Late 70's recession.

Discussion in 'Economy' started by rcajun90, Feb 5, 2009.

  1. rcajun90
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    rcajun90 Member

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    I was to young to really care much about it. I remember interest rates were through the roof and if you had money in the bank you made out like a bandit. If anyone on here was older at that time how you compare then to now?

    I never recall banks failing and so many major chains going under. Nor did I ever hear the term bailout used until the early 80's and Chrysler which appears to have been a good move. How was it during the age of Carter?
     
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  2. Annie
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    Annie Diamond Member

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    Too weird that you posted this now. I just got off the phone with my just graduated college daughter, she was like, "Mom, are we going to have a depression? What was it like then? :eek: Ahem, I was born mid-50's. :lol:

    I was just starting college when the 70's recession hit. I was freaking that bread went over $1 per loaf! I called my mom and said something like, "Are we going to go into a depression? Starve? How can we afford prices skyrocketing like bread?" She was like, "Calm down, things happen and then change. Study."

    Things happen, change happens, then other changes happen. Perhaps it will get worse, perhaps better.
     
  3. rcajun90
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    rcajun90 Member

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    I was born in the late 60's so I remember it but just didn't know everything that was going on. I remember inflation being out of control, high interest rates for borrowing money and high interests rates for money in the bank. Things did look pretty terrible until Ronald Reagan came in to save us.:razz:

    This seems different. Everyday it seems there are massive layoffs, stores closing and so many industries with their hands out. I'm not saying things are worse or better just different. It doesn't seem like anyone is in panic mode. Perhaps it is just I'm old enough now that I know and care about what is going on.
     
  4. Terry
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    Terry Shut the $%$ Up!

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    I remember prices were high on everything but mostly those GAS lines (odd even days) was horrible!
     
  5. Old Rocks
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    Old Rocks Diamond Member

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    I was born in the early 40's. Never have I seen the economy in this shape. My grandparents lost all they owned the the First Great Republican Depression. My parents grew up in it, and my father and uncles all served in WW2. One of the things that I remember distincly when I was growing up was that Mom felt secure only when there was ample canned goods in the pantry. We ussually had six months of basic food in store at any given time. And allways a big garden. And much canning, gleaning out of abandoned orchards.

    Now on the verge of retirement, I plan to go back to that lifestyle. Not only did it save major money, the food was far healthier.
     
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  6. Neubarth
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    Neubarth At the Ballpark July 30th

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    The whole mess was caused by the Arabs trying to kill the Jews in Israel. As has always been the case, the Jews fought like Supermen and the Arabs (Egypt and Syria and co conspirator Saudi Arabia) had their collective hairy arses kicked, so they decided to create economic havoc in the industralized world by embargoing oil to punish the west.

    We had inflation and increasing unemployment, but the real bad recession was in 1981 - 2.
     
  7. SwingVoter
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    SwingVoter VIP Member

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    I was a kid then, and aside from Diff'rent Strokes, Reggie Jackson, and Franco Harris, my strongest memories are of gas lines, the hostage crisis, and watching everything the President tried to do turn to shit
     
  8. Zoomie1980
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    Zoomie1980 Senior Member

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    Actually the recession that came out of the stagflation of the late 70's hit in mid 1982 and peaked in winter of 1983. It was a LOT worse than this one.

    Over 3X the number of banks failed in that one than what we have seen today

    Unemployment at the height of that recession was just under 12%, currently about 7.4% in this one.

    We have DEFLATION right now, running almost -3%. Inflation back then was running about 10%

    Mortgage rates today for 30 year fixed are about 5.1%. They peaked at 14.5% back then. My first mortgage in 1982 was 12.5%, and I thought that was a STEAL!!!

    New weekly jobless claims hit about 550,000 last month, in population adjusted number they peaked at over 800,000 in early 1983.


    We still have a LONG way to go to equal that recession. The good thing about that one was that it was relatively short because Reagan refused to bail anything out and just let it all crash on its own....made it very harsh but short lived.

    This one will drag out for upwards three years because that's what "stimulus" does, lightens the blow but extends it for a long time.

    And by comparison, in 1932 adjusted to today's numbers. 1.5million weekly jobless claims, unemployment at 28% 5X the current bank failure rate.


