In a marvelous and thought-provoking essay, Drake Bennett speculates:
By looking at what we know about how society and commerce would slow down, and how people respond, it’s possible to envision what we might face. Unlike the 1930s, when food and clothing were far more expensive, today we spend much of our money on healthcare, child care, and education, and we’d see uncomfortable changes in those parts of our lives. 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.
And above all, a depression circa 2009 might be a less visible and more isolating experience. 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.
Any other thoughts our there on what a depression of the 2010s might look like?
December 5th, 2008 at 11:36 am
In the 1930’s a much larger part of the population was rural and agricultural. If a family didn’t lose the farm to the bank they could grow their own food and make clothes. Today most of the country is urban or suburban and dependent on grocery stores. I wouldn’t be too sure about not seeing soup kitchen lines. Maybe a lot of those suburban lawns would become vegetable gardens, and backyards would have chicken coops.
Those abandoned suburban houses might have squatters, perhaps even their former owners.
Regions like the Pacific Northwest which are already fast growing could be “areas of the country where there’s more work” and be flooded with “laid off office workers.” Regions like the Southwest that are natural desert and have been overpopulated because of air conditioning could lose population if energy become unaffordable. Already scarce water could become a major factor in where people live.
December 5th, 2008 at 1:12 pm
A severe recession in the 2010s could accelerate a generational change in terms of who leads society and the economy. While many older gen x and younger boomers sit in front of their TVs, younger people will be using social media. Computers, cell phones etc. are ubiquitous already and won’t be going away.
Rather than “veg” in front of a TV, they’ll be using facebook, IM, twitter and technologies that they’ll invent. They’ll be generating ideas and creating things that will often become income earning in some way, whether through getting them noticed for a job, or creating their own businesses.
As many have noted, Bill Gates and Steve Jobs created their iconic companies during the recession of the mid 1980s.
December 5th, 2008 at 3:07 pm
Wendy, just wondering, which of the technologies you cite earn income? Facebook? IM? Twitter?
The “younger generation” already ruined the music biz with its unwillingness to pay for music. I just don’t see any legitimate businesses built in, say, the last 10 years. By legitimate, I mean ones that actually earn more in revenue than they cost to build and operate.
I laugh at all these businesses that are based on selling advertising. Advertising for what? All the new “businesses” give away their product! And a good chunk of the population demands free services. If they don’t get it, they steal it.
Despite the credit crunch, the new reality is no different than the old reality. There’s a lot of money out there chasing a good return on investment. There is not a lot of good, investable ideas out there. That’s the root cause of the economic crisis: money chasing returns, and an unsustainable decline in risk premiums.
FYI, Apple was built in the ’70s. I had an Apple II at school in ‘81. They were well established by then. MS-DOS came out in ‘81, too.
And there was no recession in the mid-’80s. There was a short, deep one in ‘83, but ‘84 and ‘85 were good years for the economy. That’s why Reagan won a landslide in ‘84.
So… what are some of the “new technologies” invented by the “younger generation” that are going to generate income?
December 5th, 2008 at 3:25 pm
Falling healthcare and poorer diets/nutrition will have disaterous effects in 30-40 years
You are what your mom ate or didn’t eat during pregnancy., according to University of Florida researchers who are scrutinizing basic biologic mechanisms to better understand whether fetal nutrition plays a role in the origin of certain diseases that surface in adulthood.
As alarm rises over soaring rates of obesity, diabetes and high blood pressure, scientists are eager to determine whether nature or nurture — or some combination — spurs development of these conditions.
There are many people around the world who don’t have enough protein in their diets, and malnutrition is a major cause of babies being born small around the world. There is a lot of evidence that when infants are born small, compared to their counterparts, they have a higher risk of these specific disorders. We are trying to sort out why that might be.”
One possible answer: What mothers eat when they are pregnant could alter the function of key genes in their offspring, even without changing the genes’ fundamental DNA sequence. The notion is part of a new field known as epigenetics.
Human babies who are fed their mother’s milk tend to get a lower protein intake than babies who are fed formula. There is a higher incidence of obesity when the kids get older in the formula-fed babies. So it’s possible that there’s something about the composition of the formulas, like the protein composition, that causes obesity later on in life. Some of it might have something to do with the increase in type 2 diabetes that we’re seeing.
