Is this really the worst economy since the Great Depression?
We’ve heard that phrase endlessly in recent months, but it’s idiotic just to put today’s economy in the same sentence as the Great Depression. Unemployment hit 25 percent in the depression, the stock market lost 90 percent of its value and the gross domestic product fell by one-third. We’re nowhere near those numbers. You couldn’t drive a Model A from those numbers to today’s.
OK, OK. The phrase is this is the worst economy since the Great Depression. But even that’s hard to swallow.
I can’t help but remember years ago when my aunt died and her property was put up for sale. I wanted to buy it – keep it in the family and all. The price was fine, but I decided I couldn’t buy it for one reason: Mortgage interest rates were 18 percent.
When I broke the news to the real estate agent, he said he was disappointed but not surprised. He said he hadn’t made a sale in months. I asked what it would take for his business to pick up, and he declared, “When interest rates get below 12 percent, the floodgates will open.” (Can you imagine longing for 12 percent mortgage rates?)
That was in the fall of 1981, and the poor guy had a bit of a wait. Mortgage rates didn’t fall below 12 percent until late 1985. By the way, mortgage rates in Los Angeles last week were about 5.5 percent.
Ahh, yes, the early ’80s. The prime rate got over 20 percent. Unemployment hit 11 percent in California. Gasoline was frightfully expensive.
Gasoline? Wait. Let’s go back a little further. Does anybody remember the 1970s?
If you do, you may recall that we didn’t have much gasoline at all in the ’70s. In 1973, we got waylaid by the Arab Oil Embargo. Then we got whacked by a similar oil crisis in 1979.
I remember a time when we frantically drove around hoping to find an open station; many were closed because they had run out of gas. The few that were open would sell only 10 gallons per customer. My car back then, along with most others, got about 12 miles per gallon. Ten gallons would get me 120 miles; enough for about three days. Well, maybe one day, considering all the driving I did looking for an open station.
When you found an open station, you faced a two-block-long line. Sometimes the stations ran out of gas while you were in line. Fistfights broke out. Some stations had to have cops.
And inflation. It was 11 percent in 1974 and 1979, but high every year. I kept imagining inflation was a feral horse because everyone described it as “runaway” and “galloping.”
Jobs were scarce. Unemployment was high. The U.S. embassy in Iran was overrun, the diplomats held hostage for 444 days and the U.S. government was too feckless to accomplish anything.
To me, the 1970s were the darkest times. Even the early ’80s felt worse than these times.
Don’t get me wrong. This is definitely a rough patch today. Many people are truly hurting. Maybe, God forbid, this will worsen and become the worst recession since the depression.
But we’re not there. Not yet.