Feeling depressed?

editorial notebook

December 06, 2008

Baltimore Mayor Sheila Dixon recently said the city is entering into a period "worse than the Depression." This week, Jim Press, vice chairman of Chrysler, told the Associated Press, "If we have a catastrophic failure of one of these car companies, in this tender environment for the economy, it's a huge blow. It could trigger a depression."

These leaders are far from alone in their apocalyptic thinking. In an unscientific, online survey in The Baltimore Sun, 46 percent of respondents agreed that "the U.S. is heading for an economic downturn on a par with the Great Depression."

Times are certainly hard. News reports constantly remind us that we are in the worst financial and economic crisis since the protracted global slump of the 1930s. Companies are shedding jobs, including Baltimore mainstay Constellation Energy Group, which just announced plans to lay off more than 800 workers. Poverty is expected to rise as families fall out of the middle class. Demand is up at food banks.

But does all of this mean that the situation threatens to rival the bleakest period in our nation's modern history?

John Iceland is among the skeptics. A professor of sociology and demography and an expert on American poverty - currently at Penn State, previously at University of Maryland and the U.S. Census Bureau - Mr. Iceland is quick to poke holes in the comparison. There is, he notes, a laundry list of federal programs today that were unknown during the Depression, including Medicare, Medicaid, unemployment benefits and food stamps. That "safety net" may be fraying, but it exists, and it catches many Americans who would otherwise descend into hunger and homelessness.

Another difference is less tangible but equally profound: What it means to be poor has changed radically as expectations for our standard of living have risen.

Consider something as fundamental as home heating. Today, a family unable to heat its house in winter would be considered in desperate straits. Yet in 1940, the last full year of the Depression, 58 percent of households lacked central heat. A decade later, during the prosperity of the 1950s, and with the rise of mass media, things like phones, TVs and automobiles were transformed into "basics." The trappings of a middle-class lifestyle became a universal expectation.

Many people whom we label as poor today, despite their troubles, are nonetheless well off by the standards of the 1930s. And 1930s Americans were still in better shape than people in much of the world. As Mr. Iceland notes, "When Russians viewed the film The Grapes of Wrath, they marveled that the Okies had cars."

Indeed, even during the Depression, few Americans literally starved - possibly because kinship and community bonds were stronger than they are now.

Perhaps the most telling number in this debate is the unemployment rate. It is now 6.5 percent and expected to get much worse: Goldman Sachs has projected 9 percent unemployment by the end of 2009. But that would still be less than the double-digit unemployment that walloped the economy during the last severe recession, in 1981 and 1982.

By comparison, unemployment in 1933 reached a mind-boggling 24.8 percent - and back then, in most families, only one parent held a job. "I don't think anyone thinks we're going to get to that level," Mr. Iceland says.

None of this is to suggest we aren't in for a very rough time over the next several years. But in a world where perception influences reality, it is important to keep things in perspective. Scary talk about a new Depression - without due consideration of the historical context - can make a bad situation worse.

The reality we face is troubling enough. Why exaggerate?

- Michael Cross-Barnet

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