Is 2011 a reboot of 1929? History is not linear but cyclical; the past is prolog. History's wheel turns as the hardscrabble years of the Great Depression come around once again.
The parallels between the first Great Depression and the coming second Great Depression - the thens and nows - are disconcerting.
1) Then, the homeless: Hoovervilles, named after the president who was blamed for the Great Depression, sprang up across the nation. Cobbled from scraps of wood and cardboard called Hooverwood, thousands of these shack towns were built. An additional 4.3 million were given shelter by public and private agencies.
1) Now, the homeless: The epidemic of homelessness spreads. Some 3.5 million are homeless. Another 1.6 million live in public shelters, abandoned buildings, and makeshift housing - even under bridges. Last year there were almost 5 million foreclosures. The total number of foreclosures by year's end is predicted to reach 25 million swelling the ranks of the homeless.
2) Then, unemployment: In 1929, unemployment was 3 percent. Four years later it was 25 percent of the workforce or 13 million without income. Thousands of jobless men - the hobos, the tramps - rode the rails looking for work only to be met by rail-yard “bulls” forcing them to continue their fruitless journey.
As the depression deepened, penny restaurants, welfare cafeterias, and soup kitchens opened up across the nation. Rain or snow, “soup lines” formed before dawn.
2) Now, unemployment: The government counts it as 9.1 percent. But if the number of jobless who have exhausted their unemployment benefits are counted, the figure jumps to a more realistic 22.7 percent or 35 million. The soup lines of the thirties are gone but not the hungry; 46 million receive food stamps.
3) Then, the dust bowl: It raged across nine states. A tidal wave of bone-dry soil, “Black Blizzards” as they were called, reduced visibility to five feet. Dust turned day into night as wind swept up millions of tons of dusty topsoil from the Midwest to New York and Washington.
The drought, which coincided with the start of the First Great Depression, started in 1930 and lasted six years. It caused the greatest migration in American history as 2.5 million were forced to leave once fertile farmland that had become uninhabitable.
Entire families packed as much as the family model A Ford pickup could bare, abandoned their farms, and searched for work but were greeted with a succession of roadside billboards reading, “No Migrants Wanted.” A fortunate few found work as pickers for 10 cents an hour only to be paid half as much, but that was enough to keep hunger at bay for a few more days.
3) Now, the dust bowl: Fourteen states are suffering from a drought so severe that many compare it to the “dirty thirties” of the first Great Depression.
In Oklahoma, the drought began ten years ago. In Montana, where it started to dry up four years ago, many wheat farmers have given up farming. Colorado will not even have a wheat crop this year.
In Texas, the parched farmland bakes under a record-breaking heatwave exacerbating the drought. Never before has there been so little rain during the growing season of the second largest food-producing state. Wyoming and New Mexico are also hit hard.
Economic developments never go straight up or down but follow a trend line in fits and starts. The first Great Depression started on Black Tuesday, October 1929, the day the stock market crashed, but it took four years to reach bottom. Today's recession started in December 2007. Prospects of a recovery dimmed as the credit worthiness of the U.S. was downgraded by Standard & Poor's credit rating agency.
Neither political party has come to grips with a sovereign debt that is not only unpayably large but growing. In Washingtonian double-speak, the recent “cut” in government spending really meant a further increase in government spending and subsequent hikes in the deficit and the debt.
This year the deficit “reduction” plan will add $1.6 trillion to the national debt boosting it to $16 trillion. The wonder is not why S&P cut the U.S. credit rating from AAA to AA but why it was not reduced even more.
But what is of greatest concern in all these parallels and similarities of the thirties and of today was not discussed, but the possibility of a reoccurrence is all too real. It is that crimson cloud that covered the world after the first Great Depression.
Sincerely,
Bob Scroggins
New Milford, PA