Wednesday, January 10, 2024

Silent depression?

I came across an article recently called "Lessons from the Great Depression" that recapped a memoir of that decade. This sent me down a links-leading-to-links rabbit hole about other wisdom from the 1930s. I thought it might be worthwhile examining and consolidating these stories, especially since so many economists and other experts are predicting something similarly catastrophic for America (and the world) in the upcoming year.

My parents were born in the middle of the Great Depression: My mother in 1931, my father in 1935. Mom was born in poverty in the bayous of Louisiana; Dad was born to working-class immigrant parents in Buffalo, New York. Both bear mental scars from that decade of their youth because of how their parents and neighbors coped with the hardships.

While people are stating unequivocally that currently we're not in a depression (largely on the basis that the stock market hasn't crashed in a suitably dramatic fashion), others claim we're already in a "silent depression."

This hit home after watching a short video comparing the costs of homes, rent, and income between 1930 and 2023.

"You're in a Silent Depression," says a man calling himself Wall Street Silver (Freddie Smith, a realtor based in Orlando). "When you compare the Great Depression to today, this is absolutely going to blow your mind. In 1930 during the Great Depression, the average home in America was $3,900. The average car was $600. The average monthly rent was $18, or $216 a year, and the average salary was $1,300 a year. Fast forward to today. It is $436,000 for the average home, $48,000 for the average car, and the average rent is $2,000 a month or $24,000 a year, and we have a $56,000 income for the average American right now.

"So if you look back to the Great Depression, the house was only three times the average salary. Now it is eight times the average salary. The car was 46% of the salary. The car today is 85% of the salary. And here's the craziest part. The rent was 16% of the average salary. It is now 42% of the average salary."

And of course, there's the issue of unemployment. During the Great Depression, unemployment famously reached 25 percent. Now? Well, it depends on what sources you consult. Shadowstats (which uses the original metrics that were used to calculate such things) reports a current unemployment rate of, well, 25 percent.

Additionally, a frightening 62 percent of Americans are living paycheck to paycheck (this being called "the main financial lifestyle among U.S. consumers") and 74% of Americans (understandably) say they are stressed about finances. Sadly, as one economist pointed out, "Because real wages have declined so much over the last three years, consumers have turned to debt to maintain their standard of living." Food pantries are struggling.

Tucker Carlson, in interviewing economist Stephanie Pomboy, noted people used to be suspicious of debt, but now the entire economy is based on that vice (rather than being built on real things, which are now outsourced overseas). But, though policymakers still have their blinders on regarding the dollar remaining the world's reserve currency, all that is changing ... and changing rapidly. Pomboy says, The demise of the U.S. hegemony is really upon us, and ... so many in Washington are just sleeping right through it as if it's not a reality."

As Ayn Rand so memorably put it, "You can ignore reality, but you can't ignore the consequences of ignoring reality."

If we are in a depression, it behooves us to learn from the last one. I've often wondered if people knew in 1928 what would happen in 1929, what could they have done to brace themselves? In light of the current situation, I think that question is just as pertinent today. What is the best way to brace for a looming or current economic depression?

To answer this, I drew advice from several pieces on the subject of "Lessons of the Great Depression" (here, here, and here) and plucked out some pertinent concepts. If nothing else, it strikes me that these pertain to current and future times as well.

• Diversify everything from investments to skills (generalists and jacks-of-all-trades thrived).

• Fewer bad things happen to those who are debt-free.

• Need less and waste less. Get lean.

• Multiple income streams are better than one solitary stream, no matter how large.

• Wean yourself off dependency wherever possible, everything from addictions to government aid.

• Tangible investments are often better than intangible investments. Livestock and gardens reproduce.

• Band together whenever possible (family, neighbors, church) to help each other out. There is strength in numbers.

• Belief in a Higher Power was a massively sustaining force for when people were at their lowest.

• "The situation at hand had the final say." People were forced to roll with the punches and adapt to their circumstances. No amount of anger, despair, or bargaining could change reality.

• Be generous. Personal circumstances can change in an instant.

• Always look for work. This doesn't (necessarily) mean you're working a second 40-hour-per-week job; but it does mean you're taking advantage of side gigs or odd jobs that come your way. Even unpaid "work" has its merits, as it teaches you skills, develops your reputation, and broadens your influence.

• The concept of "retirement" changed completely. People worked as long as they were able.

