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The Masked Tulip

Are We Sinking Into A New Great Depression?

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http://abcnews.go.com/Business/Economy/sto...1935&page=1

Inland Bandon, though it seems largely unchanged -- a few businesses have gone bust with none to replace them -- has suffered a burst of foreclosures. Meanwhile, out on Beach Loop, the for-sale signs -- always a summer phenomenon by owners looking to see if they can find a rich sucker -- are more plentiful than ever. And this is particularly true in the several new housing developments, which now stand forlorn, nearly empty and, if local rumors are true, many of them financially underwater.

I still make my morning drive down to Bandon Coffee -- but now the news on the radio is not the status of the local salmon run, but the fact that unemployment in the region has now reached 15 percent. I'm reminded that the during the Great Depression, that number reached 25 percent -- a figure I used to find unimaginable, and an experience so devastating that my 88 year-old Dust Bowl mother still hoards string and rubber bands and rinses out plastic bags even as she sits in her seven-figure, modernist Eichler home.

Fifteen percent unemployment and the Oregon legislature is preparing to raise taxes. As in California, the people have voted down tax increases, but the legislators refuse to believe them. Instead, they threaten to cut vital services as a sort of punishment for false consciousness by voters, even as they race to preserve as many state government jobs and perquisites as possible.

Fifteen percent unemployment. What does that look like? Well, we all may know soon enough. But what is most disturbing about it is that it doesn't look that much different. A few more beggars. A few less new cars on the highway. Fewer people in the stores. More vacancies at the local motels.

My Mother did this - hoarded elastic bands, used envelopes and other such things. Most men and women of her generation did the same. Those still alive still do. It is simply because they went through the depression.

For several weeks now, I've had a disquieting feeling about the economy. And, I suspect, consciously or unconsciously, so have many Americans. I remember my parents telling me that their lives barely registered the stock market crash of 1929. Rather, the Depression hit full-force in 1931 -- and reached its full horror in 1933.

None of that will surprise anyone who took eighth-grade U.S. history. But what few people seem to know these days is that after the economy seemed to turn upward in 1934, it crashed again two years later. In fact, in many lives, that's when the real damage was done. That's when my great-grandfather lost the farm in Oklahoma -- the one he'd home-steaded 40 years before in the Land Rush. My father's family in Oregon went on relief, and my teenaged dad fed himself as a field worker by picking string beans (he never ate them again).

Look at those charts again. Nothing in them suggests that the stimulus of the past eight months has accomplished much of anything. On the contrary, almost every chart seems to suggest that we are making exactly the same mistakes of 1929-1939. It is almost as if it is programmed into human nature, and we can't help ourselves.

Every sane adult knows what it takes to pull out of an economic deadfall: You tighten budgets, cut inessentials, pay as you go and restructure your debt -- and hang on to your current job for dear life. And we also understand that, when it comes to a national economic crash, the same principles apply -- with the addition that you stimulate the economy briefly with increased spending, you cut taxes and loosen onerous regulations, maintain free trade because the alternative is so much worse, and you support innovation and new company creation in hopes that a new cohort of hot companies will help pull you out.

What you don't do is nationalize industries under emergency rule and make them less efficient, you don't conduct social experiments with large segments of the economy, you don't increase expensive regulations on industry, you don't pile on massive amounts of debt that will flatten any economic turnaround when it finally comes and that will take a generation or more to pay off, you don't turn against entrepreneurs as they are your last best hope, and you don't increase taxes on the most productive members of your economy.

Edited by The Masked Tulip

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Thank you for this. It is a great find.

It amazes me how people think that we are out of the woods alreay without any real damage. Like the author of the article, I execpt that we are still only at the beginning of the adjustment process. Many more people are still going to get crushed by what is coming next.

The rich are going to get hurt much more on an absolute (obviously) and relative basis (possibly less obviously) than the less rich but it is going to be painful for everyone.

Being conservative in your approach over the next 3 to 5 years is the only way to minimize the damage from what is coming next. We can only hope to minimize as avoidance is impossible.

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We don't need to go as far as the US and the great depression to see what high unemployment will do. Spain is already at 18% IIRC... that's pretty close to great depression like figures already! :ph34r:

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Yes I think we are entering in to a great depression. It's human nature to think positively but I feel there is just too many issues that will bring our economies down. Those in the know and I mean bankers, are still not lending and holding every dollar they can for the rainy days to come. How the bulls can think that a turnaround is happening and the future is up, well I just don't know. I believe we are now heading for the second big dip, and boy will this be a ride to remember. I do not wish it, but I think it's coming no matter what.

