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What does depression look like?
added Fri December 12 2008 at 7:33 PM

Recession. Economic downturn.

Hard times.

We call it a different name because nobody wants to think of it as a depression - that's such a depressing word. It's been all over the news for months now - how the economy is going downhill and it's only going to be getting worse before it gets better. Pessimists say that it's about as bad as the Great Depression. But that doesn't really mean much to me, since I wasn't alive then.

I've read Grapes of Wrath, but it doesn't look like that. In that book, it seemed like everybody was barely getting by - deprevation, starvation, death were everywhere. But the people here don't really look any different from what I remember a year ago. There don't seem to be any more beggars on the street. I don't see any reduction in the number of teens chatting on cell phones or sporting cool new shoes. I do know a few people who have lost their jobs, but even they seem to doing okay so far - one of them seems to even prefer being on unemployment.

Maybe people are still pretending. I've heard stories about how during the depression, the men would still dress up in their suitcoats and leave their houses in the morning so that the neighbors didn't know they were out of work. Maybe people are doing that now.

But so far (knock on wood), the economic troubles may have done me more good than harm. Housing prices are falling to something a little bit more reasonable so that I can consider buying a house. Gas prices came back down. I've lost some money (well, a lot of money by my normal standards) in my retirement savings accounts, but I've only been investing in those for 18 months now, so it's not like I am dependent on their value. As stock prices continue to fall, I'm presented with an opportunity to buy them cheap. Probably the biggest negative impact is simply that I'm afraid to use my Roth IRA toward the down payment on a house because I'd have to sell low.

I'll admit that I'm somewhat scared that if it keeps going too long my job might be in jeopardy. I do, after all, work in retail. But I can't live my entire life in fear of the unknown. And I feel that my company has positioned itself such that it can be seen as a lower-cost alternative than most retailers. As times get harder, price sensitivity is going to increase and perhaps the two will balance each other out. As long as we can stay afloat, if we can weather this storm we'll have even more competitive advantage in the future. And I think that's the way it is for me, too.


stephen says:
it's funny, i was reading a a divisive site one day on this very subject. we feel bad for those in bad situations (or in our case, a bunch of stupid people living outside of their means, helping selfish capitalist scum live better than everyone else) but we forget about the people who are able to get into homes. anyhow, it's just a cited article, and it's a good read.

i just hope it doesn't get as bad as people project it to get. it was scary enough getting myself into hundreds of thousands of dollars into debt, let alone now having to live paying it off in these conditions.

have you seen the price of gas? it's outrageous!

and i found 5 USD
posted Sat December 13 2008 at 2:15 AM

Will says:
I hear ya. We watch housing prices drop every week. They're almost down to what they should have never reached in the first place. The double edged sword here is that the rental prices are projected to rise due to all the forclosures.

I had the same problem with investments, so I just stopped contributing for a while. I figure the lowest it can go is 0, right :).
posted Sat December 13 2008 at 8:53 AM

Merry says:
I wish that more than gas prices were falling. I don't have a car, and so the gas prices don't affect my personal finances at all. I'm still paying for groceries at high prices, and I'm still anxious about the possibility of losing my job. I don't think that it's VERY likely, but it's a possibility. I'd say we ARE living in a depression. It took a while for it to reach me personally, and it hasn't hit me really hard, but that doesn't make it less real.
posted Sat December 13 2008 at 11:48 AM


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