How Bad Will It Get?

"Those who don't learn from history are doomed to forget it."

That's a little wordplay on a similarly phrased adage. Never a big fan of history in public school, today I routinely review books and Web articles to educate myself. My father was born in 1913 and his sister my Aunt Mary two years later. As teenagers they lived and survived through economic times so poor we generations who followed can barely imagine them. Dad and Mary didn't speak often of those days, perhaps because they preferred not to bring them back to mind. One clue though to the tough times was that Dad had learned to fix just about anything by the time I was born. And that was obviously out of necessity; money was scarce and if you couldn't afford a new one, you mended the old one. Shoe salesmen did a fine business during the Roaring Twenties, but were forced to adapt for the 1930s, repairing old shoes in lieu of selling new product. Aside from professional tailors Dad was the only man I knew with a sewing machine. Rarely did a repairman visit out house because Dad had taught himself to fix just about anything. He even put on a new roof in his 50s. Mom was similarly frugal and never indulged herself in anything much more than a few pieces of modest clothing and jewelry.

Today I am reading an autobiography by a top-notch American entrepreneur named Sam Wyly. I'm only up to Page 22 so far, yet he's already covered how his own impoverished family survived the Great Depression in Louisiana. Wyly's parents had real game, and this apple didn't fall far from the tree. I'm eager to follow the tale of how he rose from poverty to a guy who founded several famous American companies and became a billionaire in the process. This copy of the book is an expansion of the original with new chapters on two of my favorite topics of today: the crash of 2008 and a vision of the future.

There's really though only so much one can learn from history. It does repeat itself as it's said, but principally in content and not as much in form. That's a key reason why it repeats; people focus on the form. Technology today, for example, is far more advanced than that of the 1930s. Mere survival shouldn't be as difficult. The stock market indexes as well are tracing out different patterns lower than they did in the early 1930s. But the content there is the same: they are headed down. The bear market of the 1930s pared 89% off the value of the DJIA before prices began to rise again for decades thereafter. And federal politicians are notorious for repeating history by enacting bad legislation when things go to pot economically. Our of today are no exception. Beyond that I'm out of my league. Well, with one exception perhaps.

During the 1930s a suffering, desperate, and angry population turned its wrath toward Washington. Anger is specific, and the lightning rod of choice was President Herbert Hoover. Reading his bio, it seems Hoover would have made a fine president during prosperous times, but that was not to be. Displaced individuals and families nationwide set up makeshift shanty towns dubbed Hoovervilles. Anticipating the Obamaville as well, I fired up Google and sure enough came back with nearly 100,000 hits. Come Election Day 2010 that number will likely have grown dramatically.