We all know how we got here, far to easy credit, the action taken was QE believe it or not, loans have to be repaid, the bailiff is at out door.

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my perception of the uk is that the party was over but gordon put the stereo back on after he 'borrowed' some money from his senile gran to buy a couple of hundred packs of Party Four from the late night off licence for his already smashed guests, we're now at the point where the environmental health noise patrol and police receive the call to confiscate the lot

Edited by loginandtonic

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It's human nature to think positively

You'd never know it from this website, mind!

In a way I'm almost comforted by the post: if you can come through the Great Depression and (1) live to age 88 and (2) be scarred only to the extent of sensibly conserving stationery, perhaps we will all be OK in the end, after all.

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The US still had all it's natural resources after the Great Depression and very little debt. It's a completely different scenario today, but one that will leave an indelible impression on people.

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Guest UK Debt Slave

Oregon is actually one of the best states to be in.

Compared with California, it is in much better shape

No sales tax in Oregon AT ALL! No VAT! It is still one of the best states to live in, plenty of natural resources, low population, public services are actually pretty good........and above all.....the people are very laid back.

You could do worse

Even if things get bad, the UK will still be MUCH worse

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The US still had all it's natural resources after the Great Depression and very little debt. It's a completely different scenario today, but one that will leave an indelible impression on people.

The US did very well out of the two world wars where as Great Britain did not. The roaring 20's were in the US, not here, the 50's took the US to even greater heights of prosperity, not so for the UK. The UK introduced free health care (albeit it's not really free of course) but it's far different to the harsh US system. Bush introduced a 5 year max for claiming unemployment benefits, we house 16 year old single pregnant girls. We are worlds apart. Sadly I think we are on the losing team. The trouble is, the USA is the 16th most in debt per ca pita, the UK is second after Ireland. We are more fooked than the average man in the street knows.

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My Mother did this - hoarded elastic bands, used envelopes and other such things. Most men and women of her generation did the same. Those still alive still do. It is simply because they went through the depression.

I do this. I've a whole room full of used envelopes and every now and then I take them to work and give them to the post room to use for internal mail.

I horde string, elastic bands, plastic bags, cardboard, surgical gloves and cable ties too. My wife hordes jars. It would seem odd to have to go out and buy these when you need them. It would involve a 20 mile round trip for me.

I really don't see what is odd about this. What is there to gain from throwing these away?

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my perception of the uk is that the party was over but gordon put the stereo back on after he 'borrowed' some money from his senile gran to buy a couple of hundred packs of Party Four from the late night off licence for his already smashed guests, we're now at the point where the environmental health noise patrol and police receive the call to confiscate the lot

Post of the day ! I love the reference to party four .. can you still get that ?

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What you don't do is nationalize industries under emergency rule and make them less efficient, you don't conduct social experiments with large segments of the economy, you don't increase expensive regulations on industry, you don't pile on massive amounts of debt that will flatten any economic turnaround when it finally comes and that will take a generation or more to pay off, you don't turn against entrepreneurs as they are your last best hope, and you don't increase taxes on the most productive members of your economy.

We're definately fecked then.

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Post of the day ! I love the reference to party four .. can you still get that ?

thx, i thought so :)

i dont know, probably cant get Party Four any more, i brew my own anyway !

watneys_party_seven.gif

you dont see the govt printing a leaflet or taking a tv ad to explain how serious the debt is - so the average man/woman in the street thinks we've somehow evaded disaster rather than bought time to an election - if we have evaded a serious recession/depression then brown truly is a genius - but somehow i doubt it, qe and zirp are not magic, they are actually slow-acting poisons

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I do this. I've a whole room full of used envelopes and every now and then I take them to work and give them to the post room to use for internal mail.

I horde string, elastic bands, plastic bags, cardboard, surgical gloves and cable ties too. My wife hordes jars. It would seem odd to have to go out and buy these when you need them. It would involve a 20 mile round trip for me.

Quite: there's no point paying for envelopes or rubber bands when they come free with the post, and it's a boon to have a bit of salvaged string in your pocket just when you need it...

Like the mother in the article, I also wash out freezer bags. Why send them to landfill when they're still perfectly good?

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At the moment we are at the stage king canute was when he was shouting at the tide to retreat, even though it was lapping at his ankles.

This is how it is, world leaders still think they are holding back the economic waters...in reality they are kknee deep and getting deeper. It cant be held back forever, and the lifeguards have been laid off!

