Another Perspective of the Current Economic Situation
By Tamara Martfeld
I find that looking at a situation from another perspective, or comparing a current situation to a similar past situation, will frequently help my optimism. For the current “economic crisis” which many feel will bring the country into another Great Depression, I look at the original Great Depression and recent past history.
As bad as it seems now, the original Great Depression was lots worse. Unemployment during the depression was between 24% and 25 % at one point as compared to our current 8%. To really understand the difference, realize that during the time of the Great Depression that 24 – 25% mostly represented the sole earner of a single-income household. Based on my research, double-income families did not really start until the 1950s – I am sure there are exceptions, but I looking at the “normal” situation in this case. The current 8% unemployment has a high likelihood of containing one earner of a double-income household. In other words, in the Great Depression up to 25% of households had no income, and currently less than 8% of household have no income.
In 1979 and 1980 and during the Great Depression we had double-digit inflation; the most recent figures are around 5%. The inflation was worse at times in 1999 and 2000. Comparing the current unemployment and inflation with history, the current situation could be a lot worse.
The whole current market mess won’t affect most people directly, just those who own stock and sell now. If you own stock, simply don’t sell and the stock will most likely bounce back in a few years unless the company goes out of business, and if the company goes out of business you have a tax deduction. The trickle-down affect most will see will be heavily diluted and in reality be “more of the same” but for yet another reason. For example, prices were being raised consistently before the market problems and they will continue to raise after the market problems are solved. Remember that the Dow Jones is the worst indicator of the stock market – why they use it I will never truly understand. Also, in our country just about anyone who asks can get help from the government through Unemployment Insurance, Medi-Care, and Welfare. It may not be the means of choice, but the help is available. People will have to adjust, but most will be fine as long as they don’t panic.
Unfortunately, the media tends to focus only on the bad with very few exceptions, and they seem to exaggerate the effects of the situation to sell their medium. However, watch what happens every time there is a disaster in our country or the world, even with our “enemies”. In the United States there is a drive to help the individuals affected and donations come from all over the country. I cannot speak for other countries as I do not hear what is happening there in this area, but I would be surprised if the people there are not the same as us at least within their borders. In my community (Sacramento, California) if a food closet or toy drive is short of needs and it is announced, the donations pour in. Many of these donations come from people who are struggling to make ends meet and recognize that they can still help others. I don’t know if the needs are met 100%, but the effort is definitely there.
Some people wonder “what this world is coming to”. For a real eye opener read the headlines of a newspaper from 20, 30, 40, or even 100 years ago. They wondered the same thing and we are still surviving, some saying that we are better off now than then. This was brought to my attention through reruns of a old TV program, Dobie Gillis. One of the characters thought it was not worth doing anything for the future (I think it was contributing to a time capsule) because he felt the future would not exist. In the episode they opened a time capsule to see what was in it and to add to it, and in the time capsule was a 50-year-old newspaper with headlines similar to the ones in their current paper. Interestingly, the episode was based in the late 50’s early 60’s (Beatnik era) and I was watching it in the 80’s and the same type of headlines were in my current paper. Since then I have looked and found it to be true that when you are living may seem to be the worse ever, but things were about the same or worse in the past. Everything seems to have a cycle and the longer you live, the more you will see this, and the easier it will be to take it all in stride and see the positive more clearly.
My suggestion is to take a real look at your own current situation:
If you have a job be thankful and do what you can to help those who don’t have a job. If you have not already done so, do everything you can to put aside enough money to meet the minimum expenses for 6 – 12 months. Put this money in easily accessible locations such as a sound bank (not high-risk such as the stock market). You will want this money if the job goes away or an emergency occurs.
If you do not have a job, see if you can take this opportunity to follow your dream. Many people give up their dreams to take a “real” job or follow a “safe” career. Keep looking for the steady job while doing what you can to follow the dream. This may be a hidden opportunity for you. Also, don’t be ashamed of being out of work. When possible, give the gift of letting someone help you. When people help other people it makes the helper feel good. Accepting the help is actually helping the helper.
If you have investments, hold on to them if at all possible. I can almost guarantee that the market for the investment will go back up within 10 years based on history.
If you don’t have stock, don’t panic just because the stock market, especially the DOW, is going down – you will probably not even notice the trickle down effect on your own life. The trickle down effect is likely to be seen as price hikes which we tend to see every year anyway.
If you are in the lucky position of having money to spare, buy from those who are selling the higher-risk investments. Look at the overall stability of a company for stocks and take the risks with which you are comfortable. Other high-risk investments include art, collectibles, and bonds. Take advantage of the people who are panicking – they are selling anyway, so why not be the one to profit?
Whatever situation you are in and whatever you do, remember to keep looking up. Look at what you have instead of concentrating on what you do not have and be thankful. Believe that things will get better in the future.