How bad will it get? Post your recollections of past bad economic times

[HamdenRice]

I was walking around my neighborhood counting foreclosed and abandoned houses recently, and it struck me that New York is taking its first steps toward looking the way it did from about 1970 through the late 1980s -- blocks and blocks of abandoned and burned out buildings. But we still have a very long way to go.

Moreover, one thing that is striking is just how much more politicians and policy makers (at least Democratic politicians and policy makers) know about economic policy. It's possible they won't make the same mistakes, exacerbating an already bad economy.

Around 1985, I visited my father at his job. At the time, he was easing into retirement after a long career in the management of the New York subway system. After 10 years in a burnout position in mid town Manhattan, he had gotten a transfer to East New York, Brooklyn, at the time, a very desolate part of the subway system. He worked the swing shift and had the use of a white and blue Transit SUV that he used to drive around to various stations (because train service was so intermittent in that area at that time of night). I met him at his station and I accompanied him as he drove around the area.

At some point that night (it was maybe 10 pm) he pulled over at an intersection of Pennsylvania Avenue and showed me the economic devastation of the area. We looked up the four directions of each street and for as far as the eye could see, there was not a single apartment building, brownstone or store front that was not abandoned.

I also remember the South Bronx. I rode the subway to high school in the Bronx and on warm, sunny spring days, my friends and I would (as kids did in those day) ride between the cars and watch the "scenery" pass by. The South Bronx was simply a wasteland of acres and acres and blocks and blocks of abandoned apartment buildings.

We often thought of the South Bronx as having experienced a slow decay, but nothing could be further from the truth. In fact, studies later showed that the South Bronx basically burned down and was abandoned within the space of a year or so. A perfect storm of bad circumstances and policies -- Robert Moses' determination to tear the guts out of the Bronx with a highway system, an influx of poor people, a rigid rent control (as opposed to rent stabilization) system, pro cyclical rather than counter cyclical property tax policies, insanely lax fire insurance and fire investigations -- caused thousands of landlords to burn down their buildings and collect their insurance money, while thousands of others simply walked away. In the 70s, there were plenty of stories in the newspapers about tenant families being given notices, like, "the fire will be at 10 pm Friday night," and the papers would publish pictures of the tenants lined up at the curb with their clothes and belongings already packed as the fires raged behind them.

We have a very long way to get to where we were in, say, 1973, when much of East New York, Ocean Hill-Brownsville, East Harlem, Bedford Stuyvascent, the South Bronx, Williamsburg, the East Village, Soho, Tribeca, Gowanus, Red Hook, Bushwick, and so many other neighborhoods (many of them now solidly middle class, or even wealthy and trendy) looked like pictures of Berlin after World War II.

Anyone else have recollections of bad times?

[glowing]

1. The last 8 yrs have been pretty shitty.

I graduated college with a science degree in May of 2001. Its been really tough on a lot of us newbies. Clinton years were good on my parents.. and put us thru school. Now, its been really bad in the last 8yrs. They assume that a person coming out of college should make the same amt as if they didn't go at all and still pay for the large bill that came with higher learning.. this is what happens when you don't take care of the people you are elected to represent.. and you ship jobs over seas and demolish the middle class.

[HamdenRice]

3. This is partly my point. Last 8 years were bad but can't compare

to the 70s. The Bush years before this crisis were a mainly problems of debt, sluggish employment growth and low wages -- but not catastrophic unemployment.

That's what a lot of people see as a kind of floor for economic "badness."

But imagine 8% unemployement (with real unemployment near 15% and in rust belt and urban areas, 20%), with inflation at 8%. Throw in gas shortages, so you can only buy gas on certain days, and when there is gas, and it's your day, you have to wait on line for blocks and blocks.

Inflation was destroying university endowments, so you'd go into a university library and when it rained, water would be pouring down into the reading rooms.

Throw in whole neighborhoods being abandoned or burned across the country.

And internationally, after getting whipped in Viet Nam, the US being treated pretty much the way Russia was treated in the 90s. Lots of broken Nam vets were on drugs or skid row.

And this upcoming recession could well be worse than the 70s. Just getting as bad as the 70s would be hard to imagine.

