Late 70's recession.

[rcajun90]

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?

 

[Annie]

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? Ahem, I was born mid-50's.

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.

 

[rcajun90]

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? Ahem, I was born mid-50's.

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.

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.

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.

 

[Terry]

I remember prices were high on everything but mostly those GAS lines (odd even days) was horrible!

 

[Old Rocks]

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.

 

[Neubarth]

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.

 

[SwingVoter]

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

 

[Zoomie1980]

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?

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....

 

[editec]

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.

 

[Care4all]

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!

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

 

[Zoomie1980]

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!

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

The scariest thing about this one is we are seeking to borrow so much to pay for "stimulus" and bailouts. In 82-83 Reagan did NOTHING. Let it pretty much find it's own bottom. That meant we did not spend anything on "stimulus" although we did bail out Chrysler because they built tanks for the military and we needed that to continue.

But we have elected to spend money we don't have to pay for bailouts and stimulus. There is a REAL THREAT, China and Dubai and the Saudi's will NOT buy all the notes we will float to raise the money to pay for any of it.

Now that would likely be a good thing of sorts as the economy would then have to find its natural bottom, not an artificial one. We may hit 83 levels yet, don't know.

But yes, until the home crisis is bottomed out and recovering the economy will do nothing.

 

[Zoomie1980]

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.

We are going to find out how completely powerless we are to effect things. This stimulus will have little real impact. No more than Bush's checks, or the TARP stuff. The global economy is simply too large for any amount of US gov't manipulation to have any real effect. We are pissing in the wind.....

 

[Said1]

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?

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.

I was just going to post as much. I lived in a fairly small city that was booming and it was like everything stopped over night. Housing developments abandoned mid-construction, people losing their jobs, homes. All of a sudden everyone was applying for education grants and going back to school or leaving town.

 

[Dante]

It wasn't really all that bad. We eventually got out of it as we will the current ...err...crisis. The more things change the more they stay the same.

Watch Obama

 

[oreo]

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?

I remember it well. I was 26 years old at the time, & my husband & I were small business owners, (electrical contractors) at the time. We had 10% unemployment in the country--which is still considered disastrous. Work was extremely hard to find, especially in construction, just like it is today. There was, like today, too much available housing. We had overbuilt & a housing bubble insued. We had inflation double digit inflation over 10%.

Mortgage interest rates for fixed 30 year mortages were 18%. Short term interest rates even higher. Believe it or not you could get an 18 month certificate of deposit savings account that paid 18%. A 10% mortgage loan was unheard of--& first time home buyers with good credit & the ability to re-pay the loan was given out by certain localities--looking to stimulate the economy.

Carter rode in on his theme--"he will never lie to us"--this right after Nixon & the Watergate scandel--he won easily. The problem with Carter is he didn't do anything. He didn't try to stimulate the economy with tax cuts. He did nothing, but he held to his theme, he certainly never lied to us either. Then we had the Iran hostage crisis, that literally demoralized this country. Carter did nothing about that either. Since we could not obtain oil from Iran--we had lines of cars blocks long waiting to get to a gas pump. Carter just shrugged it off, & I'll never forget when he was asked about what he was going to do about it. Carter answered: "What do you expect me to do about it?"

Reagan was elected in a total landslide, winning 49 states. He immediately lowered tax rates to all. Our hostages were immediately released & after time, the economy came booming back. In fact, after Reagan initiated all of his policies--we sustained the longest economic growth during peacetime known to any President. His theme--was that the unemployed in this country could hold hands & reach across it. Reagan got it done. Millions of Americans still consider him the best President ever, including Republicans & Democrats.

Ironic-but the President before Reagan that gave the largest tax cuts to the American public to stimulate the economy was none other than John F. Kennedy. If either were alive today--they would not be pursuing this large so-called stimulus package that really isn't. Obama should follow JFK instead of doing a carbom copy of FDR. Franklin Roosevel--with good intentions I am certain, only succeeded in extending the depression into the great depression by his economic big government spending. It was WW2 that brought us out of the great depression.

 

[Dante]

yet we survived. the 70s were just a blip on the screen. people just like to whine

 

[xsited1]

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?

I remember it well. I was 26 years old at the time, & my husband & I were small business owners, (electrical contractors) at the time. We had 10% unemployment in the country--which is still considered disastrous. Work was extremely hard to find, especially in construction, just like it is today. There was, like today, too much available housing. We had overbuilt & a housing bubble insued. We had inflation double digit inflation over 10%.

Mortgage interest rates for fixed 30 year mortages were 18%. Short term interest rates even higher. Believe it or not you could get an 18 month certificate of deposit savings account that paid 18%. A 10% mortgage loan was unheard of--& first time home buyers with good credit & the ability to re-pay the loan was given out by certain localities--looking to stimulate the economy.

