Brother, Can You Spare a Dime?

During the Great Depression, a dime could get you a cup of coffee, or two. Today, you'd need a roll of them to buy a cup of coffee at Waffle House but you'd still be short at Starbucks. The whole era of the Great Depression has suddenly become a popular conversation starter. There aren't many among us who lived through it. Those that did were small children at the time. History teaches us that our nation and the world was impoverished. Except for the barons of the early industrial revolution and their families, everyone had to eke out the barest necessities to survive. Those then that were still out on the farm, who had not mortgaged their land for crops, survived literally by the sweat of their brow.

My maternal grandfather, Henry Baird, had been a successful middle manager in North Georgia at the time the Great Depression hit. His lot was unemployment and he eventually traveled the rails looking for work wherever he could find it. After all, he had a wife and nine children to feed. My mother, the baby, remembered only constantly being hungry and wearing hand-me-down shoes and hand altered dresses. I remember her telling me during her life that much of her health issues came from having to wear shoes that didn't fit. Her children always had shoes that fit.

The children of those that lived through the Great Depression were always reminded of what the world could be like again. We scoffed and rolled our eyes at their stories, though now, they come roiling back with import. It's hard to imagine 27% unemployment, especially when you consider that America still possessed a large part of it's population on the farm. If it were today, that number would probably double. Rolling past dozens of gas stations without fuel and getting more news each day of how close we are to a precipice financially, it's getting a little easier to envision. Fundamentally, a nation which has 2/3 of it's gross national product tied up in the consumer, without credit, is in serious trouble. Even if the government buys up all the mistakes of the financial institutions, the remaining few will still be strapped for capital. To think by avoiding a crash that we simultaneously will return to flowing credit is, well, naive.

When all the finger pointing is over, we will be left with a far different landscape in our financial markets than we had even a few months ago. The net result to you and I is that our ability to prosper will be less likely and the ability to meet our basic necessities a bit tougher. The party is over. So what now? Let's distill it to its simplest elements. If you're out of work, triple your efforts and lower your sights. It you're working, be thankful and work harder. Layoffs typically hit the dead weight first, the less productive second and the underachiever last. If you're in debt, pay it off, carry only one card that you use only in emergencies (defined by no food in the refrigerator, not shoes you've pined for being on sale) and save whatever you can. I know this works at cross-purposes to our being a consumer -driven nation but almost nobody is going to do this anyway, so prepare yourself to survive. If you have money to invest, keep it safe. Decide what you want liquid and invest the rest in solid companies that will weather even the worst economic storm. You know them.

Well, the sky is not falling and we're not there yet, but the signs are all there. Wisdom is the ability to see what is happening around you and not only prepare yourself, but also to perhaps profit from it.