What other tips would you add?


  1. One thing I have noticed is that people think you put a seed in dirt and get food from it. It is a tad more complicated than that. Raising livestock is also something that is not as easy as some think. If they are planning on these things but can't work on them right now they need to read everything they can about it and understand that 50% of that won't fit their circumstances either. We thought we could be off grid once we got the solar in. Well no that didn't happen. Sure we use less than 300Kw/month but when you have winters like we do (about 50-100 west of you I think) where we have had limited sun for the last 2 weeks, well then you see the problem. People think solar will work for them and it does, as long as the sun shines or wind blows at the right speed if you are using wind power. Just a few things I have noticed changing though is the price of food going up every time I head to the store. Now sure I am I go. I had to restock the white vinegar and was at Winco and saw it was 3.46/gal, I thought wow let me check out Walmart first and went there and it was 3.76. So next time we were in the city, 2 weeks later I went back to Winco and now it was 3.89. I grabbed it anyway because it is a 220 mile round trip to the city and did not want it going up more when I went to check Walmart again. Then I got more at Walmart the next time I went there since there is one of them 44 miles round trip from home. You learn to stock up or do without a lot when the nearest store is a 44 mile round trip.

    1. Hah ! So you're the one to blame ! I went to Walmart yesterday looking for, among other things, vinegar ! The shelves were bare of gallon jugs and had few of the dinky little bottles !
      This was not a trip for much spending either because I had really just run out of cream for coffee, but to justify the expense and time for the trip, was looking to get next due to purchase items.
      Also not on hand was my brand of coffee. Fortunately I still have some .
      Frozen veggies were low. Very low.
      And dried beans were sparse. The two kinds I wanted weren't available, which were split peas, and red beans. Guess everyone is making chili, but I've had a craving for Louisiana red beans lately. So in the canned bean section, it was also hard hit. Fortunately, there were enough canned red beans to make a dish. But those cans were on the bottom at the back of the shelf.
      Some of this lack may be somewhat seasonal which has happened since co-vid. But the scarcity of beans makes me think people are using cheaper proteins more. And the vinegar hasn"t ever been this bare.

  2. I read a book put out by Reminisce Books called We had everything but Money. They consolidated letters written by older folks about their experiences from the depression. It seemed as if almost all of them remember the very first thing their mothers did was to plant a garden. Mothers also knew where to get berries so the kids could get them and they would can jams and sell them. The kids all went to do some kind of work, in other words everybody pitched in. Whereas the book is not that educational it does tell you what people did then. I know that right now I sell eggs to a few people and I never seem to have to look for customers they all want more. I price them right and don't try to gouge them. So my tip is, What can you do to make a few extra bucks, make a list and see where it takes you. A good side gig would be helping older non computer types fix their gizmo problems.

  3. My mother was born in 1921. Her father was killed before she was born. She grew up living with her grandmother on the homestead her great grandfather bought when he came over the Cumberland Pass. (I think that was it.) She talked to me in the kitchen when I grew up, telling me stories of her youth. I learned you can use the liquid inside egg shells as glue. She often did that when the stamp would not stick. There are a hundred things or more like that I learned from her. So, listen to people who were there or heard it like I did. Write it down. I do on my blog.
    I learned how to deal with weevils in flour. So many things.
    Practical Parsimony

  4. Wonderful article, Patrice. We all need to be aware and preparing for the hard (and harder) times that are barreling down on us. And my personal thank you for devoting your time and energy to keep this blog going for all of us out here trying to do our best to get prepared for whatever is to happen in the times to come. Knowledge takes away fear. I am so content living this homestead lifestyle, tho it's not easy. Again, I thank you. Blessings from east Kansas. Mama J

  5. Excellent post, Patrice.

    Learning how to be content with less and cultivating an appreciative attitude for what one does have are key, but not mentioned a lot. Your "Need less and waste less" sums it up nicely.

    I think maybe adding something about expectations would be good. Many folks seem to think we're going to experience a temporary blip, after which we'll all trade in our gold for the new currency and return to a "normal" consumer lifestyle (as it did after the Great Depression). I don't think we can count on that this time around.

  6. most live paychek to pay check by choice! I am done fellin bad for them after scimping and doing without fro years, we are in a better place than most, my 15 year old car might not be as good looking as my neighbors but gets me there and my husband to work everyday, no days off for covid or just because. Needs more and wants more now is this generation well said patrica!

