I think we can all agree the Great Recession sucks serious ass, but we should also be reminded that it could be worse ... a whole lot worse. If you've got any friends or relatives old enough to remember living through the Great Depression, just ask them what life was like when the world economy hit the floor in the 1930s.
My grandparents were young children during the Great Depression, so their memories are as sketchy as anyone's childhood memories. What sticks out for my grandmother is eating cherries. They grew wild on the ranch she and her family lived on, so the children would spend most of their days gathering cherries and, for a while, that's all they had to eat. Today, grandma hates cherries. It's no wonder.
Grandpa was a "city boy" in a small town near the ranch. He spent his days gathering scrap metal to sell. He'd spend the money on food for his family. He also tells tales of he and his siblings moving their beds outside during the summer months and sleeping in a field. His older brother traveled the country searching for work. He did everything from picking cotton to handyman jobs on small farms to working as a janitor. When he died, their sister found guns and jars of cash buried throughout his yard and under his house. Though he died relatively well off, his house was in total disrepair. He was still so paranoid about the havoc caused by the Great Depression, he avoided spending money — even for basics, like fixing the plumbing in his house.
For every person you speak to who made it through those tough years, you'll find another, similar story of extreme hardship and survival. When you compare our lives now (assuming you've got a roof over your head — many no longer do), we're pretty damn lucky. Times are tough, but they could be much, much worse. So count your blessings, be thankful for the stimulus funds — all of them, including the ones "W" Bush sent all of us in the mail. Be thankful for the T.A.R.P. program that bailed our greedy bankers out. And, remind Washington D.C. not to forget all of the people who are still struggling to get through.
Unfortunately, things won't really get better until banks loosen their grip on the mountain of cash reserves they're sitting atop and more long-term jobs are offered. And, it would be helpful if Republicans in Congress would stop cockblocking efforts to help the unemployed, the uninsured and every other person in our country who isn't in a position to line their pockets with payola. My hope is the GOP will eventually remember their job is to represent us, not just corporate interests and the uber rich. I know, I know ... might as well bet on Mars to do the jig.
Now, two leading economists wielding complex quantitative models say that assertion can be empirically proved.
In a new paper, the economists argue that without the Wall Street bailout, the bank stress tests, the emergency lending and asset purchases by the Federal Reserve, and the Obama administration’s fiscal stimulus program, the nation’s gross domestic product would be about 6.5 percent lower this year.
In addition, there would be about 8.5 million fewer jobs, on top of the more than 8 million already lost; and the economy would be experiencing deflation, instead of low inflation.
The paper, by Alan S. Blinder, a Princeton professor and former vice chairman of the Fed, and Mark Zandi, chief economist at Moody’s Analytics, represents a first stab at comprehensively estimating the effects of the economic policy responses of the last few years.
Here's a video from the U.S. National Archive depicting the affects of the Great Depression on the Southeast: