I tell you I don’t get it.
Where is this great depression? Yes, I know the statistics. Yes, I know unemployment is up…house prices are down…blah-blah-blah….
But that’s what happens when house prices are too high. They go down. And when the price of labor is too high, then it has to come down too.
I know this sounds heartless, but it’s not. I have nothing but a bleeding heart for suffering folks. I’ve seen them. Not all of them are starving on the streets of Calcutta. One was an old lady, middle-class, shut away in a tiny room in a senior citizen’s home with her threadbare nylon nighties and a photo of her English teacher son who’d come by to see her three years before. Her smile was always extra bright and cheerful. Come again, she told me the Christmas I stopped by with my dog, and she hobbled carefully to the door to see me out. She didn’t know me from Eve. But I hadn’t seen my own mother for about the same length of time and it was a kind of guilt visit. Many months later she threw herself out of the window of her tight little studio and broke into two on the compound wall. I know, because I was getting out of my car when it happened. I thought it was some kind of large bird until the pieces bounced on the ground.
So yes, people suffer.
But right now, I’m not seeing suffering. Not where I live, anyway.
I’ll tell you what I’m seeing.
Yesterday, I needed someone to fix a bath tub that wouldn’t drain. I called around. I got answering machines. The first call back came two hours later. If people needed to work so bad, you’d think I’d have been flooded with calls. And when they called, you’d think they’d have time free for a simple drain job that needed a plunger and some elbow grease. No. They were all busy doing something else or didn’t do small jobs or didn’t come out to the city or didn’t work for less than $100 minimum.
In twenty-five years of working, I’ve never had the luxury of telling my boss that I needed hundred bucks to roll out of bed. I told them there’d be more work, regular work, bigger jobs if they’d only show up. No dice. The cheapest guy charged $50. That is, if it was a simple job. If it took a bit longer, it would be a $100. Meanwhile, the guy whom I usually use wasn’t even around. He was too busy taking his son to school and getting high after that. Where did he have the money to get drunk on a regular basis? Don’t ask me. I drink water. Can’t afford any bad habits these days.
It was the same in Florida, when I was there. Had a guy come over to sell me a software program. He was unemployed he told me. On disability. I couldn’t help squinting and looking him over. Whatever disability he had hadn’t got in the way of his appetite. He was a cool 300 pounder. I asked him what the matter was. A bad back he said. But when he walked over to pop the program into the machine, his walk was perfectly good.
I know about bad backs. My dad was laid up with a bad back once. For two days. A slipped disk. He was in agony. Couldn’t move an inch. Needed to be fed in bed. He still walks with a slight stoop. Never took a day off before or after. Still, I’m a soft touch. I showed the guy some exercises he could do. And a simple diet. I worked it out on paper, how many calories, how many pounds. It was the weight that was killing him, not his back.
He had only a very cheap health insurance policy he told me. I haven’t carried insurance for the last several years, so I told him, you don’t need it, I showed him the sites I used to self-medicate. He was interested and wanted to learn more.
It was all the fault of the bankers, he said, the way things were. I agreed. They’d moved all the jobs to China and ruined the job market. The government ought to do something about it.
I asked him how he managed. He said he’d had to cut back. He could only eat out twice a week and even then it was at a cheap diner. He couldn’t afford more than 20 bucks for each eat out. I said that was plenty. I was getting pretty heartless by then.
He lived with his girlfriend in her house that she owned. She was retired but ran her own business on the side. Between the two of them, even with his disability, they had about 2500 bucks coming in every month. In Florida, you can rent an apartment for 500 bucks, a decent house for 750. That’s 1750 left over. They had no kids.
I said, can’t you start your own business on the side? He was a trucker. I asked if he’d been laid off. He said no, he quit. They weren’t paying good any more. They wanted to give him 15 bucks an hour and the benefits weren’t much. But starting a business was too hard because of all the regulations. It was 5000 for the license if you wanted to pick people up from the airport and drive them back into town. I said what about being a courier. Take stuff back and forth for businesses. He said, it’s an idea. I said good luck, stay in touch.