[ironrooster]

2. I'm 45 and remember the 80's recession -

I just had graduated HS in 81' (in Texas) - and had not been a stellar student. My options were also limited by
almost a complete ignorance of the real world. With these limitations, I entered the un-skilled
work force and did everything from T'shirt printing, rental evictions and mortuary work. Never made
much until I got a job with Dallas County that allowed me to complete school.

Yes, things really sucked from the mid 70's through the late 80's. Even in Dallas which had
been spared the brunt of urban decay (because there wasn't much 'urban' to decay), there were
lots of rental evictions - peoples' possessions just piled up on the curbs. Of course, they had
no way to salvage it. I remember shopping in thrift stores that were packed. There was a huge
secondary market for used goods. I purchased several sets of 'retreaded tires' during that period.

The poor preying on the poor.

I'm a licensed and degreed professional these days, but live in a totally different mindset
from my clients and colleagues.

BTY HamdenRice, I always enjoy your posts in the economic forum.

[HamdenRice]

5. I was unemployed in the 81 recession

I graduated college in 80, went to Wall St for a year, hated it, quit and went to Africa for the summer assuming jobs would be as easy to get when I came back. But employment had just fallen off a cliff, and I temped for a year before going back to school.

Thanks for the compliment.

[European Socialist]

4. The 81-83 recession was horrible.

I couldn't afford to to buy razor blades. When I see Paul Volcker is going to be part of the new Economic Team, I cringe. He is one that squeezed inflation out of the economy with high interest rates, and just about starved us to death.

[HamdenRice]

6. I hate Volker for the same reason

I'm amaze how many DUers who aren't old enough to remember that, think he's some kind of great guy.

He was a heartless financial thug.

[OffWithTheirHeads]

18. Folks don't know that Volker raised the discount rate

and slammed the economy to a standstill just before the election. That, and the deal Ray Gun made not to release the hostages until inauguration day is really the reason Carter got creamed in that election. More Republican crime "For the good of the country".

I lost my house in that one too and I've never really recovered.

[SammyWinstonJack]

20. What is Obama thinking with this pick of Volker, then?

:shrug:

[ThomWV]

7. We lost our home in it, left florida with everything we owned in a pickup truck

Including our 1-year-old son.

[HamdenRice]

9. Wow, that's horrible! nt

[madrchsod]

8. unemployed for 8 years in the 80`s

finally found a job in 88. after 92 it`s been jobs that lasted 4-5 years. currently unemployed for about two years due to age and medical problems. thinking of going on ss when i turn 62 in january. it`s not much but at least it`s something

[NOW tense]

10. I remember as a kid during the farm crisis

A guy about 20 miles from my home town killing the banker when he came to foreclose on their farm.

[HamdenRice]

11. Do you mean the 30s? My Dad's parents were offered $5 for the entire crop

the year that agricultural prices collapsed in the great depression. They were tobacco farmers. That was their entire annual income, and it didn't even cover their costs.

[NOW tense]

12. No I mean the 80s

There was another incident in my home town of a farmer killing himself because he was losing the family farm.

[HamdenRice]

13. I remember that-- that was the origin of "Farm Aid"

Was it related to the early 80s Reagan/Volker recession? I remember lots of reports about it back then but don't remember the cause. Lots of farm foreclosures.

[NOW tense]

15. John Cougar Mellencamp wrote

his best album then Scarecrow

[NOW tense]

14. Here is link to the story

NY times
http://www.nydailynews.com/news/ny_crime/2008/09/27/2008-09-27_rage_on_the_farm.html?print=1&page=all

[Tierra_y_Libertad]

16. Being hungry poor and sometimes homeless as a kid in the '50s.

There's nothing romantic or noble about being hungry and living in a car.

But, compared to many, many, people in the 3rd world we were wealthy.

[lumpy]

17. I was a child of the 30's depression.

I can say this; if the US government cannot manage to pull some magic out of the hat, a modern depression will not compare to the 'big depression' of the 30's. It will be worse.
No one is going to bail out the serfs. We will be scratching to provide the necessities of life. Desperate people will be doing anything to survive. The possibility of lawlessness is real.
This nation has lost it's economic independence. It's manufacturing and agricultural base has been compromised and weakened because of unfettered greed. Materialism has replaced common sense and integrity. Corrupt politicians have produced lost of faith in US leadership.
It is up to individuals to form alliances with family/friends, pool their resources and talents, tighten their belts and above all help others in need.

