Business and economic information you need to know
Oct 6, 2008 10:39 pm US/Eastern
Today's Recession Is Not Yesteryear's Depression
His memories of those hard times are difficult to imagine when we live in such a right-now-gotta-have-it generation, and although our economy is hurting, most like Lawrence Singer agree we nowhere near a depression.
"We were poor, and we thought that was normal," said Singer. "Now we've lived through this excess.'
Singer has literally seen the worst of times and the best times. He now owns two cars, but there was a time he and his family had nothing. Born in 1924, Singer was a little boy when the U.S. economy hit rock bottom—triggering the great depression. He remembers those gloomy desolate times of the 1930's.
"Unemployment was ramped, and people were starving, and there were bread lines, and people were really hungry," said Singer.
Now at age 84, Lawrence truly believes our economy is in a critical period, but says it doesn't even compare to the great depression.
FIU economist Dr. Jerry Haar agrees.
"I think we are going to be spiraling to a very deep and prolonged recession—depression I don't think so," said Dr. Haar.
Haar admits there are similarities when looking back at 1929 and looking at where our financial markets are now. There was a housing boom, cheap credit was available and stocks were falling.
But he says strong signs exist that we won't slip into depression.
"Of total mortgages in the market today, 9 percent are in default. Let me say it the other way: 91 percent of mortgages are not in default."
Unemployment was at 25% in the 1930's, while just over 6% are out of work today. The stock market crash of 1929 forced a major bank collapse, while far less have folded in today's era of bank mergers.
"You had thousands of bank failures, but what we are seeing now is shrinkage in the financial sector," said Haar.
The market may have its indicators, but for 84-year-old Singer, his personal memories are enough for him to know these turbulent times could be a much worse.
