Akkam’s Razor

Yesterday was one of the few times my wife engaged me on politics and economics. (If anything, she usually chastises me for being too interested). She plainly asked me what’s going on and what it means for us. She asked if I thought it would be like the Great Depression, with people out of work, waiting in line at soup kitchens. I reflexively answered yes, and then spelled out my rationale.

After having the time to reflect on the question, my answers, the bailout, and the landscape as I see it, I can now say that I may have been wrong.

A little less than two weeks ago, we buried my maternal grandmother. A stubborn, strong-willed woman who dealt with the loss of two husbands, one shortly after being married, and the other comparatively young (in his 50s, with her outliving him by some 30 years). She had lived through the Great Depression and World War II, as one of a large family, all living in a cramped Port Richmond (Philadelphia) rowhome. Of her siblings, she was the only one to graduate high school. Many of the other dropped out, some as early as grade school. The rest went to work; the men went to war. They all returned home, and every single one was gainfully employed in solid blue-collar employment, all had homes, cars, and took vacations. Every single one of them, with the exception of my Babci (Polish for grandmother) was a stay-at-home mom.

Several years ago, we buried an aunt, one of my grandmothers siblings. She had apparently been the family’s photography enthusiast. She documented many family gatherings. That little row home was always full of friends and family (some of those pictures rotate as headers on this site), even through the Great Depression. Perhaps they weren’t destitute - film and developing wasn’t cheap. At the same time, maybe they were disciplined. In any case, in the most beautiful photo album that I saved when we were cleaning that aunt’s house out, many vacations in Atlantic City, in “the country” - which at the time was probably 20-minutes away, and many, many house parties were well documented.

Maybe cities were well structured to handle economic despair. Port Richmond, like most of Philadelphia, was a manufacturing mecca. When I think of the employers of the men in that house, some of them worked for what were then household names (but now are memories). Having a large number of siblings also certainly helped with “the bills”, and of course, there was no Cable-TV, internet, cell phones, nor a need for everyone to have a car. Even when looking at period photos on PhillyHistory, it is hard to see the Dustbowl, soup kitchens, and suffering. Maybe its because they were already in a near-ethnic ghetto. Maybe those who lost were those who had gained in the Roaring Twenties, those that already had something.

In looking at the current scenario, the equality gap has shifted to the right. Those with the most have gotten the most. If anything, the cost of their wealth gains has been the increase of costs for those below them. In the last decade or so, health insurance costs have doubled, energy has nearly quadrupled, and inflation has exceeded increases in income. If it weren’t for our investments in the stock markets through our various retirement vehicles, I’d say we already suffered. Maybe we, the lower middle class will be fine? Maybe the middle and upper middle classes will be those that suffer, with their gains being evaporated. Even though that trillion-dollar bailout will likely do-nothing, and will severely tie the hands of the next President, maybe our inability to accumulate real wealth means we have very little to lose?