The Boston Globe: Depression 2009: What would it look like?

[TroyPDX]

Re: The Boston Globe: Depression 2009: What would it look like?

Alright, I hate to keep harping on this article, but another thing about it really bothered me that I want to throw out there. He consistently makes an error in logic that if we were to go into a prolonged depression, that things would be much as they are now, just with more people unemployed and therefore obviously have less money.

For example, he talks about that due to the industrialization of agriculture and cheap food from overseas, that food wouldn't be a problem like it was in the 1930's. I beg to differ. If things did become dire, the complex system of the industrial and international nature of food production could fall like a house of cards. So many things have to go right on so many levels to keep those shelves at your local supermarket stocked with the 'mac and cheese' he speaks of. So much of our food, even food grown or raised here in the States, is shipped across vast distances and relies on an economic infrastructure that might not be as resilient as we once believed. In the 30's, most of the food you ate was grown relatively close to where you lived and by small, family run farms.

Specialization has become the norm due to all these factors. Here in Oregon the Willamette Valley is incredibly fertile, but much of the farmland has been converted to grass seed which is exported all over the world. Of course it could all be converted to food crops but how long would that take?

My point is that the author of the article has extrapolated current conditions into a possible future, and has completely ignored the likelihood that current conditions might be affected by the same economic factors that also would cause massive unemployment. It is lazy journalism taken to it's ridiculous extremes.
T

[flintlock]

Re: The Boston Globe: Depression 2009: What would it look like?

I don't think they'll be any food shortages. We have a lot better knowledge of how to grow food in greater quantities now than in the 30s. That knowledge will not simply disappear. What we will have is a lack of ability to pay for it. So I agree with the comment that the state will step in and dole out the basics to people. Only they'll do their typical horrible job of it, so it will be very inefficient and expensive. The real losers will be the savers in our society, who'll see their net worth go up in smoke as inflation increases.

The real ugliness will start when people are forced to give up things previously thought of as necessities, like cars, tvs, dinner out every friday night, etc. Westerners are so soft these days, even a upper class lifestyle in the 1930s would seem tough to them today. The most pissed off group, the ones who'll be most likely to act up, will be those who just miss the cut for the handouts, the so called middle class.

[Quincy K]

Re: The Boston Globe: Depression 2009: What would it look like?

[quote=TroyPDX;61945]This article was so monumentally awful it actually prompted me to write my first posting...

Yes, my first post as well. This idiot actually favors urban city life as opposed to the suburbs during this inevitable 10 percent+ unemployment period. Dumbsh_t. I remember the 1990's SoCal recession quite vividly and the "heat" that was being generated on the street as I ran a business in some less than desireable areas. The Rodney King episode was an exuse for a Civil Unrest episode. This Harvard moron is the kind of guy that is going to try and rationalize with an armed, desperate and doped-up convict demanding his wallet all the while believing that his superior intellect will prevail right up to the point he is shot.

Highly-populated, economically and racially-challenged urban areas are about to become very violent.

[c1ue]

Re: The Boston Globe: Depression 2009: What would it look like?

There isn't going to be starvation in the US unless we get hyperinflation.

Even hyperinflation itself might not have done it, but the retail sector compression + hyperinflation is the straw that will break the camel's back.

Think about it: where before you had a large number of small local stores, now there are many fewer but large ones.

If 1/3 or more of these large store chains fail, where would you buy food from?

We're talking epicenters; previously there were many small interlocking circles of supply from the local stores. Now we have very few large and only somewhat interlocking circles of supply from mega-stores.

What happens when some of these circles disappear?

[we_are_toast]

Re: The Boston Globe: Depression 2009: What would it look like?

There isn't going to be starvation in the US unless we get hyperinflation.

Even hyperinflation itself might not have done it, but the retail sector compression + hyperinflation is the straw that will break the camel's back.

Think about it: where before you had a large number of small local stores, now there are many fewer but large ones.

If 1/3 or more of these large store chains fail, where would you buy food from?

We're talking epicenters; previously there were many small interlocking circles of supply from the local stores. Now we have very few large and only somewhat interlocking circles of supply from mega-stores.

What happens when some of these circles disappear?

I think a 3rd world example might be applicable for food.

Go to any large 3rd world city and the streets are a giant marketplace with unemployed people on every corner pushing carts full of food and small items for sale. For the life of me I don't know how the distribution network works, but it happens. You can pretty much get much of the food you want.

Keep in mind America truly is the breadbasket of the world. The rest of the world needs the food we grow as much as we do. Large corporate farms may go belly up and be broken down to small family farms, and the corn fields that grow animal food may instead grow human food. Farmers markets would spring up in small and medium size towns and cities. Large green Kentucky blue grass lawns would be converted to gardens for food and income. Farmers would sell directly to consumers. There would be less variation in food choice as more food is grown locally and availability would depend on the season.

Let me see; Corporate farms going back to family farms, farmers selling directly to consumers, consumers eating fresh food grown locally, more profit for farmers, better nutrition for consumers, and the problem is?

[grizam303]

Re: The Boston Globe: Depression 2009: What would it look like?

Let me see; Corporate farms going back to family farms, farmers selling directly to consumers, consumers eating fresh food grown locally, more profit for farmers, better nutrition for consumers, and the problem is?

I'd say the difficult part is going to be the transition. I believe that this situation is going to get a lot worse before it gets any better, but that if we do it right, we can come out a better society.