  7. Thank you for the article, good commonsense advice. I cannot add anything useful, but remember that as Ayn Rand so memorably put it, "You can ignore reality, but you can't ignore the consequences of ignoring reality."

  8. EVERY YEAR, some conservative who doesn't understand thing about economics whines about a silent depression if there's a Democratic president. Literally no one can understand that while some things are more expensive today, most things are much less expensive. Consumer goods like appliances and cars, phone service, clothing, food, it goes on and on. Spare me, it's baloney.

    1. Oh Krab. We're all in this together.
      My exxxx...treeeme left leaning neighbor of color on one side is the most vocal about all of this. He is, as other neighbors say, bunkered in. He is armed for an army of bear and vocal about his big guns as well.
      I think he sees the handwriting on the wall and moved to a very conservative area partly as another layer of safety, including a safe place to raise his many children.
      UPS comes to his house every single day, and sometimes other delivery trucks as well. Gotta figure he's well stocked up.
      It's not about politics.
      Whatever is coming we will all experience together.
      And here's a chuckle. The neighbor says it's all going to get worse, and that remark was after I mentioned a $10 markup on a roll of plastic during covid.
      The democrats around here are all complaining about prices...our county is heavily democratic .
      I think you are the kind of person who is wise with money and that many of the barometers used probably don't apply to you. But they are real for young adults in the job market or looking for a home or car.
      I wish you well!

    2. You are so right. I'm so excited to see the cost of cars and food right now. Why is everyone complaining?

    3. For many years, it has not been about Democrat and Republican. The Uniparty is alive and well, not only in DC but throughout the country. As George Carlin said, speaking to us regular folks, “It’s a big club, and you ain’t in it!“

    4. Food is cheap. If you don't think so, you're nuts and just complaining to complain. In the 1930s, an average household spent 25% of its income on food. Today, it's about 17% which includes restaurant meals, which is a large portion of the cost. Why not educate yourself instead of just parroting rightwing claptrap?

    5. why do you feel the need to insult people who do not agree with you

    6. If Krab only spends 17% of his/her/it's income on food it is because he/her/it is living alone, has no spouse, no children, no friends.

  9. My parents married in 1933. So stories of the great depression were normal dinner time conversation. This is different. Our depression more or less began in the 1990's but was slow walked or kicked down the road by simply printing money. It is amazing what government money can do to push the crash into the future and cover up the damage during this time. Printing press money is a tax on productive people. Every year your money is worth less and eventually it will all crash and your money and assets will be worth next to nothing. But when is eventually? No way to know but when it hits the fan the depression will be worse than the great depression was. It will be deeper, affect more people, last longer and be very difficult to get past the effects of it. Again this is simply because of our national debt.
    There is a theory about the forth turning. The signs and indicators seem to support this theory. The effects are not pretty. Time will tell.

    But there is good news (sarcasm), it is likely there will be war, if not WW III than a multifront war that cannot be won by superior and smart weapons but will instead by fought in a very different way. Imagine the enemy being able to fire a $100 missile at your military that they fend off with a $400,000 missile from a multi-billion dollar weapons system. Then understand that the enemy will be able to manufacture 100's of 1000's of these missiles which will quickly deplete your defenses and reduce you to their level where it will be a war of attrition. That is the likely course of the next war. And once our defenses are dramatically reduced we will be solely dependent on nuclear weapons to defend ourselves. And there it is; Armageddon...

  10. "So if you look back to the Great Depression, the house was only three times the average salary. Now it is eight times the average salary. The car was 46% of the salary. The car today is 85% of the salary. And here's the craziest part. The rent was 16% of the average salary. It is now 42% of the average salary."
    Unfortunately, the baseline has become a 2 income household. From this perspective, ratios haven't changed that much. The house becomes 4X instead of 8X and 3X vs 4X can be explained by the average house size growing over the years. The car price becomes 43% of household income vs 46% in the past. Rent scales similarly, 42% becomes 21% vs 16% in the past. Pretty close considering size changes.

    1. But who is caring for the children and what are the long-term effects of this? (Crime, violence, drugs, school shootings, etc) The break-down of the nuclear family over the last 3 generations is one of reasons our society is crumbling.

    2. In the 1930s many people didn't own their own homes. They rented, they lived in apartments, they lived in boardinghouses, etc. Homeownership became expected after WWII. We're spoiled as hell and whiny about it.

