The media are bombarding us with comparisons between the current recession and the great depression. Many reporters try hard to find economic measures that make our current situation seem worse than the depression.
Stock market losses over the past 9 months are one area where we seem worse off than those who experienced the losses in 1929. While Canadian stocks as measured by the TSX dropped to 5 and a half year lows last week, U.S. stocks as measured by the S&P 500 dropped to 12-year lows.
So, U.S. stocks prices are at levels not seen since 1997. And we all know what a stink-hole the world was back in 1997. Giant worms roamed the streets killing people. No, that was a bad movie I saw. Actually, 1997 was pretty good for me. I enjoyed my job, played sports, and had a loving young family. Life was good even without an iPod.
Current circumstances are no fun for those who have lost their jobs, but it’s hard to compare the inconvenience of having to take a lower paying job and cut back on lifestyle expenses against the depression era devastation of people walking away from dust farms because nothing would grow.
We seem to need to believe that our suffering is somehow greater or more important than the suffering of others, but in this case, it just isn’t true. We seem to be getting along reasonably well, and I’m optimistic about the future.
I do suppose that besides those giant killer worms, 1997 was okay. I would bet that overall US stock values are more attractive now than they were in 1997, especially in tech. If I recall though, anything tech-related was very high priced and "old economy" stocks were cheap, so there were bargains around then too.
ReplyDeleteI do feel bad for people that were 12 years away from retirement back in 1997, since they are likely 12 years from retirement again.
Giant worms? Was that one I brought over? 1997 was a good year too, but given I am still looking for a job I reserve the right to complain about now
ReplyDeleteGene: I agree that there are bargains available in stocks right now. For people who are bewildered to find that they are no closer to retirement than they were 12 years ago, I'd like to see them learn more about their finances to keep this from happening again over the next 12 years. The fix may be to invest differently or (more likely) to spend less.
ReplyDeleteBig Cajun Man: I don't expect anyone to be happy about being out of work, but be careful who you complain to. There are still some old timers around who remember starving through winters during the depression, and who can't stop themselves from making more preserves in case it happens again.