The Great Depression conjers up images of apple peddlers and Dust Bowl refugees. But should another depression befall us, says Drake Bennett in The Boston Globe, the victims will be far less visible.
Over the past few months, Americans have been hearing the word “depression” with alarming regularity. The financial crisis tearing through Wall Street is routinely described as the worst since the Great Depression, and the recession into which we are sinking looks deep enough, financial commentators warn, that a few poor policy decisions could put us in a depression of our own.
It’s a frightening possibility, but also in many ways an abstraction. Most of us, of course, think we know what a depression looks like. Open a history book and the images will be familiar: mobs at banks and lines at soup kitchens, stockbrokers in suits selling apples on the street, families piled with all their belongings into jalopies. But we are separated from the 1930s by decades of profound economic, technological, and political change. A modern landscape of scarcity would reflect that. Whatever a 21st-century depression would look like, it won’t look like 1932.
What, then, would we see instead?
Surprisingly, we probably won’t even know that a depression has started if it does. There is, in fact, no agreed-upon definition of what a depression is. The National Bureau of Economic Research has a precise way to gauge when a downturn qualifies as a “recession,” but the bureau pointedly declines to provide similar criteria for the term “depression.”
Most economists would agree, though, that a depression—to be worthy of the name—needs to be more than a few years long, and needs to put a lot of people out of work. At the height of the Great Depression, fully one in four American workers was out of a job.
Today, a great swelling in the ranks of the unemployed would likely change the landscape of the country much as the Great Depression did. In the 1930s, waves of displaced tenant farmers washed into California, for instance. But there was also another, subtler effect on housing too: It froze the movement of the middle class. The suburbanization that was to define the post–World War II years had in fact started in the 1920s, only to be brought sharply to a halt when the economy collapsed. A modern depression would again trap in place many people who would prefer to move.
Today, a depression could even reverse the long rise of the suburbs. In a deep and sustained downturn, home prices would likely sink further and not rise, dimming the appeal of homeownership, a large part of suburbia’s draw. Renting an apartment—perhaps in a city, where commuting costs are lower—might be more tempting. And although city crime might increase, the sense of safety that attracted city dwellers to the suburbs might suffer, too, in a downturn. Many suburban areas have already seen upticks in crime in recent years, which would only get worse as tax-poor towns spent less money on policing and public services. At best, many suburban neighborhoods would be left checkerboarded, with abandoned houses next to overcrowded ones.
The migrations kicked off by a depression wouldn’t be in one direction, though. There’d be a tangle of demographic crosscurrents: young families moving back to their hometowns to live with the grandparents when they can no longer afford to live on their own, parents moving in with their adult children when their postretirement fixed incomes can no longer support them. Some parts of the country, especially the Rust Belt, could see a wholesale depopulation as the last remnants of the American heavy-manufacturing base die out.
“There will be some cities like Detroit that in a real depression could just become ghost towns,” says Jeffrey Frankel, a Harvard economist who does not, he emphasizes, think an imminent depression is likely.
At the household level, the look of want would be different today than it was during the last prolonged downturn. The government helps the unemployed and the poor with programs that didn’t exist when the Great Depression hit—unemployment insurance, Medicaid, food stamps, Social Security for seniors. Beyond that, two of the basics of existence—food and clothing—are a lot cheaper today, thanks to industrial agriculture and overseas labor. The average middle-class man in the late 1920s, according to the writer and cultural critic Virginia Postrel, could afford just six outfits, and his wife nine—by comparison, the average woman today has seven pairs of jeans alone. So we’re less likely to see one of the iconic images of the Great Depression: formerly middle-class workers in threadbare clothes lining up for free food.
If we look closely, however, 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. Lean times might kill off much of the taboo around buying hand-me-downs, and with modern distribution networks—and a push from the reduce-reuse-recycle mind-set of environmentalism—we might see the development of nationwide used-clothing chains.
In general, novelty would lose some of its luster. It’s not simply that we’d buy less; we’d look for different qualities in what we buy. New technology would grow less seductive, basic reliability more important. We’d see more products like the Panasonic Toughbook laptop, which trades on its sturdiness, and fewer like the iPhone—beautiful, cleverly designed, but not known for durability. The neighborhood appliance shop could reappear in a new form—unlicensed, with hacked cellphones and rebuilt computers.