After that, I walked across to the post office to pick up some stamps. On the way, I noticed a thrift store with some nice plastic organizers. I’m a sucker for plastic organizers so I went in. You could buy a whole furniture set for under 100 bucks. Cooking vessels for 50 cents a piece. A shirt in perfectly good condition was a buck fifty.
There was a Salvation Army round the corner from the store. They were collecting cans of food to give away.
I drove to the local Walmart. Eggs were still around a buck. After searching a bit, I could find a loaf of bread for 89 cents. Flour was still cheap. There were deals everywhere, some good, some great.
Most of the people shopping there weren’t middle-class. No yuppies, for sure. They were definitely lower middle-class or “poor.” You could tell they were “poor” because they were overweight..or, if they were thin, they were overdressed. The poor women I saw all seemed to have on shiny new clothes. Lots of sequined string tops, bright flip-flops. Their finger nails had different shapes and their shopping carts were bursting with brands. Not cheap stuff either. Meat, cheese. No cabbage and potatoes or rice and beans. That was on my shopping list, not theirs.
Cell phones were all over the place and people chatted on them as they wheeled their carts out to their cars.
The chat – accompanied by gull-like shrieks – didn’t have much to do with the economy or hard times or starving. It was – girl, you gotta see this movie….hey joey, you gonna stop by after the game?…
That’s the great depression in America.\
Afterword:
I am posting some comments I got as soon as I wrote this rather mild criticism of the exaggerations surrounding the ongoing “depression.” The comments were sent to an earlier post about BP, but were rather obviously a response to this post, because there was nothing in the BP post to provoke anyone. I assume he’s someone – probably unemployed himself- who doesn’t like my characterization of the “poor” I’ve run into so far.
Since he actually has a net connection and can type, he must be one of the more literate among his peers, although I can’t say I like his style. Maybe he could get a gig at Rolling Stone. They seem to like that gonzo business.
So much for the sainted working class. This specimen is probably being fed and housed at tax-payer expense. Your tax-dollars pay for his internet connection and anonymizer. I must say, there are times I think the environmentalists are perfectly correct about the human species. I know arthropods with more dignity than this. But he does prove my point about the working class. It’s been corrupted by subsidies.
We’re ruled by two pathologized classes – one at the top….and one at the bottom.
Anyway, here’s my response:
Dear Mr. “N*****”,
Assuming that is your name rather than a nom-de-plume of questionable taste, I would suggest you address your objections – such as they are – to the appropriate post, which I’m assuming is “The Great Depression, American Style”.
I assume that is what has provoked your ire.
I normally don’t allow obscenities but on the assumption that this is the maximum of your expressive capacity, I’ve made an exception in your case.
Based on your rather colorful self-description, i would advise seeing a doctor asap.
*****************************************************************************************
Comments can be seen at this post:
Lila,
Your observations reveal another MSM lie. (Do they ever tell the truth?). As Jim Quinn has pointed out the consumer has not really cut back.
http://www.lewrockwell.com/quinn/quinn36.1.html
“Now we get to the Big Lie about frugal consumers paying off debts, cutting up those credit cards, and eating Raman noodles 5 nights per week. Household and non-profit debt, which includes mortgages, credit card debt, auto loans, home equity loans, and student loans peaked at $13.8 trillion in 2008. After two years of supposed leveraging, frugality and mass austerity, the balance is $13.5 trillion. Consumers have buckled down and have paid off 2.2% of their debts, it seems. Not exactly going cold turkey, but it is a start.
But wait. Consumer debt outstanding is $300 billion lower. If you hadn’t noticed, the banks in the United States have been taking a few losses on their loans over the last couple years. A simple search of the Federal Reserve website reveals that banks have charged off 5.66% of all their loans in the last two years. The charge-off rate in the 2nd quarter of 2010 was 6.66%. To verify for yourself go to the Federal Reserve website.
http://www.federalreserve.gov/releases/chargeoff/chgallsa.htm
So, let’s get down to the nitty-gritty. If consumer debt was $13.8 trillion at the end of 2008 and the banks have since written off 5.66% of that debt, total write-offs were $800 billion. If total consumer debt now sits at $13.5 trillion, then consumers have actually taken on $500 billion of additional debt since the end of 2008. The consumer hasn’t cut back at all.