Walter Derzko
Smart Economy
Toronto
December 5th, 2008 at 5:11 pm
I overheard a retired couple (old friends it sounded like)in a restaurant today, talking about how their familes survived during the depression. They both lived on family farms and survived because they produced their own food. They said the phrase “self sufficient” about ten times each. I’m not sure exactly what it would look like today, but that is what smart people will do, become self sufficient, because you can’t eat facebook, or twitter
December 6th, 2008 at 11:03 am
Buzzcut asks:
So… what are some of the “new technologies” invented by the “younger generation” that are going to generate income?
These new technologies are already in the pipelines. They are technologies that question conventional wisdom, challenge traditional business models, are disruptive in nature (ala Christensen’s definition), offer obvious savings over the current or obsolesced technology or offer exceedingly obvious new-to-the-world benefits. Your reaction should be an immediate: Wow ! Why didn’t I thing of that? That’s so cool !!
One cluster of these technologies could be collectively labels as smart technologies, technologies that embed intelligence into benign or dumb products or services.
See IBM endorses smart technology and a smarter planet
http://smarteconomy.typepad.com/smart_economy/2008/12/ibm-endorses-smart-technology-and-a-smarter-planet.html
Walter Derzko
Smart Economy
Toronto
http://smarteconomy.typepad.com
December 6th, 2008 at 12:28 pm
Richard asks:
Any other thoughts our there on what a depression of the 2010s might look like?
Richard Floridia asks: Any other thoughts our there on what a depression of the 2010s might look like?
A good deal will depend on the severity depth and length of the downturn, i.e a 2-3 year slowdown will differ from a 2-decade long depression (see
Back to basics –2010 style
-Cash is king; you’re dead if you are in debt
-opportunity savvy buyer pick up assets at firesale prices ie pennies on the dollar
-frugality, cost cutting, semi illegal ways to save money (ie buy through your neighbor that is still working and gets a 40% employee discount. I.e. Native Indians who hold Indian Status Cards become buyer intermediaries since they do pay sales tax in Canada
-rise in crime, theft, scams, counterfeiting, get rich quick schemes
-global trade collapses ie watch Baltic Dry Index (DBI), people turn to buying locally produced raw materials
-fringe lifestyle groups affering alternatives to poor ie dark greens,
-rise in fascist regimes,
-authoritarian parties offering control & back to the good times roadmap
-increased popularity of backyard depression gardens and possibly chicken coups,
-communal urban farms with cows, chickens and sheep
-High tech urban farming in skyscrappers
-regions with stable sustainable electrical power (hydro or nuclear) fare better then ones dependent of oil or gas
-DIY industry grows, demand for affordable electric vehicles, DIY projects ie people convert electric golf carts to makeshift on-road vehicles
-people who can afford it go “off grid selling solar power and wind-power back to the utility
-growing vegetable and fruit “seed” sales
-books and classes on canning and preserving food,
-immigrants teaching locally born Canadians and Americans how to be self-sufficient
-growing use of food banks and soup kitchens
-abandoned malls and schools become homeless shelters
-centralized preserving centers (attached to food banks) where neighbors can bring in fresh produce to can and to share with the needy in exchange for canning facilities
-doctors making house-calls
-The town strip mall will be replaced by the “swap ally” or roadways or roadsides where people will gather daily for perpetual garage sales to buy (whoever has cash) or barter trade for what you need. (Like south-side New York city)
-On-line swap sites (like e-Bay) grow, but may become unaffordable do to increased shipping costs
-Growth in the repo business, auction business and conspicuous consumption recycling.
-Collapse of the supermarkets, malls and plaza’s chain stores and mega-box stores (due to the pending commercial mortgage bubble and lack of sustained shopper traffic) and the return of the local mom and pop corner variety store
-Increase in entrepreneurship, hobbies turn to businesses if your skill is needed and popular
-Government becomes the major employer, offering work security but with dropping wages
-death of the middle man, intermediary, distribution center, customers go to the source if it exists locally (Ontario does not have any local canneries left, all canned products imported—is there a local opportunity window here?
