As a dog owner, I cannot take Riley out for a walk without seeing smatterings of newspaper headlines that warn everyone that “The Next Great Depression” is latent.
As a business owner, I cannot have a conversation with my banker, CPA or CFP without receiving mixed messages about what to expect next.
With the media raging about this next “Great Depression” coupled with the elections less-than a month away, we’re all looking for the silver lining in an electoral candidate (Obama, McCain, etc); but we’re looking in the wrong place.
The change begins with YOU and ME. What turned a recession into the Great Depression was a drop in consumer spending that we cannot explain through income or wealth effects. With the advent of the internet, information (accurate or not) is so widely disseminated that us consumers are falling victim to misleading information.  However, the advantage to having all of this information at our fingertips is that the consumer can proactively research what in actuality is going on. I took the time to do this, and took a shot to sum up a majority of it up below.
Our current situation is a financial panic, not an economic collapse. There is no doubt that damage to the financial sector has been profound, with the demise of major Wall Street institutions and gut-wrenching plunges in the stock market. But that has not hurt Main Street to the extent it did in the Great Depression. There are many critical differences today- one of the biggest is the very fact that the Great Depression already happened and has been intensely studied.
Alan Taylor, an economics professor at UC Davis points out that “if a recession is really bad and long, we call it a depression; a recession if something you remember 10 years later. A depression is something you remember 100 years later.”
Rather than blogging any further about my view on politics and economics, I want to share some basic facts and numbers with you about what’s really happening in our economy: click-to-view
