The Change in Financial Attitude between the Great Depression and current Crisis

I wrote this in November of 2007 and feel it is still as pertinent today as then. I re-submit this as a reminder that what is currently happening economically is not new and the rumblings of the current disaster were heard a year ago.

I truly feel sorry for the majority of my fellow Americans. The unfortunate reality of what is transpiring, even as write this post, is either not seen or not believed by all but a few in this country. People don’t want to see, hear or talk about what is going on economically. They close their eyes to what they do not want to see, stop their ears from what they don’t want to hear and talk about trivial matters to avoid having to speak about reality. As many of you know who read these posts; I am no fan of entertainment for many reasons, not the least of which is that it is fantasy.

It is truly incredible how many people spend the majority of their lives living in a world that does not exist. Whether science fiction, romance novels, sports or computer role playing games; anyone who lives in these worlds is not living in the real world. It is perfectly fine for children to live in their “make believe” world, but it is NOT for adults. Real is real and make believe is imaginary. Never should the two be confused with each other.

I fear that what most people think is real is nothing but a mirage. We have all seen the puddles on the highway while driving, only to watch them disappear when we get near them. A mirage looks like the real thing. Many times a mirage is simply something a person WANTS to see and thus sees it. A man trudging through the desert wants to see an oasis. Lo and behold there one sits on the horizon. He musters all his strength to reach his promised land only he never gets there. He could keep walking forever and never find that oasis, for never really existed except in his eyes.

People who live chasing mirages never find them. They are as elusive as the pot of gold at the end of the rainbow. Haven’t we all, at some point in our lives, driven in search of that pot of gold? It is never there because it does not exist. Chasing fantasies has become the great American pastime. The indelible lines which should be separating reality from fantasy have been blurred to the point most people cannot seem to tell the difference.

This country has been blessed with REAL times of prosperity. This country has also been saddled with REAL recessions and depressions. Unfortunately, those people who lived through THE depression are becoming more and more extinct. Anyone old enough to really remember the suffering that took place in the 1930’s is 80 years old or more. Anyone who was an adult during the Great Depression has to be over 90 years old. Only someone pushing 100 would have clear memories of the Stock Market crash of 1929.

The Baby Boomers parents all grew up during some part of the Great Depression. Whether they were directly impacted by the events that took place in the 1930’s or not, they all heard stories and knew people whose lives were destroyed by some aspect of the Depression era. This is why Baby Boomer’s parents all seemed to preach the same gospel of thrift, stewardship and borderline frugality. Lessons learned through enduring difficult times tend to stick with you.

Following World War II, the United States enjoyed a remarkable stretch of prosperity. This stretch of time roughly parallels the stretch of time our parents lived during the Great Depression. Thus, whereas those growing up in the depression era learned to live on less, endure hardships, take care of each other and be thankful for whatever they had; those growing up in the Baby Boom generation learned to live on credit, complain about everything, think only of themselves and feel like they never have enough.

Growing up in the 1950’s and 60’s bears no resemblance to growing up in the 1930’s and 40’s. In fact, they pretty much represent both sides of the coin. Although most Baby Boomers didn’t grow up in great affluence, most did not grow up in abject poverty either. In fact, the later in the Baby Boom generation one goes, the more prosperity people enjoyed from birth. Someone born in 1945 certainly didn’t have all the conveniences a person born in 1963 could enjoy. Although both are considered Baby Boomers, the older ones still had to endure some hardships compared to the younger ones.

I have a sister born in 1940. She is a true hybrid when it comes to economic thought and habit. She remembers vividly the tough times after the big war and the good times that began to unfold by the mid 1950’s. I have a brother born in 1945. He is a charter member of the first Baby Boom class. His memories start at the same time the better times started. He was too young to remember the hard times, but can vividly recall the transition from having little to having enough.

I was born in 1953. By the time I have any memories, the good times were in full swing. I was able to enjoy items that only the privileged were able to afford when either my sister or brother were growing up. I was able to grow up in a “normal” home in a fairly large city with nice schools. My sister grew up being shuttled from one state to another due to the war and its aftermath. My sister never did get to live in the dream house my parents finally purchased in 1958, she went away to college.