-return of the corner fix-it store
-unlicensed and unregulated neighbor-helping-neighbor daycare (children swaps)
-growth of regional farmer’s markets
-farm-to-mouth pilgrimages to rural areas and to farms to stock up on produce and meat
-deflation favors renting over home ownership
-wild cards ie global cooling cause by drop in sun spots vs global warming
-wild cards ie peak oil and oil shortages and resource wars (water and other strategic materials, metals)
-migrant workers returning from the Alberta tar sands back to Newfoundland
see more here
Walter Derzko
Smart Economy
Toronto
December 8th, 2008 at 7:57 am
The rules governing the financial side of an economic depression will dictate population geography, both density and movement. As with preceding historical episodes, a fairly mobile society will go where the money is – or where they “think” the money is.
Conversely, the emotional impact of a depression will likely vary, radically. The image of millions who are trapped alone, banished to their solitary hovels, with only the “glow” of a flat screen for company is a bit too “Sci-Fi” channel. I don’t have a clue how this particular aspect will play out, to be perfectly frank, but I’m fairly sure that different generations, different age groups, will react to a depression very differently.
The “read-write” generation, the segment of the population who will, without much provocation, congregate within minutes to form a “flash mob” at the prompt of an SMS text message, won’t wait around for very long, for something or someone to do something – especially when an economic depression begins to shut down real aspects of their ultra-connected world. We’re talking about zealous gamers who spent (waste) countless hours living in and creating virtual worlds, built on a planetary scale from the ground up. When IRL panic becomes palpable, a storm of electrons will fly around the globe so fast Twitter will pray that they had a few of Google’s servers. Practical social cynicism combined with a born-to-tech instinct are traits that will form “ad hoc” co-operation work groups very quickly – regardless of official geo-political boundaries. If there’s any work-around, an upside, this generation will find it and share it; they’ll even make themselves if they have to.
The “Boomers”, on the other hand, will try to arrive at some thematic consensus from within their “threaten” peer group, a terse consensus that they can all agreed upon, then publicly broadcast – all within a few short news cycles – which they will fail to do, “mais bien sur”. This is the generation that defines itself by its extreme social and political polarity and short-term memory loss. The subsequent dejection will tip off a trillion forms of self-medication, of which they will administer to themselves, alone – or that’s how they’ll recount this bogus transcendental experience, inside and out, but it won’t matter. Whatever else, the emotional fall-out of a severe economic depression for this group will be suitably self-absorbed. They will whine about it, incessantly, while dutifully waiting for help.
Wow… it might be entertaining, after all. Let the deluge commence!
December 8th, 2008 at 8:27 am
@ Walter Derzko.
To which generation do you belong, may I ask – surely not the one that was inspired to replace good ole regular food with something better, namely – food products!
That’s a joke, son.
For the sake of rational discussion, it helps if not every sweeping generalization is completely devoid of all substantive material. Unless, of course, that’s germane to your generation – which I gather can leave lugubrious blog comments using these fancy-smacy technology tools and farm the hell out of patch of dirt, at the same time, if you really had to.
December 8th, 2008 at 8:44 am
I interviewed people who had lived through the Great Depression for a project in an economics class in college. One thing I can tell you for sure is that a depression now would be very dangerous. The people alive in the 30’s handled it with way more class and self-reliance than generation Y would, who think they are owed everything.
December 8th, 2008 at 9:03 am
Smart technology? The best you could come up with is smart technology?!?
Sorry, smart technology just doesn’t get my blood pumping the way the Internet and broadband did in the late ’90s.
I use something I call the “Wired Cover Index”. If you saw a technology being hyped on the cover of Wired magazine, does it get you excited?
Nobody is going to get excited by seeing smart technology on the cover of Wired Magazine.
That doesn’t mean that it isn’t a good technology, or that the savings by people adopting the technology won’t be incredible. It just doesn’t inspire people. That’s what’s needed right now, inspirational technologies that will get people to go out and create new companies the way that the internet and broadband did in the late 1990s.
