Parallels

There are some interesting comparisons that can be made between 10 years before the Great Depression and today.

During the 1920’s, people flocked from farms and rural settings to urban environments to take advantage of the blossoming industrial growth. Manufacturing jobs lured immigrants and the people involved in agriculture. Basically, this transition created the middle class as we know it today.

Families were upwardly mobile, in pursuit of all the modern luxuries the era could afford them. Many people were considered extremely wealthy, mostly due to their investing in the stock market. However, their wealth was largely based upon buying on margin. Therefore, when the market crashed, the rich were forced to pay up or face losing everything, which was exactly what happened to many hard working people.

In the past 10 years, leading to the financial crisis we face today, consumers have fled their urban settings in search of larger spaces to raise their families. The general population also has access to the best that technology has to offer. Similar to the 1920’s, these luxuries have been bought on margin. The difference today is the margin equals credit cards and unsecured loans. As was the case in the failing economy then, Americans face the same loss of possessions today. Hard working people continue to lose their homes and acquired goods as fast as if it was 1930 all over again.

As a whole, the middle class has historically been consumers for “want.” Reality is slowly setting in that we must transform into consumers for “need.”

The coming time will not be an easy one. New President Elect Obama will face the same challenges Roosevelt faced when he assumed office. Our new President has set in place, massive public works projects, just as we had during the Depression.The employment opportunities that these public works create will be swallowed up in a battle for survival.

Remember, it’s not a crime to gift your child or a relative something they need as opposed to something they want. As needs, briefly, will out weigh everything.

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