They are still spending and borrowing. It is beyond my comprehension that no one on CNBC or in the other mainstream media can do simple math to figure out that the leveraging story is just a Big Lie.”
Thanks a ton for that link, Barry.
I’ve been sorely puzzled myself but since this deleveraging has been uniformly reported, without controversy, I’ve just assumed that my experiences were the exception.
I just don’t see the kind of “pain and suffering” that the media is talking about.
I ran into an Af-Am real estate agent. A woman who went back to work in her forties. She says she’s doing plenty of work and making good money, even part-time.
It’s different kind of work but it’s work.
Prices are going up in a lot of things (potatoes recently, and electricity and insurance), but it’s not drastic yet.
I think the extension of benefits and the erasure of stigma is actually creating more dependents…from the middle class.
I like it. Your literary approach works very well. Everything is so abstract these days to the point of uselessness. Going around, observing, trusting your observation and judgement–now that is being an engaged human. Do not want to be one of the “informed” who spout off everything from the whitehouse, cnn and most unctuously NPR.
Yes, I’m beginning to think that.
I am completely and utterly confused by the economic commentary.
The more I read it, the less I understand it..
Indeed, despite a bit of training in economics I find most of the economic commentary pointless, confusing, invariably de contextualized, contradictory, meaningless and often misleading. My fault for breaking my promise to avoid MSN and financial blogs…..Best to be wise, prudent and thoughtful–but never media “informed”. How much happier the lot of us would be as 18th century farmers and or Phoenician traders……….
R –
this is so true. When I traded without knowing a thing, I was much happier and more successful too..except once.
Now I’m too terrified to do anything without second guessing everything…
The days I don’t follow the news, my life is happy.
The minute I read the MSM, I’m depressed and annoyed and feel compelled to dash of rebuttals on the blog or to my friends.
It’s terrible. Everything is now everyone’s business.
Pingback: Is The Media Misleading Us About Deleveraging? | the mindbodypolitic
I saw these over at Survival Blog and thought of your comments. The first one enlightened me a bit as to why the crowds at night in places like Walmart seemed so different, dangerous and deranged looking compared to the daytime crowd.
Wal-Mart’s CEO Provides The Starkest Visual Of The Modern Bread Line Yet
http://www.zerohedge.com/article/wal-marts-ceo-provides-starkest-visual-modern-bread-line-yet
Corn, Soybeans Hit Two-Year Highs While Cotton Jumps To 15-Year Peak
http://www.investors.com/NewsAndAnalysis/Article/547853/201009201845/Corn-Soybeans-Hit-Two-Year-Highs-While-Cotton-Jumps-To-15-Year-Peak.htm
Food-makers ready to raise prices
Kraft, Sara Lee responding to increases in commodity costs
http://articles.chicagotribune.com/2010-09-17/business/ct-biz-0918-food-prices-20100917_1_commodity-cost-prices-sara-lee
What depression? Been to any casino lately? Especially on a weekend. Here in San Diego 18 year old customers gamble. And they don’t gamble conservatively either. I witnessed one young man plop around $3,000 down at one table before starting to recoup a LITTLE, but, expect he left with little or no money. Insanity!
Must be some money trees here somewhere.
I think the underground is alive and well.
Nothing like in your face govt corruption to turn citizens into racketeers and gamblers. How can you blame them now? They see the shysters at the top get off scott free…
People have money…
I notice foreclosures of very expensive homes (foreclosures are themselves over 700,000) being snapped up by investors…
Same with some commercial properties.
I wonder if some of this stuff isn’t exaggeration to justify inflationary policies or other forms of intervention.
“Been to any casino lately?”
Yup, it was pretty empty, with very few children of the Boomer generation doing any free spending.
The parking lots of the gambling boats and strip joints I drive by daily have not been as full as in the past, but at times they are packed.