BTW, Wired covers the last few months have had such subjects as energy and food. We are TOTALLY SCREWED if our focus in the near future is energy and food. Energy and food are commodities, and do not grow at increasing rates the way that electronics and communications technologies like optical fiber do.
December 8th, 2008 at 9:10 am
If you will indulge another little rant…
The focus on “the younger generation” got my Irish up.
I see a “yonger generation” so brainwashed by the Educational Industrial Complex that they all want to work for non-profits. They are totally lacking that late-’90s mentality of going out, starting a company, creating an awesome new technology, and selling out a zillionaire.
Now, I don’t know if that mentality was sustainable or simply a manifestation of the tech bubble. But that entreprenurial drive was vital to human progress, and is totally lacking in the “younger generation”.
When I graduated in ‘95, I wanted to work and get an MBA (part time, on the company dime, of course). What does the “younger generation” want?
December 8th, 2008 at 9:15 am
Here is my assessment of the “younger generation”.
December 8th, 2008 at 9:15 am
Sorry, link didn’t work.
http://www.chron.com/apps/comics/showComick.mpl?date=20080902&name=Zits
Here.
December 8th, 2008 at 11:16 am
Wow. A lot of sweeping generalizations and dismissals of Gen Y on this thread. As an older Gen Xer I am impressed with the combination of community involvement, self sufficiency, and entrepreneurial spirit in many of my Gen Y students. I suspect that Gen Y would survive a depression more successfully than the Baby Boomers would have.
December 8th, 2008 at 11:42 am
As an older Gen Xer I am impressed with the combination of community involvement, self sufficiency, and entrepreneurial spirit in many of my Gen Y students.
Any examples? Particularly the entreprenurial spirit?
December 8th, 2008 at 12:25 pm
Cliff, perhaps this is a more likeable (to you) take on my essential points about “the younger generation”:
http://www.forbes.com/opinions/2008/12/07/obama-activism-youth-oped-cx_rh_1208salam.html
December 8th, 2008 at 2:41 pm
The reason that many boomers would fare best in a depression is because many have both 19th, and 21st century skills.
December 8th, 2008 at 7:07 pm
At the risk of sounding like a pollyanna, every time the country has faced a crisis the American people have responded and been up to it. WWI & II were both started partly because the enemies thought Americans were too soft to fight back. The “Greatest Generation” before the Depression were dismissed as irresponsible flappers in the ’20’s. I don’t think today’s various generations would be that different, people will roll up their sleeves and figure out what they need to do to survive, and hopefully what they can do for the country and the world.
December 10th, 2008 at 2:41 pm
Recession, Depression & Shortage Opportunities
Along with the terms recession and depression, have you noticed that the word “shortage” has been popping up in the headlines more frequently? I have and it ranges from winter tire stortages in Quebec to propane shortages and crop spoilage in North Dakota. One blog even predicts regional food shortages in the USA in 2009
Google the word “shortage” and you get 31,854 hits; “shortages” turn up 19,767 hits
Anticipating future changes, resulting consequences and potential shortages can provide opportunities for opportunity-savvy and anticipatory-thinking entrepreneurs.
ie
+Food shortages> gene-altered crops
+Doctor shortages> telemedicine, remote robotics via telemedicine etc
+Road salt shortages>beet juice, other natural alternatives
+Cash shortages> pawn brokers, Loan sharking (Illegal)
+Personnel shortages in startups> glut of laidoff employees
+Price-incease triggered shortages (ie cement, conventional building technology) > smart technology substitutes (smart cement or contour crafting)
+Power shortages in 3d world countries India, China> energy alternatives
+Parking shortages>smart meters
Over a dozen different tactics can address shortage scenarios (substitution, leap-frogging, reduction, elimination, co-production, brokering/ matchmaking, bring in from abroad, dealing with counterfeit products knocksoffs, vacume circumstances & opportunties, left behind scenarios, natural triggers, triggering trigger events etc) and entrepreneurs should explore these to see if each is viable for them.
