Economic Depression: Survival?
September 25, 2005 2:50 AM   Subscribe

Surviving the Depression Years: what strategies worked during the last depression? Would they work with the next depression? What adaptations would be required? Are there new avenues for successfully surviving a depression?

Ya just know the day of reckoning is coming for the G8. What will we do?
posted by five fresh fish to Work & Money (14 answers total) 2 users marked this as a favorite
See my askme post here.
posted by banished at 8:58 AM on September 25, 2005

The ultimate answer is to become more self-dependent. I'm not necessarily talking about moving to Kansas, and living in a shack in a field with a herd of cows, but everyone can become a little more self-dependent in some way. Buying assets, reducing expenditures, learning survival skills, becoming fit and strong, etc.

These things won't particularly help the economy or a country as a whole, but in terms of personally surviving a depression, developing some self-dependency skills will go a long way. In the long term, save (some) money, and buy foreclosures when it hits. Cash out on recovery.
posted by wackybrit at 10:28 AM on September 25, 2005

Response by poster: I guess I was looking more for things like "farmers will probably do okay, but software programmers are going to starve to death."

Making a boodle of money would be nice, but I think survival is going to be the bigger picture.

I'd be mighty upset to lose my home, go hungry, etc. There must be ways for one to prepare in a way that lessens the risks.
posted by five fresh fish at 12:05 PM on September 25, 2005

You could start gardening. It's relaxing, too. You could learn how to can the extra vegetables you grow.

This assumes you don't live in an apartment, but some communities have gardens where you can rent a decent sized plot.
posted by jefeweiss at 12:10 PM on September 25, 2005

Basic hand-sewing, knitting, and crocheting skills can go a long way. I've heard plenty of depression-era stories about people taking apart old worn-out clothes to make new ones.
posted by heatherann at 12:21 PM on September 25, 2005

Get a job in law enforcement, mortuary services or healthcare. Those ae all relatively depression-safe (in the case of law enforcement it will boom during a depression).
posted by m@ at 1:33 PM on September 25, 2005

Basic hand-sewing, knitting, and crocheting skills can go a long way

That's not going to be much of an issue in any future depression. In the 30s, textiles were much more valuable than they are today. They represented significant hours of labor and skilled work. Today, we've got cheap foreign synthetics and each of us owns many more pieces of clothing than our ancestors. In fact, there is a ridiculous abundance of dirt-cheap or free clothing in the U.S. -- so much so that most of what goes into those Goodwill bins is sold as rag to developing countries for recycling into new fiber products.
posted by Miko at 1:48 PM on September 25, 2005

I've been trying to live more self-sufficiently for a while, not because I'm waiting for another Great Depression, but because I like to feel prepared for the worst. I was raised to think like this; both of my parents grew up dirt poor. One fled communism and raised me to think ahead to the worst case scenario. Plus, with the news lately it seems like a good idea to be prepared.

First, I moved out of my apartment into a cheap house with a sunny yard. It is also within walking distance to my job and two bodies of water. Although both are not clean enough to drink as they are, one will probably be good enough for washing and watering the garden.

I've learned to sew my own clothes both by hand and with a machine. I also do basic sewing repairs. I'm learning to be more handy and have a good stash of tools thanks to my dad. Right now I have a bartering system with my friends for food and helping hands. Hopefully it could be something to rely upon in a time of need.

Good mechanic skills kept my family afloat during hard times. We were able to save money on repairs and make money by fixing and selling old cars. With the current scale of American suburbs I can't imagine cars going away anytime soon.

I now supplement my diet with home grown fruits and vegetables. It will not be enough to live off of completely, but produce can be expensive and everything tastes better from the garden. I'm learning more about what grows well in my yard and seasonal rotations. Right now it stands at:
Early Spring: spinach, sweet peas, scarlet runner beans, mesculin
Late Spring: strawberries, dill, rosemary
Summer: carrots, tomatoes, basil, cucumbers, florence fennel, sunflower seeds
Fall: beans, squash, onions

I save extras with canning and preserves. I also bought a book identifying edible wild plants and have been sampling the offerings at the local park. It is full of enough mulberries, purslane and pokeweed (don't eat it raw!) to help in case of dire need.

