Great Depression

[CNY rider]

I know we have a great group of well read people here.
I want to read more on the Great Depression. I'm particularly interested in economics but any broad overview of the Depression would be appreciated as well.

Suggestions for my reading list?

Thanks.

[Viper]

By the time I mail it to you, it'd be cheaper online to buy.

http://www.amazon.com/Forgotten-Man-History-Great-Depression/dp/0066211700

The Forgotten Man
by Amity Shlaes

[Sandy]

Not being flippant, and I realize that I am not answering your question, but my immediate thought when reading your post was that all you have to do is observe what is happening around you. I know that we are not in the "Great Depression" but what is happening to our economy and equity markets is simply staggering, stunning, and scarey, and I know they are all s words. We are in a deep, deteriorating recession, that will be with us for a while.


Seriously Stunned Staggered Scared Serotta Sandy

[RPS]

Suggestions for my reading list?

Thanks.Not what you asked at all, but if you get a chance I suggest you talk to some of the people who lived it. It won't tell you much about what caused it, but will put it in a clearer human perspective.

[CNY rider]

Viper, thanks, that looks like just the kind of book I am looking for.
It's going in the cart.

Sandy, I think learning about the Depression of the '30's is going to come in handy in navigating and understanding the next 5 years. Just a hunch.

And agreed, human history from those who lived through it is invaluable.
So many of the greatest generation have already left us though.

[bigbill]

The Worst Hard Time by Timothy Egan.

[nm87710]

Not being flippant, and I am realize that I am answering your question, but my immediate thought when reading your post was that all you have to do is observe what is happening around you. I know that we are not in the "Great Depression" but what is happening to our economy and equity markets is simply staggering, stunning, and scarey, and I know they are all s words. We are in a deep, deteriorating recession, that will be with us for a while.


Seriously Stunned Staggered Scared Serotta Sandy


:crap: :crap: :crap:

Sorry, but this is nothing even close to the Great Depression. GD had 25-30% unemployment! Not saying it isn't painful but it's more like a painful saddle sore that you can't get off your mind while riding but given some time and proper care it will get better - just not overnight.

Just grab a beer, be thankful for the important things in life and http://www.youtube.com/watch?v=yjnvSQuv-H4 :banana:

[OperaLover]

The Worst Hard Time by Timothy Egan.

That's on my list as well as Grapes of Wrath by Steinbeck. I read it in my younger days and the descriptions of the hunger drove me to tears. Powerful stuff.

[Ray]

:crap: :crap: :crap:

Sorry, but this is nothing even close to the Great Depression. GD had 25-30% unemployment!

The market crash started in 1929 - unemployment didn't hit 25% until 1933 or 1934 if memory serves (not that I was there, but I checked it out recently). Not saying that this will turn into a great depression, but 6% unemployment today doesn't mean we're not in the early stages of one. Time will tell. My dad was 12 in 1929 - he used to talk about the depression a lot, but from the perspective of a kid and teenager - not from a breadwinner.

Here's an interesting article from a few days ago about what a modern day depression might look like, given the underlying differences between our world today and the world of the 1930s. Pure speculation, but interesting to think about. I hope it doesn't go that far.

http://www.boston.com/bostonglobe/ideas/articles/2008/11/16/depression_2009_what_would_it_look_like/?page=full

-Ray

[johnnymossville]

It's really hard to say where this is all heading, but I can definitely see it not being good. Think Positive Thoughts! :)

[93legendti]

The market crash started in 1929 - unemployment didn't hit 25% until 1933 or 1934 if memory serves (not that I was there, but I checked it out recently). Not saying that this will turn into a great depression, but 6% unemployment today doesn't mean we're not in the early stages of one. Time will tell. My dad was 12 in 1929 - he used to talk about the depression a lot, but from the perspective of a kid and teenager - not from a breadwinner.

Here's an interesting article from a few days ago about what a modern day depression might look like, given the underlying differences between our world today and the world of the 1930s. Pure speculation, but interesting to think about. I hope it doesn't go that far.

http://www.boston.com/bostonglobe/ideas/articles/2008/11/16/depression_2009_what_would_it_look_like/?page=full

-Ray
The rate was 6.9 percent in 1993, so I wouldn't draw too much concern from that.

[cadence90]

The incredibly moving book "Let Us Now Praise Famous Men", by the great writer James Agee and the amazing photographer Walker Evans.

