School has begun for children across the nation and my children were no exception. I recently read something from my son's history book, The Americans: Reconstruction to the 21st Century and I thought I might share it here.
Chapter 14 is about the Great Depression and is titled, 'The Great Depression Begins'.
Here are some excerpts from that chapter:
Economic Troubles on the Horizon
As the 1920's advanced, serious problems threatened economic prosperity. Though some Americans became wealthy, many more could not earn a decent living. Important industries struggled, and farmers grew more crops and raised more livestock than they could sell at a profit. Both consumers and farmers were steadily going deeper into debt. As the decade drew to a close, these slippages in the economy signaled the end of an era.
Industries In Trouble The superficial prosperity of the late 1920s shrouded weaknesses that would signal the onset of the Great depression. Key basic industries such as railroads, textiles, and steel had barely made a profit.
--snip--
Even the boom industries of the 1920s --automobiles, construction, and consumer goods --weakened. One important economic indicator that declined this time was housing starts--the number of new dwellings being built. When housing starts fall, so do jobs in many related industries such as furniture manufacturing and lumbering.
--snip--
Consumers have less money to spend As farmers' incomes fell, they bought fewer goods and services, but the problem was larger. By the late 1920s, Americans were buying less--mainly because of rising prices, stagnant wages, unbalanced distribution of income, and overbuying on credit in the preceding years. Production had also expanded much faster than wages, resulting in an ever-widening gap between the rich and the poor.
If history is to repeat itself, it looks to me like bad economic times are just on the horizon. All the indicators seem to point in that direction.
Looking forward, I believe Democrats really need to plan how they are going to handle this possibility. If they are afraid of a little heat in the media about their 'tax and spend' policies, just wait until the weight of this falsely propped up and superficially growing economy collapses in upon itself. If this should happen during a Democratic presidency or a Democratic House and Senate majority (a definite probability), they'd better be prepared to respond to the allegations that will surely be leveled in the media by the GOP and their pundits. In fact, I'd be willing to bet that the GOP is already gearing up a media campaign strategy on the poison pills they will leave behind for the Democrats to deal with.
IMO, the fulcrum of this current economic bubble is the price of energy. The technology exist today to completely eliminate the need for fossil fuels and move to a renewable energy economy. This could soften the landing and eventually create a whole new era of economic prosperity. But unfortunately, a lack of foresight by Congress, inertia to change by corporations, and the willingness of this administration to go along with corporate agendas have stagnated this effort.