and relatively well contained are HIGH. The whole world is smarted and wiser. We do learn from mistakes. We do not eliminate mistakes, but we tend to make them SMALLER.
Think of it this way: There is no doubt that the Vietnam conflict was a bloody, devastating situation that plunged that country into a terrible state. The wreck of Vietnam, however, was very different than the end result of Korean War and the terrible mistake that created North Korea, which is turn was no where near the fiasco of diplomacy that resulted in the Soviet Union coming out of WWII or even the horror of Third Reich being born of the failure of WWI...
Each of the successive Wars was more contained and better understood than the one before. There is every reason to believe that similar lesson will be applied to addressing the crisis that is weighing on the global economy.
Bad debts will be charged off, assets will be more fairly valued and LIFE WILL GO ON, picking up at pretty much the SAME PLACE that it left off, not scurrying back to some quill-pen and whale-oil-lamp sepia toned tin-type from a century ago.
Smart companies will emerge stronger and MORE SKEPTICAL than they were before, and the playing field can be better understood BY ALL, so long as PEOPLE do not cower in their fear-filled caves and they instead demand MORE transparency, LESS government manipulation, and most of all -- HARSHER punishment for RULE BREAKERS. If bad people feel they can get away with "putting one past" the lenders and have NO CONSEQUENCES you can damned well believe they will do so again and again UNTIL the CONSEQUENCES make such actions wholly unattractive.
My parents, grandparents, aunts and uncles all lived through the depression. My mom, born in 1925, was the youngest of 8 kids and her parents were tenant farmers. They were dirt poor before the depression. They all picked cotton except for my mom, who was too little. They ended up moving to town when she was a little girl and moving in with an aunt who ran a boarding house. They got fruit and nuts for Christmas and she said they would bury the nuts for later. She and my father were both very frugal and I learned that from them.
My father's mother (born in 1897) was a single mother and worked as the telephone operator in her small town, taking care of my father and her mother. Eventually her sister, sister's husband and their 5 kids moved in with them and my grandmother was the only wage earner.
I grew up hearing these stories and have taken them to heart. I can't believe some of the things I read on the personal finance and mortgage forums about what people do with their money. My husband and I have made paying off our house a priority and if we both lose our jobs tomorrow we'll still have a roof over our heads.
Thank You Chet Everett - I'm giving you a rep point. My husband and I are in disbelief with regards to all the hype surrounded this so-called recession we're supposed to be in. Meanwhile - Build-a-bear in the mall is packed, people are still eating out at fancy restaurants, teenagers are walking around with iphones and ieverythingelse, middle schoolers are wearing the latest name-brand whatevers (I am so sick of Miley Cyrus and I don't even had a daughter!) and the road is still packed with overpriced gas-guzzling yuppie cars. The $250+ Wii is flying off the shelves, families are spending more than some people's rent on home entertainment systems and giant TV's... Ladies are still getting fake boobs, facial treatments, fake hair, fake nails, fake tans... wearing expensive designer clothing and toting around expensive and ugly designer purses... Men are still golfing and lunching and enjoying the ammenities at their local gym's and country clubs...
People are shopping. I don't care what the news stories say... but go into the bookstores, clothing stores, the mall... places are crowded and the places look like hurricanes hit them.
The "cushion" that many people have in regards to not understanding how big a hit they've taken is the reality of how illiquid homes are -- you can't just go to a pawn-shop and sell off part of your house. My gut tells me that the hassle factor of HELOCs meant MOST people did not really use such funds to underwrite day-to-day needs. The DID use them for expensive home entertainment & luxuries, remodeling, college tuition, cars, credit card consolidation and other stuff that it is lot less visible.
Another part of the "invisibility" of the wealth destruction was 401k -- again rather illiquid as very few people who have such accounts do much more than stare in disbelief at the computer printed statement of how much erosion they've faced.
Right NOW the various credit card companies are RAPIDLY reeling in the outstanding, unused credit that MANY folks have. This is a SMART THING for the CC companies to do, but it is VERY LIKELY this will through a very cold wet blanket on the economy is about 60-90 days.
Hopefully the new administration AND the Fed liquidity injections will offset those things.
There DEFINITELY is a RECESSION though a relatively small percentage of people are feeling it BAD right now, I do believe the numbers of people in distress WILL increase, but I also have some confidence that spigots will open to keep pain from becoming too great on too many.
People with a grossly negative view of what COULD go wrong spread undue fear. These fears make it likely that ridiculous over reactions will be "demanded" from wrong headed government leaders...
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