A revolutionary book, it brings a broad, personal and particular take on the Great Depression home in extremely eloquent words and beautiful, haunting images.

http://content.answers.com/main/content/wp/en-commons/thumb/c/ca/240px-Letusnowpraisefamousmencove.png

[Climb01742]

i believe the definitive book on the subject is considered to be this one by john kenneth galbraith:

http://www.amazon.com/Great-Crash-1929-Kenneth-Galbraith/dp/0395859999/ref=sr_1_1?ie=UTF8&s=books&qid=1227260763&sr=1-1

[BdaGhisallo]

http://www.amazon.com/Great-Contraction-1929-1933-Princeton-Editions/dp/0691137943/ref=pd_bbs_sr_5?ie=UTF8&s=books&qid=1227264585&sr=8-5

Here's the definitive economic history of the Great Depression and argues that policy mistakes by the Fed Reserve and Treasury made the event much worse than it should have been.

[1centaur]

I believe that having the economist most noted for his study of the GD running the Fed is fortuitous. We won't make THOSE mistakes again, but we will make others. Not propping up the auto companies might be one such (or not).

Anecdote: My son had to write a life history of an older relative for a high school paper. Involved many hours of interviews with a great aunt. The most surprising thing to me was how little living through the Depression had affected her childhood. Her father was an electrician in the family business in a New York suburb, and he had a job throughout. She seems not to have suffered emotionally (no TV and good parents probably helped) and did not have clear memories of significant suffering around her. As the cliche goes, a recession is when others lose their jobs; a depression is when you lose yours.

[Ray]

The rate was 6.9 percent in 1993, so I wouldn't draw too much concern from that.
I'm not drawing concern or predicting anything - just pointing out that today's rate doesn't necessarily mean we're NOT headed for a depression. I hope we're not. I think that on one level, the knowledge of the folks running the fed and, hopefully, treasury should prevent us from making the same mistakes again. Then again, these are different times and we could just as well be making completely different mistakes that will lead to something we can't really predict. The estimates I've read is that unemployment may hit 10% sometime in the next year. If it gets that high, I guess that just qualifies as a bad recession, unless you're one of the 10%. This just feels like a situation that could possibly continue to spin in directions we're not anticipating and prepared for. I'm not pessimistic that the worst will come but I can't say I'm optimistic that it won't either.

Just a cork on a big friggin' ocean and I can't really see too far past the next wave. I'm hoping that Bernake and Summers (or whoever) has a tall damn observation tower on their ship so they can see a lot more of the ocean (and understand what all of those weird cross-currents mean).

-Ray

[Samster]

if you go industry by industry, "recessions" are happening pretty much continually. it's just when they all go together, you get the big whopping impact of an economy-wide recession.

imo, a lot of the irrational fear out there is press driven. but there are fundamental issues that need address.

i don't know the actuals, but from everything i've read so far, i think it's a fair bet that on average for the last 25 years or so, we've spent about a $1.05-$1.15 on every $1.00 earned. that's both at the micro and macro levels. obviously not sustainable.

so short term, what we need to do is start spending between $0.95-$0.85 on every dollar earned, especially at the individual level, on average.

it actually seems like we're starting to do that (i.e., spend less.) however, spending less means buying less, which means inventories pile up, cash flow slows down, businesses (largely financed on debt) can't pay their obligations and therefore go out of business, unemployment increases, average pay goes down, spending goes down, buying goes down, more inventory piles up, etc.

in many ways, the solution is the problem, and the problem is the solution.

it's a beautiful trap we're in. there's no easy way out.

[Lifelover]

...Pure speculation, but interesting to think about. I hope it doesn't go that far.

http://www.boston.com/bostonglobe/ideas/articles/2008/11/16/depression_2009_what_would_it_look_like/?page=full

-Ray

That was interesting and does make you think a little. It also make me appreciate my Gov't job.

[RPS]

Here's an interesting article from a few days ago about what a modern day depression might look like, given the underlying differences between our world today and the world of the 1930s. Pure speculation, but interesting to think about. I hope it doesn't go that far.

http://www.boston.com/bostonglobe/ideas/articles/2008/11/16/depression_2009_what_would_it_look_like/?page=full

-RayRay, don’t you find it odd that not only do they assume a depression is unlikely to be as bad as before because “we’ve learned” so much about how to avoid and/or manage it, but that by default they ruled out that it could be much worse than before? No doubt the same problems wouldn’t be allowed to fester, but who’s to say new and completely unanticipated conditions couldn’t make things far worse? :confused: Just wondering.

