Modern Depressions

To make you extra thankful today, an excellent summary of what a depression today would look like:

The lines wouldn’t be outside soup kitchens but at emergency rooms, and rather than itinerant farmers we could see waves of laid-off office workers leaving homes to foreclosure and heading for areas of the country where there’s more work – or just a relative with a free room over the garage.  Already hollowed-out manufacturing cities could be all but deserted, and suburban neighborhoods left checkerboarded, with abandoned houses next to overcrowded ones. … The flickering glow of millions of televisions glimpsed through living room windows, as the nation’s unemployed sit at home filling their days with the cheapest form of distraction available. …

Home prices would likely sink further … Renting an apartment – perhaps in a city, where commuting costs are lower – might be more tempting. … the sense of safety … [in] the suburbs might suffer … young families moving back to their hometowns to live with the grandparents … parents moving in with their adult children. … The Rust Belt could see a wholesale depopulation as the last remnants of the American heavy-manufacturing base die out. …  We might see more former lawyers wearing knockoffs, doing their back-to-school shopping at Target or Wal-Mart rather than Banana Republic and Abercrombie & Fitch. … We might see the development of nationwide used-clothing chains. … New technology would grow less seductive, basic reliability more important. … The neighborhood appliance shop could reappear in a new form – unlicensed, with hacked cellphones and rebuilt computers. …

Few would starve … Specialty and organic foods – which drove the success of chains like Whole Foods – would seem pointlessly expensive; … New England’s surviving farmers would be particularly hard-hit … People … will cook more rather than go out. … Among the green lawns of suburbia, kitchen gardens would spring up. … The cheapest option for many is … meals like packaged macaroni and cheese and drive-through fast food. … Everything from more crowded subways to a proliferation of cheap, unlicensed day-care centers. …

Dropping health insurance … skip routine dental and medical checkups … get their healthcare through hospital emergency rooms. … even longer waits at ERs, … many hospitals would have to close, … growing number of drugstore clinics, like the MinuteClinics in CVS branches, … [Instead of private], opt for public universities … for community colleges, and students unable to afford community college wouldn’t go at all. … admissions standards would drop … an uptick in applications and interest is government work: Its relative stability, combined with a suspicion of free-market ideology that would accompany a truly disastrous downturn, could attract more people …

For many, the Depression was isolating: Kiwanis clubs, PTAs, and other social groups lost around half their members from 1930 to 1935. … Economic hardship … tends to sap people’s civic engagement, often permanently. … Depression, unsurprisingly, is higher in economically distressed households; so is domestic violence. Suicide rates go up in tough times, marriage rates and birthrates go down. And while divorce rates usually rise in recessions, they dropped during the Great Depression, in part because unhappy couples found they simply couldn’t afford separation.

Hat tip to Tyler

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  • Ian C.

    What an awful, bleak picture. I am no economist, but every economic downturn I have seen has been gotten out of the same way, by lowering taxes and deregulating business. It’s no mystery.

  • Tyrrell McAllister

    Is it really possible to describe how we got out of the original Great Depression with such a narrative? I thought that the recovery was generally attributed to the massive government spending and regulation of industry brought on by WWII.

  • burger flipper

    So we’d get that 50% cut in medicine, Whole Foods and Forever 21 would go belly up, and we’d stash Grampa on the hide-a-bed instead of the retirement home?

    Doesn’t sound so bad to me. Guess I’ll have to dig in to Global Catastrophic Risk, which finally came into the library, to get my gloom and doom on.

  • Robin Hanson

    burger, yes, it is good to be in a rich society.

    Ian and Tyrrell, Marginal Revolution has had lots of posts lately on causes of entry and exit for the Great Depression.

  • John Maxwell

    >We might see more former lawyers wearing knockoffs, doing their back-to-school shopping at Target or Wal-Mart rather than Banana Republic and Abercrombie & Fitch

    Gee, sounds awful.

    Also, I give you my official permission to delete sentences from a document without replacing them with ellipses.

  • Tyrrell McAllister

    Thanks, Robin. Would you say that there’s anything like a mainstream consensus view among experts on how we got out of the Great Depression? Or are we non-experts in the position of having to contradict a significant number of experts if we want to give more credence to any one view?

  • Phil Goetz

    I thought that the recovery was generally attributed to the massive government spending and regulation of industry brought on by WWII.

    Sure, America was brought out of the depression by massive government spending… by Britain.

  • Hal Finney

    It may be that this picture of an upcoming Depression_2 will be right in many ways, but that doesn’t mean it is how things will be perceived. The media seems to be determined to present the economic slowdown using the narratives of the past. I can hardly open a paper these days without finding a story about a food bank running out, or a free meal offer being overrun with former members of the middle class. Maybe it’s something of an artifact of the holidays, but if we think of these reports as the “first draft of history” then maybe this slowdown will be perceived not so differently from the Great Depression, if things gets bad enough.