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Monday, November 17, 2008

What Would A Depression Look Like?

A modern day Depression wouldn't look anything like the 1930's. It would have unique hallmarks:

In a modern depression, the swelling ranks of the unemployed would likely change the landscape of the country, uprooting people who would rather stay where they are and trapping people who want to move. In the 1930s, this took the visible form of waves of displaced tenant farmers washing into California, but it also had another, subtler effect: it froze the movement of the middle class. The suburbanization that was to define the post-World-War-II years had in fact started in the 1920s, only to be brought sharply to a halt when the economy collapsed.

Today, a depression could reverse that process altogether. In a deep and sustained downturn, home prices would likely sink further and not rise, dimming the appeal of homeownership, a large part of suburbia's draw. Renting an apartment - perhaps in a city, where commuting costs are lower - might be more tempting. And although city crime might increase, the sense of safety that attracted city-dwellers to the suburbs might suffer, too, in a downturn. Many suburban areas have already seen upticks in crime in recent years, which would only get worse as tax-poor towns spent less money on policing and public services.

"You could have a sort of desurburbanization phenomenon," suggests Michael Bernstein, a historian of the Depression and the provost of Tulane University.

So let's see. You'd have a severe drop in disposable income which would limit the ability of people to engage in excess consumption, with a commensurate contraction in suburban sprawl as people flock to urban environments where you can walk to your local Whole Foods Market.

So basically... an economic Depression is the Left's wet dream.

NOW it all makes sense.


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