[Vancouverdave]

Several great books have been mentioned, and you should add "A Peoples' History of the United States" by Howard Zinn.

[zap]

snipped

it actually seems like we're starting to do that (i.e., spend less.) however, spending less means buying less, which means inventories pile up, cash flow slows down, businesses (largely financed on debt) can't pay their obligations and therefore go out of business, unemployment increases, average pay goes down, spending goes down, buying goes down, more inventory piles up, etc.


From what I have read and heard, many manufacturers have done a better job regarding inventories, so have been ahead of the recessionary curve. Big difference today compared to the early 30's. This could bode well for getting out of a recession quickly.

There is a lot of bad news and if one focuses on the stock market, there might be more ahead. At least through the end of this year as folks sell for tax purposes, redemptions, etc.

Additionally, if team obama doesn't stop dickering with the clintons soon and nominate a treasury secretary, this too will eat at the market.

[RPS]

Additionally, if team obama doesn't stop dickering with the clintons soon and nominate a treasury secretary, this too will eat at the market.On GMA this AM they mentioned he is suppose to announce her as Secretary of State after Thanksgiving.

[haiku]

.

[bzbvh5]

How many of us are going to have to sell our bikes to put food on the table or we have no place to house them? We will no longer have a reason to visit the forum. Our work shedules from the job we really don't want but need won't allow for weekend rides with our former riding group.

I think that some of us are going to give up cycling (not by choice) before things get better.

[Ahneida Ride]

Iceland just collapsed .... I'ts bankrupt ....

I'ts going to happen here. An economic collapse of which will make
the Great Depression look like a trip to Michael Jackson's dreamland.

In a real economy, you do something for me. I do something for you .
You shine my shoes, I wash your car ... real work is traded.

Today , I shine your shoes, you go to the bank and borrow notes,
created outa thin air to pay me. No work was exchanged. The bank
creates it's notes outa thin air by leveraging fed reserve notes, also
created outa thin air. Again, no work involved.

Greed, the human propensity to want it all, promulgates the generation
of too many notes (non-notes really) out thin air.

Ultimately the notes become useless as they cannot be repaid and sent
back to the computer spreadsheets from which they were originally created.

We have a phony economy.

The "dollar" hegemony is about to reach it's ultimate demise.

I'll need a job to eat. Please remember me.

Now go out and ride.

[alancw3]

perhaps i am wrong but i thought that in the gp unemployment was 10%. also there is a book out there that i have not read "the invisable scar" that addresses all those people that lived through the gp.

[93legendti]

...Today , I shine your shoes, you go to the bank and borrow notes, created outa thin air to pay me...


No, I don't and I doubt you do. I take the money out of my wallet. Borrowed from no one.

...No work was exchanged. The bank creates it's notes outa thin air by leveraging fed reserve notes, also created outa thin air. Again, no work involved...


"No work was exchanged"...who made that the standard for fulfilling a contract? The standard is consideration.

My local banks don't create/print money and neither does your local bank(s). Please provide the name of your "local bank" that create/prints money.

[93legendti]

...Additionally, if team obama doesn't stop dickering with the clintons soon and nominate a treasury secretary, this too will eat at the market.


I think the name should be Pres. Clinton Take 2, Pres. Clinton 2008 or Pres. Clinton Term 3.

Seems like we are yet to see one fresh face that wasn't in the Clinton Administartion.

[Ray]

Ray, don’t you find it odd that not only do they assume a depression is unlikely to be as bad as before because “we’ve learned” so much about how to avoid and/or manage it, but that by default they ruled out that it could be much worse than before? No doubt the same problems wouldn’t be allowed to fester, but who’s to say new and completely unanticipated conditions couldn’t make things far worse? :confused: Just wondering.
Yeah, I do. Like a lot of us, I have no idea how this is gonna play out. Hell, Paulson doesn't - how am I supposed to? So I have one little guy on my right shoulder and another little guy on my left shoulder. One of them is the eternal optimist and the other is the eternal pessimist. The pessimist figures that this could be worse than anything we've seen and every structure and convenience we've set up as a society could collapse and we won't even have our cable tv to entertain us in our jobless states and that food distribution networks will fall apart and there will be mass starvation, even on the part of the people who still have "money".