My brother barely lived in the home before getting married and finding his own place. I got to spend 13 years in one room in one house. Most people today would consider that torture. I look back and consider it stability and security. By the time I moved away in 1971 and left my parents an empty house, but to them a very comfortable, yet humble abode. They were able to enjoy the fruits of their labors and live in that home for another 28 years.

Instead of learning from our parents, the Baby Boom generation has for the most part decided to discard all their advice and “go for it all” while they can. The generation that grew up in the 1970’s and 1980’s knows nothing of the hardships their grandparents went through for their parents made sure they would never have to endure such things. They begged, borrowed and many times stole to get the very best for their children. There was no way their children would have to live in the “poverty” they lived through. This “spoiled” generation knows only prosperity and hasn’t a clue what it means to have to do without.

Now we have the current generation growing up in the roaring 90’s crazy 00’s. This generation is now so far removed from their ancient ancestors who endured the Great Depression; they know absolutely nothing about it, World War II, or even Viet Nam. All the current generation knows about the 70’s is it had cool music and weird television shows. They were born in the decade of non-stop prosperity and their parents have vowed to make sure they have all the things they were deprived of in their “Spartan” growing up years.

Because no one cares about what happened 80 years ago, history is bound to repeat itself. The similarities between this country in the late 1920’s and the present are eerily similar. In 1928, President Hoover said; “We in America are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing from among us.” A little more than a year after he said this, the United States Stock Market crashed and a worldwide depression lingered for almost 15 years.

During the Great Depression some industries made a profit. If Americans couldn’t work, they could at least go for a drive, have a cigarette or watch a movie. Sales of oil, gas, cigarettes and movie tickets all skyrocketed during the depression. People were looking for an escape. Sounds pretty similar to what goes on today if you ask me.

I pity the fool who wastes his life chasing fantasies. I pray for the fool who ignorantly goes his merry way oblivious to the doom awaiting him. I abhor the fool who though arrogance and pride, refuses to acknowledge the obvious and stubbornly continues on the path that leads only to oblivion.

Kyle and Economic Crash averted this time, but the threats are still with us

I will say this for not only the economic sector of the United States, but also the hurricane; I am beginning to believe this country is like the cat with nine lives. Once again, what could have been with Kyle will not be as bad as thought due to it staying east. Maine will certainly have a wet and windy day, but Cape Cod and nearby areas were spared—this time.

With each “near miss”, whether New England, North Carolina, Florida or New Orleans; there builds a mistaken assumption that the “really bad one” will ever hit. This is exactly what led to the whole Katrina debacle and perhaps the Ike disaster in Galveston. When it comes to nature, one must respect that as humans, we do not control it.

If a few meteorological details would have been slightly different, the two storms (Kyle and the unnamed storm) which flirted with the country the past few days could have resulted in a much worse scenario. The headlines would be quite different today if a category 1 hurricane had ripped into Wilmington, North Carolina on Friday and a category 2 hurricane tore across Long Island last night. Just as most people do not have any idea how close we came to total economic meltdown this week, so they don’t know how close we came to two hurricanes hitting the coast within two days of each other.

Congressional action prevented the economic hurricane from crushing the United States economy. Atmospheric changes in winds and pressure prevented the two hurricanes from buffeting the coastline. The economic mess is still there and after the initial hoopla over the accord reached by Congress and the White House, the underlying problems will result in another crisis down the road. Weather conditions still favor the development of tropical systems over the next few weeks.

The moral to the story is simply that we must not become complacent either in regards to the financial mess or the potential for future storms. Perhaps there is cause for rejoicing that the world’s financial markets will not crash tomorrow, but there is no reason to sit back and think “all is well” either. There is good reason to rejoice in that Kyle snubbed Martha and her vineyard and decided to check out the sights in Nova Scotia. But, Laura is bound to pop up somewhere soon and where she goes, at the moment nobody knows.

