I'm currently reading the book "Pinched: How the Great Recession has Narrowed Our Futures and What We Can Do About It". I'm hoping to give more details of this book as I go along, but one thing the author does that I found fascinating was to describe the short and long term effects of our previous significant recessions in hopes of gleaning lessons from those down terms and applying those to what we're finding today.
"Long, deep slumps are foreign to many Americans alive today, but of course they are not unknown in the nation's history. The final two decades of the nineteenth century saw steady deflation, hard times for typical workers, and great tumult. The Great Depression and the 1930s are now nearly synonymous. Most recently, from 1972 through the early 1980s, the United States endured economic stagnation, wage erosion, and a serious of painful economic shocks; in some respects, the weakness lingered until the mid-1990s. If we align shocks of those periods - the panic of 1893, the crash of 1929, the oil shock of 1973 - then we'd be sitting today in 1896 or 1932 or 1976."
and it's affects:
"The longer society stews in a deep slump, the more it is altered. Changes to community character, generational ambition, and social harmony that are nearly imperceptible early in a downturn become suddenly overwhelming later. What follows is a pocket of history of these three long downturns, with a focus on the enduring marks they left on America. Each delineates a major turn in the country's economic, political, and cultural history. And each holds lessons for us in the present day."
One thing is certain to me, that this recovery is going to take a while. I don't care what anti-Obama people think. You could elect Ron Paul as president, and the recovery will take a devastatingly long time. Well, in the absence of something cataclysmic and unseen, that is. I'm speaking based on my perceptions of our current trajectories.
The problem is that a long downturn is going to change our cultural landscape in ways that are impossible to predict.
Two high-level lessons garnered from the book so far. The Great Depression changed the political landscape heavily toward liberalism. This persisted through the 1960's no matter which party controlled the presidency.
All of this ended in the 1970's when we experienced another economic cataclysm precipitated by massive government spending combined with a significant oil shock. We were also, not coincidentally, coming off a massively wasteful war in Vietnam and the Nixon presidential scandal. All of this shook our country and left it open for Ronald Reagan to take over and begin a period of conservatism that has persisted for 3 decades.
Our current recession is much more similar to the recession of the 1930's than the 1970's. I'm not at all sure, where it will lead us, but one thing seems certain, it will probably last a while and there will be a lot of painful, long lasting bumps a long the road.