Bad News

I didn’t do well in economics and I don’t claim to know much about abstractions like “the economy,” but I do know how to read a newspaper.
banks_fail.jpg
People have been trying to find the right words for what’s going in America today: slowdown, recession, depression.
When people line up outside their bank, praying that they will be able to withdraw their money, we’re in a depression bind. No, it’s nothing like 1929. Not yet. During the Great Depression one third of American adults were out of work. I can’t quite imagine that scenario in today’s America, where everyone is armed to the teeth and our sense of community is badly frayed.
[UPDATE] According to The Wall Street Journal, the FDIC typically insures as much as $100,000 per depositor, but nearly $1 billion of IndyMac’s (whose customers are pictured above) roughly $19 billion in deposits was uninsured, affecting about 10,000 people, according to the FDIC. Officials have said they would be able to make 50% of customers’ uninsured funds available.

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About David Burn

Native Nebraskan in the Pacific Northwest. Chief Storyteller at Bonehook, a guide service and bait shop for brands. Co-founder and editor of AdPulp. Contributor to The Content Strategist. Doer of the things written about herein.

  • fatc

    What, no McCain banner ads on this post? They didn’t buy keywords like “stocks fall” or “confidence ebbs” or “recession”?
    Weird. Maybe they’re in some kind of keyword denial.

  • t

    seriously, it’s sloppy writing like this that perpetuates the fear in this country. we are not in a depression, not even close. do you realize that during the last depression, unemployment was at 25%? it’s around 5.5% now. economic growth declined by over 8% in the first year of the great depression. it is hovering just above .5% now. and the very definition of ‘depression’ means that the economy has experienced a downturn for an extended period of time. we haven’t even experienced a year of slower growth (let alone negative growth) yet. the GDP grew almost 5% just last year in the third quarter.
    yes, things are bad and could get worse. but banks have gone through difficult times quite often in the history of our economy, not just during the depression. for instance, over 1000 banks failed during the savings and loan crisis back in the early 90s. right now, about 150 banks are listed ‘at risk’.
    so let’s ease up on the depression talk, eh?

  • http://adpulp.com David Burn

    Looks like you skipped this text: No, it’s nothing like 1929. Not yet. During that Depression one third of American adults were out of work.
    But thanks anyway for cleaning up my “sloppy writing.” Even editors need an editor from time to time.

  • t

    my point is don’t be so casual with the word ‘depression’. i know you said it was not like the great depression, ‘yet’. but just putting that word out there is a bit hysterical. i guess i just don’t understand why everyone seems to want this economic downturn to be worse than it is. could it get worse? yes, but that’s pretty much the case with every downturn we’ve experienced since the great depression. but we’ve managed to climb out of it every time. my main concern was that you seemed to be implying that the IndyMac situation means we are on the precipice of a depression. it does not. is it bad? yes. but let’s not feed into the media hysteria. doesn’t seem to do any good, in my opinion.

  • http://adpulp.com David Burn

    I hear you. I’ll strikethrough the “D” word.
    As John Halcyon says, “Love more. Fear less.”

  • yikes

    Before you start throwing out unemployment numbers, you should know that since the Nixon administration, and continuing unabated since, is the practice of cooking unemployment numbers.
    For instance, people who have been unemployed for so long that they’ve stopped actively seeking work don’t count as unemployed.
    Real unemployment is probably around 10%.
    I don’t want that to be true, but it is.

  • suede

    $70 for a tank of gas.
    $1000 utility bills.
    Record foreclosures.
    You’re right t, that sloppy writing and media hysteria sure is causing a mess.

  • t

    i understand the real UE rate is higher, but even 10 percent doesn’t come close to the numbers we saw during the depression. and we saw much higher unadjusted numbers during the 80s (greater than 10%) and early 90s (almost 8%) and i don’t think too many people would view either of those times as a depression either.
    as for the home foreclosure, yeah, it’s bad. but the term ‘record’ is deceiving because the stats don’t go back to the great depression. it’s estimated that the foreclosure rate was about double what it is today back then. and that was during a time when home ownership was largely only open to the wealthiest.
    again, i never said things weren’t bad. just trying to put things in perspective a bit.

  • yikes

    That’s fair.
    The run on banks is really troubling though, and it’s not as though we have a government at the moment that will do a goddamn thing about anything of substance. Except of course another war.