Recessions I lived Through

I thought it might be useful for you who are now between 15 and 35 and may not remember ANY recessions very well because you were just too young to really appreciate what was really going on.

The craziest recessions for me were the one in the 1970s and the one that ended around 1983.

Let me set you up so you have some idea of the context for what I'm trying to share. First, the Viet Nam War was still going on. 50,000 (that we know of) soldiers(mostly drafted young ones) died and 250,000 were wounded between 1965 and 1974 in and around Viet Nam. The recession was directly caused by spending ourselves almost into bankruptcy then too because of the Viet Nam War. This needs to be understood to make sense of the beginning of the 70s recessions and the 1980s recession.

I would have to say that the 1970s recession sort of began with the Arab Oil Embargo.(The Arab Nations decided not to sell oil to us to show us how powerful they were). This immediately tripled the price of gas and I think for a time it even quadrupled the price of gas. So it started at about 15 to 17 to 19 cents a gallon then rose at its worse to about 80 or 90 cents a gallon. Though people could still afford to pay for the new gas prices, the cutoff of enough gas made people wait for 8 to 9 hours some days to buy 5 gallons of gas. It was horrible and people would fight with tire irons and put each other in the hospital so I finally decided I wasn't going to go wait 8 to 9 hours for gas so I just went about 8 to 9 pm at night just before they closed and had to wait only an hour or so then for my 5 gallons. In 1973 I was 25 years old.

This recession basically began because we had to pay 4 times then 3 times normal for gas from then on. It made inflation go out of control and thing didn't really go back to any kind of normalcy at all until the mid 1980s because of this.

At the same time(within a year) we had impeachment hearings regarding President Nixon in Congress that tore everything apart too. Also, within the previous 10 years to this. Bobby Kennedy who was running for President was assasinated, Martin Luther King was Assasinated, and President Kennedy was assasinated. So no one trusted that our democracy was a democracy during this time anyway. We hoped we had a democracy but no one I knew really believed it then so everyone was very scared like now. Only then we were afraid of the governments. Now we are afraid of the criminals who pretended to be bankers and could because of no regulation or not enough regulation worldwide destroy temporarily or permanently the world banking industry.

For many people the 70s recession was scary. I found 1980 to 1983 the scariest of all. The U.S. average unemployment rate for 1982 was 9.7% and for 1983 9.6%.(The highest in my 60 year lifetime until now) Whereas even though all the Arab Oil Embargo problems peaked in 1973 it drove the unemployment rates from 4.9% in 1973 to 5.6 in 1974 and to and unheard of since the Great Depression back then, 8.5% unemployment in 1975 and above 6% until 1979. However, by 1980 it went back up to 7.1% 1981 7.6% 1982 9.7% and 1983 9.6% and we didn't even see anything in the 6% unemployment range again until 1987.

However, you are looking around yourself right now and think unemployment, figures nationwide are around the 1982 and 1983 nationwide unemployment right now. However where I live in the state of California unemployment is at least 10.5% and going higher as I write this.

So, it is quite likely that California hasn't seen unemployment figures like this since the Great Depression. And the nation's unemployment rates appear to be rising because of the lack of business loans and business financing available from banks. So even good businesses are going bankrupt nationwide because of bad banks. This is happening worldwide.

So, without subprime loans authorized by banks and mortgage companies and without credit default swaps and the bankruptcy of Lehman Brothers triggering the whole thing the world financial system would not be augering straight into the ground the way it is now.

So, you may ask what will turn all this around? Seriously speaking only the nationalization of most or all banks worldwide coupled with enough good worldwide regulations of all banking institutions to get them to loan again. Without these events there does not appear to be anything that can stop this augering in of the free world banking system and all businesses who have to borrow money to operate including the big 3 automakers in the U.S.
For me, personally this present crisis is more impossible to deal with in any useful way than any recession I have ever seen before in my lifetime. There was a straightforwardness to what we dealt with before in other recessions since 1970. Almost anyone could wrap their minds around it, even me. I eventually realized that the world would prop up the U.S. after Viet Nam spending debacle because they NEEDED us to be there for a variety of reasons not the least of which was that the old Soviet Union was around and was scary as hell for the whole world because of the constant threat of nukes(as in one day earth might be totally gone into asteroids).

However, now I'm not so sure other nations will prop us up because of globalization all nations except for India and China are as severely financially harmed as the U.S.

So, unless the United States and Europe can all borrow money from China and India we are all in trouble in a whole new way.