In the short term, I'd expect nearly everywhere to start looking like ghettos in our modern towns. Life's not going to change much for those people, but middle class life might start looking like that in a few years. If this author expects despondent, hungry people to sit at home and watch tv, then he should observe that same behavior in impoverished inner-city communities today.

[ASH]

Re: The Boston Globe: Depression 2009: What would it look like?

The only question I would have would be to what degree and for what length of time could the government conceivably institute such measures? Obviously we would go even further into deficit spending, but at what point does the printing of more money make it meaningless, ala Germany in the 30's? And I don't believe we have a great deal of financial clout left with our neighbors in the world, so I doubt we could finance such a program with more international debt...once burned twice shy, not to mention they may have problems of their own to deal with.

I was envisioning the measures the government might resort to after deficit spending is no longer an option. At first, so long as the present system functions, then yes -- the government borrows money to fund its deficit spending, which would probably include expanded housing, heating assistance, and nutrition programs in the event of massive unemployment. If the government's credit ceases to be good, the US dollar also ceases to be good -- particularly outside our borders, where the government's fiat does not extend. Now the government has a problem: how does it continue to provide the food, shelter, and energy required to hold the high-unemployment society together? I think energy is the crux, because if the government can get its hands on enough oil, it can certainly feed, house, and heat its population by taking control of the physical capital within the country and the distribution of its output on an emergency basis. The problem is that energy is one input over which we don't have adequate control, since a lot of what we use comes from overseas; if we can no longer exchange dollars or IOUs for oil, then a lot less will be available. That isn't to say that we'd lose all access to foreign oil, just that we'd have to equalize trade, and so we'd get a lot less of it. Still, in this situation, I'm certain that we'd have access to more than enough oil to keep industrialized agriculture, heating, and transportation of foodstuffs going. As with a war effort, it would simply be the case that the government would get first dibs on the limited resource to use for critical purposes, and the remainder -- insufficient to maintain our present standard of living -- would be rationed. So, in an energy-starved USA, there'd be a lot less personal travel and the cost of everything would be sky-high, but we'd still be eating the products of industrialized agriculture and living in heated homes. At least, that's my prediction for a very bad unemployment scenario and a wrecked currency. Note, by the way, that this scenario implies the widespread seizure of private property for public purposes, and somewhat limited uses for saved private wealth (because the purpose of rationing is to make sure everyone gets a bit of a scarce commodity, rather than the wealthy getting all of it)... not a good scenario for the well-to-do. The only thing I can think of is that if you put your wealth into something productive that you can enjoy, but which is too minor for the authorities to bother appropriating, then you might come out okay. Here I'm thinking that owning a comfortable, energy-efficient house on a large plot of land that lends itself to small-scale farming would be about right. I really hope it doesn't come to even this.

[c1ue]

Re: The Boston Globe: Depression 2009: What would it look like?

Let me see; Corporate farms going back to family farms, farmers selling directly to consumers, consumers eating fresh food grown locally, more profit for farmers, better nutrition for consumers, and the problem is?

Griz,

So you really think the large corporate farms are going to have a harder time getting financing than the family farms?

The entire reason why the corporate farms were able to get so big was because of their financing economy of scale advantage.

While I do see family farm numbers increasing - I also see these family farms producing very little surplus available to feed anyone not of 'the family'.

In the meantime the corporate farms will in time duly line up to the Fed/Treasury financiing trough.

The idea of hard times somehow helping the little guy is very much an American Libertarian fantasy.

[grizam303]

Re: The Boston Globe: Depression 2009: What would it look like?

Griz,

So you really think the large corporate farms are going to have a harder time getting financing than the family farms?

Someone else wrote the section you attributed to me, however I'll put my input in on farms.

I've heard anecdotal instances of individual farmers having incredibly hard times finding financing. This is a huge red flag to me, and I can't see how it's being ignored in the mainstream media.

I don't think it will matter what farms get the money, though I do think corporate farms will have an easier time getting financing. Either way, there's going to be a drop in crop yields. After hearing all the problems with small farmers not being able to get financing, I would be astounded if they didn't drop. Granted all crops are not used for food, but how much of a hit can the agriculture industry take before we start seeing food shortages? As someone posted in another thread, our logistics are managed by just-in-time systems; if the supply chain stops, it's going to stop FAST.

[we_are_toast]

Re: The Boston Globe: Depression 2009: What would it look like?

Griz,

So you really think the large corporate farms are going to have a harder time getting financing than the family farms?

The entire reason why the corporate farms were able to get so big was because of their financing economy of scale advantage.

While I do see family farm numbers increasing - I also see these family farms producing very little surplus available to feed anyone not of 'the family'.

In the meantime the corporate farms will in time duly line up to the Fed/Treasury financiing trough.

The idea of hard times somehow helping the little guy is very much an American Libertarian fantasy.

c1ue:
That was my quote about corporate and family farms.

The economy of scale in corporate agriculture is due to the cheap availability of energy, and not just any energy, but OIL. Fertilizers, herbicides, pesticides, and the energy to till huge genetically modified monocrops with very little manpower, are all a product of cheap oil. When the cheap oil is gone, or simply no longer available, I believe agriculture will revert back to smaller farms producing a variety of crops using something similar to organic farming techniques. Growing a variety of crops using rotation techniques to maintain soil fertility and pest and weed control will become more economically viable than corporate farms trying to run on very expensive oil.

Yields will go down and prices will go up, but the green revolution was dependent on cheap oil, and without it we go back to what worked for the last 40,000 years, with a little help from some alternative fuels like methane, ethanol, solar and wind.

No ones ever, ever, called me libertarian before.