The optimist figures it'll just be a really bad recession and a bunch of people at the bottom will suffer (like they often do) but we'll pull through it and resume something approaching life as we know it. Not much of an optimistic scenario, I'll grant, but about the rosiest I can come up with. I try to stay out of this little disagreement because I don't have much to add to it. I just figure the truth PROBABLY will lie somewhere between the two extremes and I hope I can muddle through and keep food on the table. I'm lucky or smart or whatever in the sense that I have nearly zero debt, but I'm not sure that'll help if the excrement really hits the fan. So perhaps I should have mortgaged myself silly and lived way beyond MY means to, if we're all going down with the ship anyway.

We'll see. I wasn't putting that article forth as a prediction, just one sort of interesting speculative exercise.

-Ray

[palincss]

Not what you asked at all, but if you get a chance I suggest you talk to some of the people who lived it. It won't tell you much about what caused it, but will put it in a clearer human perspective.

One of the masters, who died Oct 31 of this year, did just that. Studs Terkel in his 1970 workHard Times: An Oral History of the Great Depression "...assembled recollections of the Great Depression that spanned the socioeconomic spectrum, from Okies, through prison inmates, to the wealthy", according to the Wikipedia.

"Terkel interviewed hundreds of people across the United States for his book on the Great Depression of the 1930s. In 1973, he selected several interviews that were included in his book to be broadcast in eleven parts on the Studs Terkel Program on WFMT radio (Chicago, IL). This gallery (http://www.studsterkel.org/htimes.php) includes the interviews in those programs.

"Terkel questions people about their recollections of employment problems, the crash of 1929, organized labor issues, “farm holidays” where crops were destroyed, and U.S. President Franklin Delanor Roosevelt’s New Deal programs. He asks them how they managed financially and personally through the economic slump and what personal qualities surfaced as a result. In particular he seems interested in exploring the relationship between their personal plight and values and their awareness of national issues and society’s values."

The web site includes in Real Audio format 72 recordings.

[csm]

I doubt that ANYONE that posts here will have to sell a bike to put food on the table. It's just not gonna happen.
I don't think things are anywhere near as bad as they were during the great depression. think about it. where are the shanty towns? where are the bread and soup lines? it's just not the same. to continually compare that period to now is doing a diservice to where we are now. from the way the economy is talked about and portrayed in the media, you'd think the US has failed and people are cheering. It simply isn't the case and is not gonna happen.
sure, things are bad. but they are not THAT bad. we've survived worse and we will survive this.

[RPS]

.Thanks, I appreciate the recommendation. I was thinking about older members of my family who lived through that period and are still living. It wasn't here in the US, but not surprisingly the depression affected Cuba about the same. My dad was a young boy but worked to help the family get by, as did just about everyone. My oldest uncle who is now 99 and still relatively sharp has told me some interesting stories as well.
Rick

[RPS]

I don't think things are anywhere near as bad as they were during the great depression.Absolutely -- no doubt about it. Some don't think we are even in a recession yet. :rolleyes:

The question is whether we could "theoretically" sink into a depression similar to the one 80 years ago.

[johnnymossville]

...I don't think things are anywhere near as bad as they were during the great depression. think about it. where are the shanty towns?...

One place I can see a problem developing today is that so much of our workforce are in fields that aren't necessary for basic survival and needs, but for "entertainment" and frivolous wants. Things we can do without. If people stop spending on crap and start focusing on what's important an awful lot of people are out of work.

If we do get to that point, and I doubt we will, I think it would be necessary to spend BIG on improving/rebuilding the U.S. infrastructure. If you are willing to get your hands dirty and work hard you'll be fine.