  11. When I was in the mortgage business at the start of 1980 your qualifications for a loan was 28% of your gross salary for mtg. payment and 36% for your mtg + your debt. When I left in 2009 it was up to 40/50%. Those percentages are unsustainable and significantly contributed to foreclosures. And here we are again just 16 years later on the same path.

  12. One issue not mentioned is how today's Americans (and illegal immigrants) will react to the stress and actual logistics of a Great Depression II.

    I had an enlightening discussion with my grandfather in the late 1990s. He was a teen during the GD, living with his family in Alabama. He said his family was sustaining themselves mostly from their large garden, and would butcher a chicken or two on some Sundays.

    He said it got so bad that some government organization (he couldn't recall if it was federal, state or local) announced a food giveaway that mostly included rice, beans and butter the following week in town.

    Here's the interesting part: he said his mother had the entire family dress in their best church clothes, and when they arrived in the city most other people were dressed similar. But the main thing he noticed was how no one was talking to each other; people wouldn't make eye contact with each other and everyone seemed ashamed they were accepting free food from the government.

    My grandfather was chuckling as he asked me to compare that slice of American life with today: he pointed out people would probably not wait patiently in line, they would feel entitled to whatever the government was providing and would loudly complain it wasn't enough. He predicted there would be looting within the first couple hours as people would refuse to wait their turn.

    Frightening, isn't it?

    1. On Matt Walsh's podcast yesterday he played a clip of a woman on welfare complaining about how the illegal immigrants are getting to the mobile food pantry distribution points long before the stated time and taking the food that her community relies upon. There are, of course, layers of problems with that whole scenario but my question is, "How do these illegal immigrants know where the mobile food pantry trucks are going to be and when?"

      These foolish open borders policies, I think, are designed to swamp the system and, ultimately, destroy the U.S. as we knew it.

    2. this is not meant to be a political blog

  13. In Is:54 we are promised that no weapon formed against us shall prosper.
    But we have to exercise our faith, and to adequately do that we have to have the Word of God ensconced in our hearts so that it rises up from within when we hear the fake news and assures us that God knows the plans He has for each of us...His thoughts toward us are for peace and hope for a future (Jer:29 11-13).
    Faith comes byhearing and hearing by the Word of God. (Rom 10:17)
    Fear comes by listening to the news.
    I could go on and on.
    Hosea 4:6 says My people are destroyed for lack of knowledge.
    Commitment to the Lord is a good thing and has itsbenefits.
    Going to church is good and also has benefits including some learning, and certainly fellowship.
    But if you really want to go forth gird in strength no matter what your age or educational level, you must learn the Word. Commit it to memory.
    I would suggest getting some index cards and in your times of Bible reading, the scriptures that stand out and give you understanding or strength, write them down and commit them to memory. Make it a habit.

    Trials and troubles will come. I don't think we're in a silent depression so much as having a world system that wants to streamline it all, which is largely interconnected already, into one system and centralized leadership for that system.
    Many of us , myself included ,want to go on living our lives as we please even though many things we use are from all over the world, whether food or lithium batteries, or now, possibly, canning lids. I honestly don't know who is making ball lids anymore but they aren't what they used to be.

    There are wars going on, but the biggest war we are in and feel the constant effects from is spiritual.
    So my tip for past, present, and future, is to get in the Word. Hide it in your heart. It can guide you through the conflicts that come and no one can steal it from you. It is wealth beyond measure.
    Our Lord owns the cattle on a thousand hills. Surely He is going to provide for us.

  14. I volunteer for a food pantry in Utah, and monthly the number of those with food insecurity increase. This is families where usually at least one parent works a fulltime job and many times both parents work. The need is great. I was raised on an island in Alaska, where in the 1950's, where if there was a longshoreman strike in Seattle, there was no weekly Alaska Steamship boat with goods for the grocery store. So I grew up in a home where we always had several months or more of food on hand. I know everyone can't do this, but if your able add an extra can or two to your weekly grocery trip. Also talk to your grandparents and others who have lived thru hard times, they know all the ways to save money and make the most of what they have. We "older folks" will become quite popular as things get worse, because we know "things" and how to do them, like stretching our meals, making low cost meals, growing a garden. I now live in a 55 plus community and at 81, I still grow a container garden on my patio. You are right on with all your comments of things to do. Thank you for posting this very relevant post.