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Quite: there's no point paying for envelopes or rubber bands when they come free with the post, and it's a boon to have a bit of salvaged string in your pocket just when you need it...

Like the mother in the article, I also wash out freezer bags. Why send them to landfill when they're still perfectly good?

If the BBC want you to feature in a documentary about obsessive compulsive hoarders though it's probably gone too far. One day you're collecting elastic bands in a ball and the next you're carefully stepping around milk bottles full of wee.

Edited by Soon Not a Chain Retailer

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If the BBC want you to feature in a documentary about obsessive compulsive hoarders though it's probably gone too far. One day you're collecting elastic bands in a ball and the next you're carefully stepping around milk bottles full of wee.

It's gone far beyond that. I'm at the point where I'm recruiting other allotmenteers/gardeners into the wee-saving cult :lol:

(I got the idea off "Gardener's Question Time" on Radio 4, you can't get more mainstream/respectable than that ;) )

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I do this. I've a whole room full of used envelopes and every now and then I take them to work and give them to the post room to use for internal mail.

I horde string, elastic bands, plastic bags, cardboard, surgical gloves and cable ties too. My wife hordes jars. It would seem odd to have to go out and buy these when you need them. It would involve a 20 mile round trip for me.

I really don't see what is odd about this. What is there to gain from throwing these away?

I'm sure lots of us do (me included), though lack of space has disciplined me into not hoarding everything that might come in useful. The author of that article, in finding it remarkable, represents a different mindset: one that cannot imagine being short of anything, and in the UK may get bailed out while continuing to take the right to a profligate lifestyle for granted.

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Guest Parry
I do this. I've a whole room full of used envelopes and every now and then I take them to work and give them to the post room to use for internal mail.

I horde string, elastic bands, plastic bags, cardboard, surgical gloves and cable ties too. My wife hordes jars. It would seem odd to have to go out and buy these when you need them. It would involve a 20 mile round trip for me.

I really don't see what is odd about this. What is there to gain from throwing these away?

Ray, I'm finding myself a little disturbed by that.

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Ray, I'm finding myself a little disturbed by that.

Yeah I've been worrying about this post too because I forgot to mention that I collect bubblewrap too. You can pick up big sheets of the stuff free from the supermarket because the bananas are wrapped in it.

I've seen muppets buying it :lol::lol:

The surgical gloves are great for gardening/painting/working on the car/bikes and I always keep a pair in the car too. Only fear I have is that if the police pull me over they would use it as evidence I was on my way to commit a burglery.

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At the moment we are at the stage king canute was when he was shouting at the tide to retreat, even though it was lapping at his ankles.

This is how it is, world leaders still think they are holding back the economic waters...in reality they are kknee deep and getting deeper. It cant be held back forever, and the lifeguards have been laid off!

King C'Nut was making a simple demonstration to his acolytes: look, I am NOT all-powerful, I cannot resist the powers of nature. If only our current leaders had his wisdom.

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Yeah I've been worrying about this post too because I forgot to mention that I collect bubblewrap too. You can pick up big sheets of the stuff free from the supermarket because the bananas are wrapped in it.

I've seen muppets buying it :lol::lol:

The surgical gloves are great for gardening/painting/working on the car/bikes and I always keep a pair in the car too. Only fear I have is that if the police pull me over they would use it as evidence I was on my way to commit a burglery.

Bubble wrap makes a superb insulation under an air bed if you are camping, thought you should know that.

I collect loads of useless tips.

Edited by eightiesgirly

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I do this. I've a whole room full of used envelopes and every now and then I take them to work and give them to the post room to use for internal mail.

You have a whole room for envelopes? Hmm, they probably just chuck 'em and moan about the weirdo with the envelopes... hehe ;)

Quite: there's no point paying for envelopes or rubber bands when they come free with the post, and it's a boon to have a bit of salvaged string in your pocket just when you need it...

Totally admire the sentiments of the both of you tho and one I subscribe too - pity more dont. Although I'm not sure when I last needed a bit of string to get me by.

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Guest Parry
Yeah I've been worrying about this post too because I forgot to mention that I collect bubblewrap too. You can pick up big sheets of the stuff free from the supermarket because the bananas are wrapped in it.

I've seen muppets buying it :lol::lol:

The surgical gloves are great for gardening/painting/working on the car/bikes and I always keep a pair in the car too. Only fear I have is that if the police pull me over they would use it as evidence I was on my way to commit a burglery.

What do you use the zip ties for? :ph34r:

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