[goonster]

where are the shanty towns? where are the bread and soup lines?

http://img.timeinc.net/time/photoessays/2007/stock_crash/stock_crash_07.jpg

(Nice suits)

It didn't go from this to this overnight, y'know . . . :rolleyes:

http://www.businessweek.com/the_thread/hotproperty/archives/Hooverville2.jpg

[1centaur]

In order to avoid a depression the collective whole needs to believe that it makes sense to invest in the future, rather than tightly grip onto cash to survive. In order to have that belief, you need a banking system in which your money is secure (not true when Hoover let the banks fail by the thousands) and you need a regulatory system that encourages economic activity (not helped in the '30s by Smoot-Hawley, a trade restriction bill) so investors have something to believe in - greed is good. It appears we have the first of those conditions, and we all await the new administration's choices on the latter. Get too heavy handed on the prospective accumulation of wealth and investment will dry up, killing the economy. Direct too many resources to unproductive uses that fit a political vision and the same result will occur. The yin and yang of big government is that it only gets paid for by a big economy. There is no chicken and egg argument there - big economy has to come first. Does Obama get that in his bones? That's what people are watching for. If he is more investor friendly than his harshest critics fear (which is why the Treasury secretary pick was so carefully watched, though I think unduly so), we may be setting up for a sustainable rally.

9-10x trailing 12-month earnings is a recession trough average for the US stock market. Pick your earnings number for 2009 - are we there yet? I say no, but it's not all about a magic number, it's heavily dependent on psychology. A capitalist in Washington suggests one level of potential growth and a socialist suggests another. On the darkest days we're happy to have either, but over time we need the former because growth is what gets everybody what they want.

My best guess is that Obama's not a capitalist at his core but he's politician enough and thoughtful enough not to ignore entirely the experienced advice he will receive. I don't see a depression and I think tax loss selling season is a good time to start dollar cost averaging into the stock market - my powder's been pretty dry the last 2 months. Hey, GE 50% lower than where Buffett bought might not be a bad starting point. I'm more excited by valuations on some stocks than I have been for a very long time. Anybody really want to bet oil stays down here? Anybody want an oil stock 85% off its highs? You have options.

[JLP]

I found the summary and links at wikipedia to be clear and informative:

http://en.wikipedia.org/wiki/Great_Depression

[goblue]

32 years ago?

[ti_boi]

The market crash started in 1929 - unemployment didn't hit 25% until 1933 or 1934 if memory serves (not that I was there, but I checked it out recently). Not saying that this will turn into a great depression, but 6% unemployment today doesn't mean we're not in the early stages of one. Time will tell. My dad was 12 in 1929 - he used to talk about the depression a lot, but from the perspective of a kid and teenager - not from a breadwinner.

Here's an interesting article from a few days ago about what a modern day depression might look like, given the underlying differences between our world today and the world of the 1930s. Pure speculation, but interesting to think about. I hope it doesn't go that far.

http://www.boston.com/bostonglobe/ideas/articles/2008/11/16/depression_2009_what_would_it_look_like/?page=full

-Ray


Good article Ray. Thanks.

[ti_boi]

I doubt that ANYONE that posts here will have to sell a bike to put food on the table. It's just not gonna happen.
I don't think things are anywhere near as bad as they were during the great depression. think about it. where are the shanty towns? where are the bread and soup lines? it's just not the same. to continually compare that period to now is doing a diservice to where we are now. from the way the economy is talked about and portrayed in the media, you'd think the US has failed and people are cheering. It simply isn't the case and is not gonna happen.
sure, things are bad. but they are not THAT bad. we've survived worse and we will survive this.


Probably not. But I think that a good bike (always a wise investment) will seem like something to cherish and the thought of buying a new one when an old one is just fine might seem excessive for some and impossible for others.

[CNY rider]

I found the summary and links at wikipedia to be clear and informative:

http://en.wikipedia.org/wiki/Great_Depression

That really is quite a good overview.
I just can't enjoy curling up in front of the stove on a cold winter night with the laptop like I can with a good book I'm afraid.

[Bud_E]

...
I don't see a depression and I think tax loss selling season is a good time to start dollar cost averaging into the stock market - my powder's been pretty dry the last 2 months. Hey, GE 50% lower than where Buffett bought might not be a bad starting point. I'm more excited by valuations on some stocks than I have been for a very long time. Anybody really want to bet oil stays down here? Anybody want an oil stock 85% off its highs? You have options.

Thank you for your posts 1centaur. I'm no economist but in my gut I tend to agree with your view. Many stocks are looking mighty cheap right now especially with "safe" investments paying next to no interest. I believe that Obama is taking advice from the right folks and can stimulate the economy in the right way to pull us out of this mess. A liberal spending spree might be just what the economy needs right now especially if the money is spent wisely.