Noted Professor and Gatton Endowed Chair in international banking and financial economics at the University of Kentucky Joe Peek, released a sobering report a few days ago on how the current economic downturn will affect us for the foreseeable future. When I read Professor Peek’s report, I was blown away. Household Reaction to the Financial Crisis: Scared or Scarred? Professor Peek wrote, “While Americans, and the American economy, are noted for their resilience, the current financial crisis and recession exceeded the devastation created by other post-World War II recessions.”
What does it all mean?
I remember talking with my Grandparents about the Great Depression. They spoke of how that period in history taught them to become thrifty and very frugal with everything. I still can go to my Wife’s Grandmothers house today and see tons of items in her pantry…some have been there for years and she may never ever use them but it’s been instilled in her to save, save, save. I recall a story she told me about how she and her husband drove to 3 different stores to do their shopping because there was a better deal on produce or meat at one over another. Never once thinking about the amount of time and effort it took…the habits instilled drove them to make those extra trips just to save a few bucks!
Are we a part of the next Great Depression Era?
I wonder what impact this economy will have on me. I wonder what my kids and grandkids will think of this period in our history as they look back on their holophotos while driving their space cars. Just recently, my 3 year old flat screen TV decided it was time to stop working. My 12 year Son and 8 year old Daughter assumed we would immediately run to the local electronic store to get a new one. Instead, I decided it was too large of an expense right now and we are dealing with life without our trusty wall box! I can only image what my kids will tell their children years from now? “When I was your age, my Dad was so cheap…he would even spend a measly $1,000.00 on a new TV”
What will the future be like…in the future?
Professor Peek’s goes on to say, “It is unlikely that the dramatic rise in loan delinquencies, home foreclosures, and bankruptcies will show a meaningful decrease, as high unemployment and low house prices are widely projected to remain for an extended period. Such headwinds to a strong economic recovery are likely to have lasting impacts on the values and behavior of the current generation, much as the Great Depression had on its generation.” This is, of course, the research of a collection of economists and Professors so I’m inclined to listen…and I sure am interested to see what kind of impact this economic downturn will have on me.
Great Photo Courtesy of ausiegall on flickr.com