WDET interviews Curt Guyette about this story (MP3)
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OK, so maybe it's unfair of us to call what's going on now the "New Depression." Hell, it wasn't that long ago that George W. Bush was sidestepping the issue of whether it technically qualified as a recession. (It does).
And, as bleak as things are today, our national situation really doesn't equate to the hardships that began with the stock market crash of 1929 and didn't really end until America entered World War II more than a decade later.
During the worst of the Great Depression, unemployment in the United States peaked at 25 percent. That was in 1932. Today, that number is at 8.5 percent. Even if you accept what the critics say — that current statistics don't truly reflect how many people are out of work or underemployed — we still have a long way to go before we see Depression-like unemployment.
Unless you live in Detroit.
Even in a state that's the worst in the nation in terms of unemployment — 12 percent at last count — Detroit's situation is catastrophic by comparison, with a rate of more than 22 percent.
People out of work. Families losing their homes. The strain on social service agencies and charities increasing. Economists can call it what they want. The folks loading up moving vans, turning up at food pantries or trying to figure out how to keep the electricity from being shut off don't need anyone to tell them that these are hard times indeed.
The fate of the Big Three automakers hangs in the balance as sales continue to decline, and the ripple effect is more like a tsunami as the number of home foreclosures continues to mount.
But it's more than just an auto industry on life support. The entire country continues to reel from the effects of a housing bubble that has burst, a mountain of consumer debt that's collapsing under its own weight, a stock market that went into freefall and lost more than half its value, and the continued unraveling of Ponzi-like schemes conducted on a massive scale.
And, according to the experts, we haven't hit bottom yet — despite the infusion of hundreds of billions of federal dollars intended to "stimulate" the economy.
So, call it what you will. But there's no doubt this region is going through tough times. And no one is predicting an immediate turnaround.
"We still have a long way to go," Elizabeth Warren, a Harvard Law School professor and chair of a congressional panel overseeing the government's bailout of the financial sector, told Bloomberg News earlier this month. Likewise, Nouriel Roubini, a New York University business professor who raised an early alarm about the impending housing bubble and credit crisis, recently said during a Toronto news conference, "There will be light at the end of the tunnel somewhere down the line, later rather than sooner."
Another economist sounding the alarm far earlier than most was Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C. In a phone interview with Metro Times, he predicted that bad economic news was going to keep coming for the foreseeable future. The commercial real estate market, he predicts, will take a dive as balloon interest payments on recently built malls, office buildings and hotels come due and the money isn't there to pay them.
This won't be good for banks already flirting with insolvency, or already over the edge. Big insurance companies that have invested in commercial real estate will also be hit hard.
So expect more calls for even more federal bailout money.
Add it all up, says Baker, and it may be as long as two years before employers begin rehiring in a major way and the economy starts to rebound.
Which means that people who have already had to tighten their belts will need to notch things even more. But how do you do that?
As we pondered that question, and researched what went on during the Great Depression, certain themes began to crop up, chief among them: sustainability and community.
We can't keep living beyond our means, wasting resources and spending money we don't have. That much is certain. And although it's possible to survive in isolation, it's a lot easier making it though hard times when we lend a helping hand to each other.
What follows is a look at a few folks who can help show us a way through these difficult times. You'll also find lessons offered — and reason to believe things will get better — in some of the literature, films and music that the Great Depression spawned.
And there is reason to hope. We've been though worse before, and have come out stronger because of it. As Ma Joad, talking about the resilience of working folk, says in the film version of John Steinbeck's depression classic The Grapes of Wrath: "Can't nobody lick us. We'll go on forever, Pa. We're the people." —Curt Guyette
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