I have a little bit of extra money and I'm planning on stocking up on rice, canned goods and water. If things get really bad I will raise rabbits and laying hens (legal in my city!). I've had enough childhood farm experience to raise them and kill them if I have to. My yard is quite small, but there is enough room for them and a garden.

If there is a total collapse, then I'm probably toast, but I'm trying to be ready for some lean times. I don't think I'm being paranoid; I live a normal city life. I'm just trying to recover some of the skills my parents and grandparents had.
posted by Alison at 2:09 PM on September 25, 2005 [1 favorite]

Joe Kennedy - President John's father - read the signs of the imminent stock market crash of 1929 and sold out. He was widely reviled by others who ignored the signs and were bankrupted. They apparently thought that Joe had insider knowledge that he did not share. Others preferred suicide to financial ruin and literally defenestrated.
Having one's financial house in order would be helpful. Those who gamble on the stock market, buying on margin etc, are most likely to be caught short. After the 1929 crash, the banks foreclosed on many a small farm or other mortgaged property. This enabled those who were wealthy enough to be secure from the crash to buy valuable properties at tax sale prices - thus increasing their wealth when the country recovered. They owned the farm land that was purchased by developers for housing tracts and shopping malls.
Those who have a home mortgage plus time payments on cars and appliances plus college loan repayments plus credit card debt will realize that they are owned by banks.
posted by Cranberry at 2:44 PM on September 25, 2005

You can make tomato soup by adding water to ketchup and cooking.
posted by dial-tone at 2:58 PM on September 25, 2005

> QUESTION: Can one identify any groups of people that actually did well during the Depression?

JAMES GREGORY: Well, the story of the Depression is always told in this monochromatic form, that everybody suffered, everybody worried, nobody had a good (sic) time. That's wrong. The conventional distribution of opportunity worked something like this: About a third of the population suffered unemployment and difficulty. About a third of the population maintained their standard of living, and another third of the population did better in the course of the 1930's than they had done before. It stands to reason; no economy puts everybody out of work; no economy stops entirely. This one had some very vigorous elements.

If you were in the radio industry, you were doing very well in the Depression. Your investments were multiplying. Hollywood did very well. A lot of new businesses were starting and prospering. In general, people who had white collar or professional jobs had fewer problems. Unemployment difficulties were less. Blue collar workers tended to lose jobs the most, so depending on where you started at, depending upon luck, this could be the best of years, not the worst. And there were huge fortunes made in the Depression.

There are probably reams of money to be made during a downturn if you're capable of (say) buying out mortgages or failing businesses. The service economy will grow, with cheap labor, so businesses that are labor-intensive will actually have a shot at doing well. Savvy financial investments -- banking, insurance -- will also be potentially as lucrative as ever, although you'll want to be suitably diversified. Professionally, it would probably behoove one to have management experience. Freelancing is probably going to be a growth area, too, so if you're inclined in that direction -- can handle the risk/reward ratio -- you could potentially continue to make a good living.
posted by dhartung at 5:33 PM on September 25, 2005

Response by poster: If Alison pulls through okay, so will I. Got all those basic skills and more.

Gotta work on owning the house outright. We're okay on all other fronts, I guess.
posted by five fresh fish at 5:36 PM on September 25, 2005

The secret is lentils. Lots and lots of lentils.
posted by leapingsheep at 7:12 PM on September 25, 2005 [1 favorite]

Prepaying a variable rate line of credit might be a good idea. Prepaying your fixed rate first mortgage is not really a great strategy.

First, houses have high inherent carrying costs and municipalities might increase property taxes to a crushing extent. You're never really free of homeownership cost.

Second, cash in hand can be easily diversified among investments and hedges you far better against unemployment and underemployment than does home equity, especially if home equity lending collapses or tightens credit requirements so that you can't get a line exactly when you need one (i.e., you lose your job.)

Third, banks essentially have no discretion about accelerating loans. They can only foreclose on you if you haven't paid for months, and the only time that would actually happen is if you couldn't sell the house first at at least the mortgage balance ... i.e., the bank would have to sell at even worse price to a speculator. You then rent your own house, or a nearby house, right back from the same speculators, at a rent which is probably half the mortgage you were paying before.
posted by MattD at 9:13 PM on September 25, 2005

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