Perhaps, if we are still around to talk about it, down the road we can look back on the last weekend of September of 2008 as NOT the weekend of devastating economic storms and double hurricanes; but rather as the weekend we were temporarily spared, as a country, from the pain and suffering of three storms hitting at the same time. However great the rejoicing is today, I pray it does not lend itself to apathy in the future.

URGENT: FOR IMMEDIATE RELEASE–UNITED STATES TREASURY HAS SUCCEEDED IN GROWING MONEY TREE

*******************URGENT: FOR IMMEDIATE RELEASE****************

UNITED STATES TREASURY HAS SUCCEEDED IN GROWING THEIR FIRST MONEY TREE

Yes, it is true folks; The United States Treasury Department has finally succeeded in growing their first money. Deep in a top secret wing of the Department’s headquarters, top economists working with scientists have perfected the planting, watering and growing of the panacea to all that ails this country. Word out of Sweden is that those involved with the research will surely win the Nobel Prize next year.

Background:

For many years, our government have been searching for the evasive secret to growing the money tree which would solve their problems. Various attempts were made in the past to grow such a tree, but they were met with frustration as they failed to ever produce one dollar. Scientists and economists in Washington looked with envy on many other countries in the world and their successful money tree ventures. Word has it that many of the top people working on this project took a trip to Zimbabwe last winter to learn the secret of the perpetual money tree that country developed.

The Need for the Tree

There is no questioning why there needs to be a money tree in Washington. There is simply no other way for the government to keep paying billions and billions of dollars for everything under the sun. In order to keep everyone happy and prosperous, the need for developing the money tree was crucial. Due to the sub-prime crisis, the wars oversees and the financial sector’s demise; an ultimatum was given to the researchers to get the tree grown “or else”.

Success

Last week, the first few branches emerged on the money tree when the government agreed to “officially” take over Fannie May and Freddie Mac. Amazingly, at the same time the announcement was made regarding this takeover; scientists poured some magic liquid on the soil and out popped the money tree, complete with branches full of money! The elation in the room was intense and the smiles on the faces of those present lit up the room.

Final Success

Today, in an unexpected development; the government announced it was going to pay 85 billion dollars to rescue AIG from collapse. In return, the government will take over 80% of the company. Amazingly, at the very moment this was announced, the money tree grew ten feet and sprouted numerous new branches loaded with money. Now there were no more smiles, there was clapping and yelling and hooting and hollering. Finally, the money tree was flourishing.

What this means

Now that the money tree is growing, there should be no problem with the government bailing out and taking over any and all floundering businesses. This is great news for all the companies teetering on bankruptcy. Rumor has it that General Motors, Ford and Chrysler are scheduled to meet with the Treasury Department soon to see how much the money tree has for each of them. Many of the airline carriers are rumored to making reservations to see the money tree next.

There is now discussions under way to send out new “economic stimulus checks”. Instead of there only being a few thousand dollars, the next batch will be for a minimum of $20,000. Every taxpayer in the country would qualify as long as they paid at least $20,000 in taxes this year. For anyone who paid less, they would lose all rights to the money tree.

Conclusion

Now that the money tree is alive and growing, there should be no problem for every American to have all the money they need or want, compliments of the Treasury Department. If they are behind on their mortgage payments; no problem, just sign your house over to the government and you have 5 seconds to grab as much money as you can off the money tree. For those having troubles paying all their bills each month; there will be “money tree debit cards” issued which allow each person to charge all they want on credit cards and home equity lines and then pay it all off using the “money tree debit card”.

There are some who oppose the money tree, but they are dismissed as “uninformed”, “out of touch” or just plain crazy. The vast majority of people are overjoyed to have personal access to the money tree and see their government have unlimited access also. It appears everyone is happy with the new money tree for it allows everyone to get whatever they want, whenever they want it and never have to pay anything to get it. What a wonderful country we now live in!! No wonder everyone wants to move here. America, land of the free money and home of the fools.