My dad and I are always having conversations about history and the economy. He worked on Wall Street for about two decades, up until the crash of '87, and he also happens to be a history buff. I wasn't interested so much in the economy until I started doing research for my first book, which took place in the 1920's. I noticed an uncanny number of similarities between the 1920's and the past decade, which led me to predict two years ago that we were heading for a depression. When I said it back then, some "smart" people used to snort at me and tell me I was crazy and brainwashed by "left-wing media propaganda." Those same individuals told me that the economy was going to be on the upswing by the fall of 2008.
Not to be the pessimist, but our economic indicators are actually worse than they were in 1929. Percentagewise, the market has plunged just as much as during that year and the major stocks, especially bank stocks, have plumetted far more than during the end of that year. First consider this basic fact: In the 1920's and 1930's, the US made a large portion of the world's goods and provided a significant portion of steel, coal, iron, food, etc. to a global market. The US had the biggest port in the world (New York) and exported more goods than all of western Europe combined. World War II created a demand for manufactured goods from the Allies on a scale never seen before. Also, when that war was over, all of our global economic rivals were smoldering piles of rubble, literally, without functioning infrastructures. We had a monopoly on most manufactured goods because England, Germany, and Japan were too busy trying to rebuild their cities, bridges, roads, powerlines, sewage, running water, etc. We will never have that kind of monopoly on world markets again, unless, in theory, all of Asia and India were destroyed. WE DON'T MAKE ANYTHING ANYMORE. Take a walk through Wal-Mart and try to find goods, besides T-Shirts and socks, made in the USA. Good luck. It was our manufacturing capacity that saved us last time. What will save us this time?
That question stumps both me and my dad. There will definitely have to be some kind of unforseen change to pull us out of this mess.