Walter Derzko, Smart Economy, Toronto
January 7th, 2009 at 4:45 am
I think the government influence in a 2010s Depression like scenario would not be anywhere near as isolated as that experienced during the 1930s. It is for this reason, that I don’t see the current economic crisis cascading to the point that the dreadful economic downturn of the 1930s went to. I do, however, see a major shift of regulatory powers being granted to the states instead of the federal governments because of an outpouring of people getting in contact with their state representatives after seeing the failed policies of the supposed stimulus package and bailouts having adverse effects throughout society.
I also see a surge in NEW AGE spiritual or “betterment” activity making a drastic presentation into society and the rise of activism, protest, and violence spiralling into the cities.
The cities of the nation that were once in the top 200 of best places to live get replaced with cities that were once thought of as uninhabitable as people see a shift of interest in big cities to small towns. ie..People flock from Detroit and St. Louis because of the voilence spurred by record unemployment reaching the 12% range and settle in areas such as Garden City, Kansas and Pflugerville, Texas because of the surge in NATURAL RESOURCE CONSERVATION POLICIES which help people eventually find jobs.
Depression themed reality shows and even hard luck songs such as blues and gospel music show a renewed interest in society as they reflect the jawbone of a nation once thought of as competitive by its neighborhing world allies.
Discount stores, and flea markets which are are almost forced to use the “barter system” reintroduction into society start to flourish as websites catering to people who have bargains replace the once futile shopping malls and outlet centers of a once thriving shopping district of American society
The art in comical strips and even on Broadway and in some comedy club reflect the plight of the unemployed as after each and every one of their acts, they make a plea to whoever is able to afford to attend the events to contribute to the needy.
Banks are soon replaced with 24 hour credit unions which offer banking styles in bulk to where people can hoard their money along with their food in a last ditch effort to save their futures in a SAMS CLUB style format.
A larger percentage of the population enlists in the armed services as violence and conflict in the streets and in other countries overseas sparked by numerous price changes and flucuations in everything from gas to drive cars and heat homes to bread and whole grain products to cook with spark unstoppable protests in the nations larger cities and rural areas.
The postal services and shipping areas even ask that their patrons contribute to the plight of the needy as unemployment reaches a staggering 15% and the Dow shrinks to a meer 4,000 caused mainly because of the breakdown of once powerful banks, saving and loan, department stores retail outlets, and investment firms into smaller companies which only generate 1/3 rd of the capital they used to.
Some Washington D.C. firms also see a split into smaller firms such as The Department of Housing and the Department of Commerce as the trillions of dollars thought to help consumers is soon discovered to have been put into the wrong hands and is soon abused leaving many to wonder where will help come from.
Soon after the plight of suffering has dragged into 6 1/2 or 7 years, a solution to the economic crisis finally gains some ground because of a conflict between powerful armed forces millitary nations of Russia and China over the new top spot of economic prowess gets pushed into high gear increasing the need for security and manufacturing workers.
At this time, because of the surge of green lifestyle changes and a turn away from using cars and monopolized electricity companies show an increase, the United States, United Kingdom, Germany, and Japan are recognized as lower ranking on the scale of their economic powers as the discontinuation of the value of their currencies and the decrease of their exports soon devalues their competitiveness in the world.
It is replaced by countries once thought to be “third world” as their economies show an unprecedented boom such as Dubai, the United Arab Emirates, Kuwait, Iceland, and New Zealand, because of the resources and their proximity to the resources they can offer society.
A surge in individuals seeking other sources of education overwhelms the education system causing it to be restructured and introduce people from other countries to be introduced into it and contributing to it as well.
Soon taxation becomes the order of the day as nations all across the world especially in the once industrialized nations of the United States, United Kingdom, and Germany introduce taxation policies to try to pay for the failed policies they had once asked the citizens of their countries to contribute to causing citizens to rebel against their governments in these countries.
THIS FOLKS IS A WORSE CASE SCENARIO ON HOW THE CURRENT GLOBAL CRISIS COULD HEAD IF STRICTER GUIDELINES AND REGULATIONS ARE NOT PUT INTO PLACE TO CIRCUMVENT CATASTROPHICAL LOSSES.
LETS HOPE AND PRAY IT DOESNT COME TO THIS SCENARIO