I won’t pretend to be an economist. In fact, I misspelled economist just now when I tried to type it (as well as “misspelled, isn’t that ironic?). But this whole economic downturn thing has got me thinking.
Whenever we talk about our situation you can’t help but think of the last time that something like this happened, the 1930’s. There were a couple of factors that contributed to what happened then, some different from now, but I would like to make a comparison. Why do we have history class? So we can learn about what happened before that wasn’t good, and not repeat it, right? Well lets see if we can’t draw some similarities.
In the 1930’s in California, people were starving to death. At the same time, there were hundreds of thousands of acres of fruit fields, bearing fruit and dropping it to the ground to rot. How did this happen? Money wasn’t moving.
Lets back up a little bit, to the dustbowl. The dustbowl was the result of farmers in the midwest growing cotton to the point that the nutrients were stripped from the soil, making it harder to grow other things on it. That, combined with lack of rain, turned the soil very dry. When the wind came it carried the soil into the air with whatever good soil was left, causing the farmer’s crops to be far too little to produce enough money to pay off their loans, and they were evicted. With the promise of work in California, many of them packed up and migrated across the country to California.
Once they arrived there was a different situation than promised. Coniving land owners had sent the word of far more work than there was, in order to drop the price of labor because of an influx of potential workers. I know this is a lot to take in, but bear with me.
These people had no money, because they were out of work. As a result, no-one was buying fruit and other crops. That resulted in the crops not being profitable enough for farmers to pay workers to pick it, so it dropped from the vine to rot on the ground, all while people starved in squalorly little camps made of rubbish called Hoovervilles. This is a lot like what is happening now.
The money isn’t moving. As soon as journalists started reporting that there ‘might be a recession’ I knew it was on. Just like life imitates art, life will imitate what we see on the news. Six months ago, people slowed their buying of Microsoft products subliminally because of threat of economic downturn. Microsoft starts losing money by paying their employees to develop products nobody is buying. They fire those employees (we are at that point now) and as a result those employees don’t have money to buy groceries, pretty soon the grocers lose money, the farmers lose money, the banks forclose on those farms, stop giving loans altogether because no one is making payments padded with interest… you get the picture. What got the country out of the Great Depression was WWII, because it forced us to do something. We had to get in factories, swap rubber and steel to make things, rather than sit in our houses and hoard the money we didn’t have. Now, I don’t know about you, but I don’t want a war to bring us out of this.
The country is a freeway, and some cars have passed someone sitting on the side of the road fixing a flat tire and everybody is hitting their brakes and no-one knows why. It is going farther and farther back, and some people are even running into each other creating more problems.
I know that there are other factors, such as the shady business practices by corporations etc, but those things would make this post even longer, and I’m sure you have things to do, like sit on your bed so that no-one finds the money you have hidden under the mattress.