The Immense Suffering Caused by Financial Devolution (August 20, 2009)
While the mainstream financial press crows about the "end of the recession" and the rising stock market, the suffering caused by financial devolution gets short shrift.
Longtime correspondent Azvitt recently submitted these links to stories on the human toll of financial devolution. While these articles show the mainstream media is covering the emotional toll of bankruptcy, foreclosure and loss of income, what is missing is the recognition that widespread suffering will not be going away "because the recession is over."
A surge in corporate profits and thus in the stock market does not mean millions of jobs will suddenly open, or that the collateral/equity which has been lost will return.
The mass media's lack of context is willful. Not only is it "un-American" to dwell on "the negative," it's also bad for business because confidence and euphoria is what causes consumers to spend, spend, spend and advertisers to buy, buy, buy those adverts which support the media.
While sorting through an old trunk of my father's belongings, we found a stack of yellowing newspapers from the 1930s, collected when he still a lad. (He had two newspaper routes and once told me he made more money than his father did selling insurance.) The top paper was from Thanksgiving day, 1936, and the headline blared, "Prosperity Index Rises."
Yes, they had phony "proof the Depression is over" stories then, too. In fact, the most salient point about the mass media in the 1930s is how rarely it addressed the Depression directly. The effort was all to create an illusion of normalcy and positive spin. This cheerleading was undoubtedly considered the media's "patriotic duty."
The Depression was to run another five years from this headline announcing that the "Prosperity Index Rises." And it only ended because the Federal government borrowed trillions of dollars (in today's money) and put millions of people to work in a vast global war machine.
As a personal aside, I would like to note that I have been down to my last $100 twice: in the Great Recession of 1973-74, and again in the Next Great Recession of 1980-82. My partner and I paid our employees with credit card advances in tough spots in the early 80s, and I ended up mortgaging my free-and-clear house to pay off our subcontractors. Nobody lost a dime working for us or doing work for us, but we lost almost $100,000 in the process of completing a couple million-dollar project.
We exited with our personal integrity intact, and that was worth more than the money lost. I know this not a popular viewpoint but personal integrity is all we really "own" and control.
So as for mental anguish, stress, breakdown, desperation, depression, self-pity, confusion, loss of self-worth, sense of profound failure, and all the rest of that unique torture known as "financial worries," I know them all first-hand. Hence my sympathy for all those experiencing serious financial travails now.
Suicide calls rise (Loudoun County, VA)
Study: Foreclosures Causing Major Mental Depression (live science)
Internet friends log on to suicide note (Albuquerque, NM)
The stress that is involved with multiple deployments is often worsened by financial problems they face upon their return.
The effects of mass layoffs (a single company firing 50 or more people) are seldom the stuff of headline news. But they can be especially pernicious for small communities with few if any employers large enough to take up the slack. The Bureau of Labor Statistics reported that "employers took 2,763 mass layoff actions in June that resulted in the separation of 279,231 workers." ("Separation" being a boring word for a life-changing experience.) But each worker has a story. Some find work and move on. Some descend into poverty and addiction. For many, their homes, families, and futures are put in jeopardy. And some, like Daniel, lose them all.
Police: Death ruled suicide (San Mateo County, CA)
Bank purchases apartment complex (Amarillo, TX)
Sterquell crashed his Lexus on April 1 in what officials ruled a suicide. Creditors who have sought payment for months filed a petition April 21 to force AHF into bankruptcy. The foundation filed for voluntary bankruptcy May 11.
Thank you, Azvitt, for the sobering links.
NOTE: With the U.S. dollar down this looks less than prescient, but here is
my bullish column on the dollar's longer term prospects on AOL's Daily Finance site:
The Dollar: Sunrise or Sunset?
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