And while very few would starve, a depression would change how we eat. Food costs, though low by 1930s standards, have been rising in recent years, and many people already on the edge of poverty would be unable to feed themselves on their own in a harsh economic climate—soup kitchens are already seeing an uptick in attendance. At the high end of the market, specialty and organic foods—which drove the success of chains like Whole Foods—would seem pointlessly expensive; the booming organic food movement could suffer as people start to see specially grown produce as more of a luxury than a moral choice.
According to Marion Nestle, a food and public health professor at New York University, people low on cash may well try their hands at growing and even raising more of their own food, if they have any way of doing so. Among the green lawns of suburbia, kitchen gardens would spring up. And it might go well beyond just growing your own tomatoes: Early last month, the English bookstore chain Waterstone’s reported a 200 percent increase in the sales of books on keeping chickens.
At the same time, the cheapest option for many is decidedly less rustic: meals like packaged macaroni and cheese and drive-through fast food. And we’re likely to see a move in that direction, as well, toward cheaper, easier calories. If so, lean times could have the odd effect of making the population fatter, as more Americans eat like today’s poor.
To understand where a depression would hit hardest, however, look at the biggest-ticket items in people’s budgets.
Besides housing, three items—health insurance, transportation, and child care—are the top expenses for American families, according to Elizabeth Warren, a bankruptcy law specialist at Harvard Law School; along with taxes, those categories and housing soak up two-thirds of income, on average. And when those are squeezed, that could mean everything from more crowded subways to long lines outside hospital emergency rooms to a proliferation of unlicensed day-care centers.
Health insurance premiums have risen to onerous levels in recent years, and in a long period of unemployment, many people would find them unmanageable. Dropping health insurance would be an immediate way for families to save hundreds of dollars per month, but people without health insurance tend to get much of their health care through emergency rooms.
That would mean a growing financial drain on hospitals already struggling to pay for the care they give uninsured people. And if, as is likely, this coincided with cuts in money for hospitals coming from cash-strapped state and local governments, there’s a very real possibility that many hospitals would have to close. In their place people might rely more on federally funded health centers or the growing number of drugstore clinics, like the MinuteClinics in many CVS branches, for vaccines, physicals, and other basic medical care.
The biggest reason a modern depression wouldn’t look like the last one, though, is because it wouldn’t look like much at all. As Warren wrote in an e-mail, “The New Depression would be largely invisible because people would experience loss privately, not publicly.”
In the public imagination, the Depression was a galvanizing time, the crucible in which the Greatest Generation came of age and came together. That is, at best, only partly true. Harvard political scientist Robert Putnam has found that, for many, the Depression was isolating: Kiwanis clubs, PTAs, and other social groups lost around half their members from 1930 to 1935. And other studies on economic hardship suggest that it tends to sap people’s civic engagement, often permanently. “When people become unemployed in the Great Depression, they hunker down, they pull in from everybody.” Putnam says.
That effect, Putnam believes, would only be more pronounced today. The Depression was, famously, a boom time for movies—people flocked to cheap double features to escape the dreariness of their everyday poverty. Today, however, movies are no longer cheap. Nor is a day at the ballpark.
With the diminishing price of televisions and the proliferation of channels, it’s getting easier and easier to kill time alone, and free time is one thing a 21st-century depression would create in abundance. Instead of dusty farm families, the icon of a modern-day depression might be something as subtle as 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.
Much of a modern depression, in fact, would unfold in the domestic sphere: people driving less, shopping less, and eating in their houses more. Unemployed parents would watch over their own kids instead of taking them to day care. With online banking, it would even be possible to have a bank run in which no one leaves the comfort of their home.
In precarious times, hunkering down can become not simply a defense mechanism, but a worldview. Grant McCracken, an anthropologist who studies consumer behavior, calls this distinction “surging” vs. “dwelling”—the difference, as he wrote recently, between believing that the world “teems with new features, new things, new opportunities, new excitement” and thinking that life’s pleasures come from counting one’s blessings and appreciating and holding onto what one already has. Economic uncertainty, he argues, drives us toward the latter.
As a nation, we have grown very accustomed to the momentum that surging imparts. And while a depression remains far from inevitable, it’s as close as it has been in a lifetime. We might want to get a sense for what dwelling feels like.
From a longer story originally published by The Boston Globe. Used with permission. All rights reserved.