I walked through the collage aged drinking districts one weekend until closing time, they were not very busy. I asked the bouncer why it was so dead, he had no clue.
An unemployed guy at the shooting range picking up brass after a slow day of fishing told me how he spends too much time at the casinos, losing too much, and of having to sleep in his truck for five days until he could sell his tools to get back home.
He still had a cell phone, but the conversation he had on it that I overheard was all about looking for work.
People have assets and credit, but little wealth creating savings.
“Baby Boomers are not prepared for retirement and will be shifting dramatically from consuming to saving. As consumer expenditures decline from 70% of GDP back to 65% of GDP, consumer debt will resemble the home price chart to the downside…
With annual personal income of $12.5 trillion, Americans will need to save an additional $500 billion per year. This means $500 billion less spending at the Mall, car dealerships, Home Depot, tanning salons, and strip joints…”
http://financialsense.com/contributors/james-quinn/the-child-of-the-mother-of-all-bubbles
Kicking the can down the road.
What I mean by all that is, while we still see people spending and low prices are still with us, it’s the result of a lag and or subsidies, much like what happened in 2007 after the peak of the housing bubble when people were still buying real estate based on future expectations of rising prices.
Remove the underlying support and things fall down, slow motion train wreck style.
Clark –
yeah – that’s the middle class..I see the middle class being pinched
but I think at the bottom, things might not be much different from before.
In fact government subsidies might have been extended..
plus for some people, houses have come down in price and so have rentals and so they aren’t that strapped
…
I don’t know.
I think there are different worlds out there
skilled versus unskilled
singles versus married
business versus salaried
and I think it’s also because I’m in the dc area
— lots of govt work, and the universities and schools aren’t hurting for money like regular businesses..
Pensioners..
Yes that’s where it pinches
What’s true in one area of flyover country seems to often be true of all of flyover country.
The rentals in my area have gone up in price.
I saw one mention on the housingbubbleblog of rents having gone up generally. So far, they do know housing.
I think you’re right about the bottom, but Walmart’s midnight sales tally will indicate when the lag is felt.
I know a little about the DC area 2nd & 3rd hand, it’s a world of it’s own.
The universities and schools are a bursting bubble too, majorly funded by home equity loans, as a result the education system should be hurting for money, but the universities income is based on increasing debt, the pooling and selling of student loan debt, all a part of the last and greatest bubble, government.
Another lag is in schooling, the stories of high student loan debt with no job, or a low paying job that barely services the debt are getting more numerous. With recent record enrollments, the trend of bad results will only increase unless employment kicks up. Think those, “Disposable companies” will employ them?
Kicking the can yet again? Even if for only one more year.
I don’t know.
I think it will be a terrible time for some..and for others, hard but not terrible.
Depends on whether we get a hyperinflationary scenario.
A collapse would be better than hyperinflation.
Hyperinflation,… If you haven’t read these, via LRC,… I’m not sure, but it seems to refute Mises, among other very interesting things it discussed stealth monetization, maybe that’s what’s driving the price of gold, much like when gold went up above $450 per oz., I think that’s when China started to secretly buy gold while everyone said it wasn’t happening.
Makes a person wonder what else is going on that we don’t know about, the unknown unknowns.
http://gonzalolira.blogspot.com/2010/09/stealth-monetization-in-usa.html#comments
From a link in the article above:
http://gonzalolira.blogspot.com/2010/09/was-stagflation-in-79-really.html
Hey – thanks
Yes, I read the piece. It was on 321gold – I usually go through all the articles there.
I’ll look at it again, I’ve forgotten the details of his argument.
Have you seen Bob Wenzel’s piece on gold where he discusses the level of interest on Wall Street
It’s very interesting.
I think I closed the Wall Street article without reading it, now I can’t find it, yet.
I think that when Gonzalo Lira says there was inflation in the 1970’s without an increase in the money supply, I wonder, the promises the government and companies made in future benefits in exchange for not seeking higher wages at that time, perhaps that was a form of money creation, into the future? Otherwise people then might not have spent, and saved instead? Something to that effect.
Great article , I am going to spend more time learning about this topic