[Warpy]

19. There are 4 abandoned properties in my immediate area

which is odd because houses here are still selling to people who want to downsize their heating bills and their commute.

In the mid 1970s, abandoned construction projects were common, houses that had been framed and sheathed sitting open to the weather. Most had to be torn down and restarted when the economy finally improved enough for the subdivided land to become attractive again.

I remember standing in unemployment lines that stretched 3 blocks in Boston. The poor overworked unemployment folks didn't even ask us if we'd bothered looking for work, there was so little to be had. None of us was referred to a job counselor, just sign the list and get your check, don't let the door smack ya.

My diet actually improved because I started reading about nutrition and watching Julia. This is when I turned into a real cook. Food prices skyrocketed and meat became a once a week event. We didn't miss it.

My health improved because I walked or biked everywhere instead of taking the subway.

I had always sewn some of my own clothing. I taught myself how to do tailored shirts for my ex when he found a job.

The 70s were easier because I was so much younger. It's hard as hell to think of starting over when you should be thinking of retirement.

However, I learned how to be poor then. I've had to be poor since then. I can do it again if I have to. I just no longer consider it much of an adventure.

(As for the South Bronx, I remember driving the Cross Bronx Distressway and wondering how a war got fought with nobody on TV noticing. The truth was that the buildings had been held off the rental market by slumlords who didn't want to bring them up to code, invaded by vandals and junkies, and finally set on fire by bored punks.)

[HamdenRice]

23. I forgot which World Series it was. Howard Cosell had the camera pan

away from Yankee Stadium and announced, "Ladies and Gentlemen, the Bronx is burning."

But that was an everyday thing back then. There was some property being held off, but what was remarkable was the number of landlords who just walked away or burned their way out of the situation.

My dad had a little brownstone in Bed Stuy where I had grown up till about age 3, and which he kept and rented out, after I started college, I helped with his books. He was allowed by rent control to charge $27-$35 per apartment per month, despite groveling at the Rent Control Board which always refused. He lost money every month till he sold around 1980.

Rent stabilization is a much more rational system.

On edit: It was the 1977 World Series, but most of the Bronx had already burned by 74.

I love your line: how come no one told us about the war?

[gollygee]

21. The only hard times I remember were during strikes

When my parents were on strike, we'd eat at one grandparent's house, then the other, then the first, etc. sometimes. And occasionally where there wouldn't be money for Christmas or a birthday. But I was lucky that those problems for our family were only temporary.

[Atman]

22. It was a strange time, because my parents had money

My stepfather was head of one of the missile programs at Kennedy Space Center. We lived in a nice home in the nice part of town, so we, as teenagers, never really felt it. Except for, as other posters have mentioned, when you had to come in contact with the recession in ways no amount of money would help -- like gasoline. It's seems difficult for a lot of today's kids to imagine how serious it really was for those who didn't have the means we did. But no matter how much you made, if your car's license plate didn't end in the correct odd or even digit, you didn't get gasoline that day. Many stations limited how much you could buy. And, as noted, the lines for gasoline would literally stretch for BLOCKS. I remember an entire street in Cocoa Beach being completely impassible because the line of cars when on so long. You'd literally have to change routes sometime just to avoid getting caught in a gas line. And you can imagine how happy people were when, after waiting four hours to fill up, the guy would come out and put the "NO MORE GAS" sign on the pump just two or three cars ahead of you.

Again, these are the things likely to come that no amount of money will be able to avoid. Unless, of course, you use that money to hire someone to wait in line for you, which also happened a lot. It was a pretty bizarre time. Just like we were amazed this summer to watch helplessly as gas prices hit over $4, back then we went from (get this!) .39¢, .55¢, .79¢ -- OMG! It actually shot up to OVER A DOLLAR.

Doesn't seem all that long ago, now.

.

[Buck Laser]

24. I remember being homeless briefly in 1941.

I went to three different schools during my first weeks in the first grade. My father lost his job in September of 1941, just after school started. My mother took me to live with her uncle, where I put in a couple more weeks in school. Then he found another job, and I went to the same school for the next 12 years.

It didn't occur to me that this was really homelessness until I began writing about it for my grandchildren. My father lost two businesses prior to my recollection, but I was too young to remember.