A full year passed before the government declared we were officially in a “recession.” Gee, thanks for the heads up.
This got me to thinking: Do you think we are in a depression now? I do.
Big-name companies are almost penny stocks: GE trades for less than the price of a toaster, General Motors trades for less than the price of a spark plug, and Citigroup trades for less than the price of an ATM fee.
The stock market is at a 12-year low; I’m exchanging greetings with friends from that era (at the S.F. Chronicle) on Facebook, a sign of the times. We’re all in our late ’40s, ’50s and ’60s. Others have died.
The government is spending billions of dollars to bail out AIG, Citicorp and GM, and we’re coming to accept that these once-stalwart businesses are “yesterday’s lettuce.”
In short, we are dealing with systemic issues, not cyclical ones. We are dealing with issues — high leverage on Wall Street, runaway government spending and consumer debt — that we should have dealt with years ago.
For people in our ’40s, like my wife and I, the downturn has defined the rest of our life. “Be frugal,” we are learning, just like our depression-era parents.
Others, the retirees who define the demographics in our area, don’t have enough time left to recoup their losses. Their “nest eggs” are cracked, and many of their children will fend for themselves, rather than inherit some money or real estate.
“This is a time for the history books,” Jim Coons of Coons Advisors, a financial consultant, told The Associated Press.
Around here, storefronts in our historic downtowns go vacant like clockwork. I keep track on Mill Street as I shuttle my son to school each day.
In Nevada City, my hometown, the building where the Stonehouse, Dos Banditos and Broad Street Furnishings used to be are vacant. Other stores are cutting back their hours.
In both downtowns, the “whisper campaign” is that a slew more businesses are wondering when they will have to shut down. Stay tuned.
Up in our “industrial” area, businesses are closing or cutting back. Our high-tech gem, Grass Valley Group, is on the block.
Foreclosures are on the rise throughout the area, including some from our most notable civic and government leaders.
The unemployment rate is much higher than the stated figure, because many of our out-of-work people (real-estate agents, “consultants,” etc.) don’t qualify for unemployment.
In short, we’re in a depression. We won’t know that for sure for a while, when the government releases “official” figures.
Let’s hope that at that point we can look back on the carnage with a sense of relief that it’s ending. Don’t get too excited, though: This time around, I don’t expect a quick snap back.