It’s Not The Same As ‘29’ – It’s Worse

It’s Not The Same As ‘29’ – Because It’s Worse

It’s Not The Same As ‘29’: Charles Hugh Smith’s “Of Two Minds” blog (oftwominds.com) on 6/26/09 produced a piece (excellent as usual) entitled, “Domino Devolutions: Credit, Spending, Taxes, Jobs”. In it, he included a some comments from James Howard Kunstler (author and essayist) on the Great Depression and how it’s different today. Here are those comments:

“Many commentators refer back to the Great Depression as a historical guide or template to our present situation. But our current predicaments are far deeper, as commentators such as James Howard Kunstler have shown. (“The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-first Century”) To mention a few of Kunstler’s observations:

• In 1929, the U.S. was the equivalent of Saudi Arabia today: the world’s largest oil producer. Now we have to import fossil fuels on a gigantic basis.
• In 1929, the U.S. had a fully functioning rail system for passenger transportation. This has shrunk to a shadow of its former capacity.
• As extreme as debt loads were in 1929, our current level of indebtedness (as measured by GDP) is far higher for all sectors: government, business and households.
• In 1929, millions of jobless citizens could return to the family farm or a family home in the countryside or small town. Now that U.S. is heavily urbanized, this “Plan B” is no longer available for most unemployed.
• In 1929, the U.S. was a major manufacturing/exporting power which actually ran trade surpluses for much of the previous 50 years.
• In 1929, the government sector extracted a much smaller percentage of national income than it does today.”

Note: From conversations with family and others that lived through the Great Depression, the fabric of family was much stronger then also.

Because It’s Worse: From LATOC (lifeaftertheoilcrash.net) on 6/26/09 we get this Jeff Nielson’s Instablog take on unemployment via this piece, “U.S. “mass lay-offs” at Record high”. Here are some of Mr. Nielson’s comments and observations:

• “Large scale lay-offs in the U.S. (defined as lay-offs of 50 or greater at one time) hit the highest level since this statistic was created in 1995, …”
• “Jobs are being lost in the U.S. at least as fast as during the Great Depression — if not faster.”
• “Combine these employment numbers with falling wages, no access to (further) credit, and a belated desire by Americans to save a little money, and this is nothing short of catastrophic for U.S. retailers.”
• “The moment that the debt-dependent U.S. is cut off of foreign credit, then the choice is either “Zimbabwe” or immediate, national default.”
• “U.S. housing prices are falling more than three times as fast as during the worst of the Great Depression, while debt levels are at least ten times greater (for both individuals and governments).”
• “The United States currently has more than $57 Trillion in public and private debt …more than every country in the world combined.”
• “There is no U.S. “economic recovery”. There will be no U.S. “economic recovery … , and protect yourself from what lies ahead.”

Stay aware of what’s going on here in the U.S. and abroad. Be aware and prepare, prepare. Until next time,  keep your eyes on the horizon as the weather’s changing fast.