    It STILL don't know why so many are in such a panic over what has been a fairly average recession so far in terms of unemployment and bank failures....
     
  9. editec
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    editec Mr. Forgot-it-All

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    The recession of the early 80s was bad, without doubt.

    Reagan had nothing to do with fixing it though. Not a thing. He was as much a victim of the FEDs high interest rates (during the first two years of his admin) as Carter was in his last years in office.

    The FED drove up interest rates during the Carter administration to wring stagflation out of the economy. It worked because unemployed people do not continue driving up prices.

    As I recall the Dow Jones Industrial average was down to about 400 or so in 82 and in one breath taking period gold went from about $130 up to over $800 in a matter of a few months.

    This economy actually is looking like it's going to be worse, to be frank.

    I could easily be wrong and definitely hope I am.

    Frankly I don't think anybody knows enough about the economy, but as there are only three possible things it can do- go down, stay the same or go up-- people will always predict an outcome and some of them inevitably will be right.

    If understanding the economy was the science economists like us to think it is, then everybody would know exactly where it's headed.

    But since the economy is driven by people who are making decisions as it is changing, (hence changing it themselves) it is impossible to predict outcomes with any degree of certainty.

    Here's what I know, though about the economy.

    The economy is really just decribing the people interacting.

    And here we still all are, still capable of working and doing the stuff that produces the things we all need

    So sooner or later something will happen that makes it possible for the majority of us to go back to work and make our lives as best we can.

    I am convinced that if we did nothing, things would eventually improve, and if we do something kensyian the economy will eventually improve, too.

    I'm not sure that we're the masters of the economy we wish we could be, folks.

    I suspect that we can no more master our future economy, than we can master our future history.

    In the long run, I suspect that's probably a good thing, too.

    One doesn't have to be a fatalist to know that we do not control our fates.
     
  10. Care4all
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    Care4all Warrior Princess Supporting Member

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    my parents became wealthy because of it....they had saved money thru pinching pennies their whole life so they put it all in CD's earning 9% interest, compounded daily, minimum... on all of them...they let it ride for 10-15 years and when all was said and done their money had a 300% Gain...tripled.

    I got my first mortgage for a townhouse in fort lauderdale area in the early 80's and it was at 13.5% interest rate! :eek:

    Now, to the issue of the day...

    I think this is pretty bad...worse than I have ever witnessed, and those countries that trade with us and buy our Securities are hurting as well....

    Worse for many reasons....all other recessions, we did not borrow from foreigners to this degree to pay the bills before the recession and now needing to borrow from them again, to bring us out....

    too much in the hands of what foreigners do, will they lend to us, or will they not lend to us...

    Worse because NOTHING has been done to take care of the toxic housing debt...

    until there is a solution to the housing crisis, we will NOT come out of the recession which means it will be a depression....the only difference is in years....a depression would be at least 5 to maybe 10 to 15 years of a retracting or static economy I would imagine?

    Please don't take this as Bush bashing, because i do not make a habit of Bush bashing BUT...

    The day I saw this coming, and i mean the day i saw the real seriousness of the situation, was the day that president bush had a live appearance on tv telling us why the bailout was necessary...

    He made it sound so bad, that i had my husband take out a thousand dollars in cash to get by on if there was a run on the banks the next day....and double checked that we were insured on our savings....but did not even think about an old 401k that i had left in tact when i left the company 7 years previously, nor did i realize that it wasn't necessarily a run on the banks but it was a run on the stock market....lost my butt on the 401k.

    I thought President Bush made a mistake that night along with Paulson, as serious as he made it all, OUT OF THE CLEAR BLUE, because the administration was touting how great the economy was in... prior to this... and us every day folk that do not follow the market that closely, and just hope our 401k's do well...and believe me there are plenty of us....... got the pajesus scared out of us by him....

    I thought presidents were suppose to invoke confidence not put us in to shock and awe....how could this have been out of the blue....? I just don't get it? How could the administration not have seen this coming is beyond reason, it was their job to know and congress's as well.... where was the oversight?

    i see things spiraling down for another year or two, then some sort of comeback, but never to be as wealthy as we once thought we were....at least for those of us that are older.

    I hope I am proven wrong.

    care
     

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