“THE HARD TIMES ARE THE BEST TIMES”, MY GRANDPA SAID
Posted by politicalpartypooper on January 15, 2009
Since this Repression (Depression/Recession…new word association) is a full jail-break blitz bonanza for the press, I thought I’d add my two cents. Here’s what I have seen.
1. Spending is way down, as it should be.
2. Consumer debt is falling, as it should be.
3. Consumer debt ratios will not reach the heights they reached two years ago for a long, long time.
4. Retails sales are down, as they should be in a Repression.
5. Retail sales are going to be down for a long, long, time.
6. Consumers are saving money again, as they should.
Let me spell out what number five really means. It means, “never again”. My parents used to talk about how their parents had been young adults through the Great Depression, and how that shaped their lives. That period of time was unlike anything before in our history. America believed it was past depressions. This was the roaring twenties! Nothing could go wrong!
Fast-forward eighty years. The parallels are amazing. We had a long stretch of success in the stock market. Consumer spending never seemed to dwindle. Consumer debt was prevalent, but few seemed concerned. Two- thirds of Americans owned their own home (had a mortgage). The new Millennium was a time of hope, and greed, just as the Roaring twenties were.
My grandparents were thrifty. They could stretch fifty cents fifty miles. Besides the farm they owned and worked, they also grew a large garden, and canned foods. They sowed old clothes, sold what they knit, and recycled everything. Nothing was thrown out; there could always be a use for it in the future. Yes, they even had their own still; after all, if you had a cold, what worked better than a nip of shine?
My Grandma once told me she wore and washed the same dress everyday for four years. Imagine seeing that today. How much money would a person save? How many people would tell you that isn’t even feasible? My Grandma would tell you, “Nonsense. If I could do it, anyone could.” Needless to say, visits to their farm as I was growing up were always one part work and one part sheer fun. Every kid should have a farm to visit once a month. But we worked, and we learned the value of fifty cents. My Grandpa used to say, “If you wait until you get to a dollar to learn the value of it, it’s already too late. Learn the value of fifty cents, boy.”
I forgot all about those lessons in the nineties, when money was flowing, credit was cheap, and life was good. I should have remembered something else my Grandpa said. “When life gets hard, that’s when life gets good.” He thrived during the depression. I imagine it awoke in him a spirit of pioneerism, a challenge that up until that point, he had waited all of his life for. My Grandpa died a millionaire, twenty-eight years ago. But all his life, he worked his family farm, scrimping here and saving there, so engraved were the lessons from the Great Depression in his memory. He never saw that money; it was only realized once my Grandma retired from the farm, and sold it. No one knew it would be worth that much, except maybe my Grandpa, and he never told nobody.
There’s a lesson from the days of my youth in all this, and if my Grandpa were here today, he’d tell me to pay attention. He’d tell me, “This is exactly what it was like eighty years ago; here’s how to get through it.”
Thankfully, I remember how they got through it; so much did I love to hear the stories of the Great Depression. Something about that time has always drawn me. Maybe it’s because I see my Grandpa most easily in history right there. He said people back then wanted to work, they didn’t want to rely on Government handouts, because they didn’t trust the Government to keep its word. I see much of that attitude in America today. Some cry about welfare and entitlements. Not me. I know that deep down, an individual with a healthy mind wants to work, wants to provide for his family, and doesn’t trust the Government to keep its promises. People from generation to generation aren’t all that different inside. What motivates us is instinctual, it can’t be changed by gadgets or words.
Here’s where I tell you what I see happening in America in the future.
1. It will take at least one generation for retail sales to bounce back. Maybe even two. People are scared, they are holding on to what they have, and that attitude won’t change once things turn around. That can have the affect of lengthening the Repression, but it will also ensure that the recovery will last longer, be truer, and more Americans will prosper.
2. Personal savings in guaranteed products will continue to soar for at least one generation. Despite what CNBC tells us, most people right now are doubting the stock market. They have good reason to. It’s not trustworthy. I need only mention Bernie Madoff. It’s one thing to take a chance that stocks will rise over time. It’s something altogether different to lose money to people who viciously exploit your blind trust. The loss of trust for Advisers and Money Managers will not easily be earned back. At least not in my generation.
2. America will for at least a generation move away from being a consumer society. The latest of everything, while it may entertain us from a distance, will not entice us to open our wallets. The geniuses of the near future are going to have to return to making things that bring actual value to life. A much more fuel efficient car, for example, will dominate its competitors like nothing we have seen for a long while in the auto industry. Function over form will begin to shape the products we buy. A gadget’s practicality will be the focus for its advertisements, rather than its looks or size. Homes will be built smaller, and less opulent. The middle class built homes complete with marble floors and solid surface countertops. Look for more laminate in the near future. What once cost $500,000 to build will now cost $250,000 or it won’t be built at all.
America is changing. I like the change. I hope you will, too. The hard times are the best times, and some day, we will tell our grandchildren that very thing.