Monday, October 25, 2010

iDepression 2.0

Zerohedge posted another brilliant piece by guest poster Jim Quinn, in which he explains why things are as bad as in the Great Depression (Depression 1.0) and yet we don't see the massive breadlines and misery. The reason: Technology.

Quinn states in his original post:
The unemployment rate reported by the Bureau of Labor Statistics and parroted by the mainstream media is currently 9.6%. Once you stop counting people who have given up looking for jobs and “left the workforce”, discouraged workers, marginally attached workers and workers forced to work part-time, you magically get a 9.6% rate. Using the method of measuring unemployment used during the Great Depression and reproduced by, the real unemployment rate is a depression-like 22.5%. The peak unemployment rate during the Great Depression was 25%. There is no doubt that we are in the midst of 2nd Great Depression, but where are the bread lines and the lines of unemployed winding around the corner?

Dubbed iDepression 2.0, it is in fact the electronic Great Depression - and here is why:

1 - People are not standing in massive bread lines because they get foodstamps or an equivalent bank card from the government that they can take to any grocery store to buy food. Right now, about 1/8 of the American population is on foodstamps. That's 41.8 million people!

2 - There's no waiting in line at the Unemployment line - where you can get your 99 weeks of unemployment - because you can file UI from the comfort of your home, on the Internet in some states, or over the telephone. In America today the government says unemployment is at 9.6%, but truer measurements show it to be around 22.5%.

3 - There's no waiting in line for relief/welfare checks - they get mailed to you, put electronically into your bank account, or money is put on your State issued credit card.

4 - While we DO have a foreclosure mess on our hands - for the most part people are staying in their foreclosed homes for up to 14 months or more. And while some tent cities have been springing up in America - for the most part people have been staying in their homes or moving in with family.

Meanwhile, the food pantrys and the soup kitchens have been doing a brisk business. More and more people are shopping at Goodwill and Salvation Army Stores. The number of weekend tag sales and garage sales have increased - in my area you never saw a tag sale when the weather started to get colder, but now you do. There is an increased numbers of empty storefronts and whole buildings lay dormant.

Today, no one has to see you standing in line waiting for a government handout. Back in the Great Depression, people were actually loathe to "get relief". They had a bit more pride and were ashamed to ask for help. Today - people expect it, depend on it, demand it, and game it.

Jim Quinn says:
Today, a neighbor in a matching McMansion down the street, with the perfectly manicured lawn, could be unemployed for three years and no one would ever know. They could sustain themselves on unemployment payments, food stamps, and credit cards. Welcome to the iDepression 2.0.
It's true if you think about how well poverty is masked by technology in our country. Afterall, the latest reports (Sept. 16, 2010) show that the poverty rate has greatly increased. The US poverty rate hit 14.3 percent last year, up from 13.2 percent in 2008. The number of poor is at its highest level since 1959, five years before the Johnson-era War on Poverty. Today, 1 in 7 people in America officially lives in poverty. And yet we really don't see it.

Unemployment numbers are staggering. When you take into account the underemployed as well as the unemployed, the national rate hits 17% and California alone has hit 22% unemployment. 1/3 of the unemployed have been out of work for over a year. This hasn’t happened since the Great Depression.

For many, things are almost just as bad now as they were then.
But again, where are the breadlines?
Where are the lines of all those needing relief?
For all intents and purposes - as a result of technology they are invisible this time around.
Welcome to iDepression 2.0