Carter rode in on his theme--"he will never lie to us"--this right after Nixon & the Watergate scandel--he won easily. The problem with Carter is he didn't do anything. He didn't try to stimulate the economy with tax cuts. He did nothing, but he held to his theme, he certainly never lied to us either. Then we had the Iran hostage crisis, that literally demoralized this country. Carter did nothing about that either. Since we could not obtain oil from Iran--we had lines of cars blocks long waiting to get to a gas pump. Carter just shrugged it off, & I'll never forget when he was asked about what he was going to do about it. Carter answered: "What do you expect me to do about it?"

Reagan was elected in a total landslide, winning 49 states. He immediately lowered tax rates to all. Our hostages were immediately released & after time, the economy came booming back. In fact, after Reagan initiated all of his policies--we sustained the longest economic growth during peacetime known to any President. His theme--was that the unemployed in this country could hold hands & reach across it. Reagan got it done. Millions of Americans still consider him the best President ever, including Republicans & Democrats.

Ironic-but the President before Reagan that gave the largest tax cuts to the American public to stimulate the economy was none other than John F. Kennedy. If either were alive today--they would not be pursuing this large so-called stimulus package that really isn't. Obama should follow JFK instead of doing a carbom copy of FDR. Franklin Roosevel--with good intentions I am certain, only succeeded in extending the depression into the great depression by his economic big government spending. It was WW2 that brought us out of the great depression.

Very well said. Jimmy Carter was viewed as a bumbling idiot. He still is. It appears that Obama is going to follow in his footsteps. Reagan came through and saved the day. It was bad, but we made it. I'm not so sure we'll make it this time with the Democrats in charge following a disasterous George W. Bush Presidency. There's just too much corruption and idiocy in office.

 

[Dante]

Very well said. Jimmy Carter was viewed as a bumbling idiot. He still is. It appears that Obama is going to follow in his footsteps. Reagan came through and saved the day. It was bad, but we made it. I'm not so sure we'll make it this time with the Democrats in charge following a disasterous George W. Bush Presidency. There's just too much corruption and idiocy in office.

a little late to be imbibing the koolaid, no? do you have the day off tomorrow?

 

[Dante]

most economic policies that a few years to be felt. Carter inherited the stuff from Nixon/Ford. Reagan's recession was a few years into office...he created his own mess. Clinton mopped up the Reagan.Bush mess.

Now Obama will make right the wrongs of another GOP idiot

 

[oreo]

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?

I remember it well. I was 26 years old at the time, & my husband & I were small business owners, (electrical contractors) at the time. We had 10% unemployment in the country--which is still considered disastrous. Work was extremely hard to find, especially in construction, just like it is today. There was, like today, too much available housing. We had overbuilt & a housing bubble insued. We had inflation double digit inflation over 10%.

Mortgage interest rates for fixed 30 year mortages were 18%. Short term interest rates even higher. Believe it or not you could get an 18 month certificate of deposit savings account that paid 18%. A 10% mortgage loan was unheard of--& first time home buyers with good credit & the ability to re-pay the loan was given out by certain localities--looking to stimulate the economy.

Carter rode in on his theme--"he will never lie to us"--this right after Nixon & the Watergate scandel--he won easily. The problem with Carter is he didn't do anything. He didn't try to stimulate the economy with tax cuts. He did nothing, but he held to his theme, he certainly never lied to us either. Then we had the Iran hostage crisis, that literally demoralized this country. Carter did nothing about that either. Since we could not obtain oil from Iran--we had lines of cars blocks long waiting to get to a gas pump. Carter just shrugged it off, & I'll never forget when he was asked about what he was going to do about it. Carter answered: "What do you expect me to do about it?"

Reagan was elected in a total landslide, winning 49 states. He immediately lowered tax rates to all. Our hostages were immediately released & after time, the economy came booming back. In fact, after Reagan initiated all of his policies--we sustained the longest economic growth during peacetime known to any President. His theme--was that the unemployed in this country could hold hands & reach across it. Reagan got it done. Millions of Americans still consider him the best President ever, including Republicans & Democrats.

Ironic-but the President before Reagan that gave the largest tax cuts to the American public to stimulate the economy was none other than John F. Kennedy. If either were alive today--they would not be pursuing this large so-called stimulus package that really isn't. Obama should follow JFK instead of doing a carbom copy of FDR. Franklin Roosevel--with good intentions I am certain, only succeeded in extending the depression into the great depression by his economic big government spending. It was WW2 that brought us out of the great depression.

Very well said. Jimmy Carter was viewed as a bumbling idiot. He still is. It appears that Obama is going to follow in his footsteps. Reagan came through and saved the day. It was bad, but we made it. I'm not so sure we'll make it this time with the Democrats in charge following a disasterous George W. Bush Presidency. There's just too much corruption and idiocy in office.

I am still in a state of shock over this so-called stimulus bill. Very little in tax cuts--& more pork than I have seen in my life time. Only a minut fragment of this huge bill is even to be spent this year. How is that an immediate economic stimulus?

The good news: I think this has finally awakened the "sleeping giant" of the American population. I am very happy to see Americans finally paying attention to governmental policy. Regardless if we agree on solutions or not--the American public is finally paying attention.