A couple months ago, I read an article called, “What the Great Depression Did That This Recession Won't“. It's a fascinating article comparing two of the biggest economic crisis's of the last 100 years: the Great Depression and the recent Great Recession.
While the author, Morgan Housel, was right to point out it's still too early to see the lasting ramifications of the recent recession, we can already see what effect it's had on our behaviors. And according to Housel, little has changed. Savings rates are still low and personal bankruptcies are climbing.
It was virtually unheard of for people to go bankrupt in the 1930s. Rather than file, people would sell off all they owned, deplete their savings, ask relatives for help and/or find more work. Today, there is fare less stigma attached to bankruptcy. Go to bankruptcy court and suffer a few years with poor credit and then you're good to go.
During the Great Depression, there was much more ownership for ones well-being and for ones success. Today – that thinking has shifted to blaming institutions (banks, etc) and has become more of an “I deserve this” mentality.
I also think there is something else at play in all this too: the slide toward greater and greater individualism.
Now, I'm all for individual freedom – and discovering our innermost desires and pursuing these (in the pursuit of happiness). But, something important has gone lost through the generations: family and interdependence. Note that during the years preceding up to and shortly after the Great Depression – divorce was still uncommon. Families were sticking together. Faith was also an important factor in daily life. People were a part of a smaller community that helped and looked after one another.
During the Great Depression – most everyone was in the struggle together and they helped one another through it. (Charlie has written about these important factors in a previous post called, “How People Survived the Great Depression“)
While the difference in severity of the two crisis' is of note – let's hope to learn from these times and grow more financially independent and personally, interdependent.
Why do you think we continue to go back to our “old ways” OR do you see a change in behavior as a result of the Great Recession?