Facing the Fears of another Great Depression: Thoughts on how that Crisis Shaped Generations of My Family

During the past months as the financial crisis in the U.S has deepened, politicans, economists, and pundits have raised the specter of “another Great Depression.” Ben Bernanke's main credential for leading us out of this crisis has rested on his fame as a student of the Great Depression. Barack Obama's major test of leadership is already defined as whether or not he can lead us out of the worst economic downturn since the Great Depression.

But when interviewers actually talk to survivors of the Great Depression, the differences in daily experiences between then and now are sharply evident. Those who lived through the Great Depression speak of difficulties staying warm, or trying to pack nineteen people into a single house, or shipping children off to more affluent relatives because they could not afford to feed them.

Certainly the presence of a safety net in the form of unemployment insurance, food stamps, Medicaid and COBRA means that we are unlikely to see bread lines or tent cities unless things become much, much worse than we can imagine right now.

While many are quick to point out the stark differences in today's financial crisis and the crash of 1929 that turned into the Great Depression: 8-10% unemployment versus 25%, a loss of perhaps 7000 banks between 1930 and 1933 versus an estimated 1000 banks in danger of insolvency now, there is one striking parallel between that time of economic peril and our own.

The Great Depression saw a widespread reduction in the American standard of living that was not reversed until the postwar boom of the late 40s and 50s. Today there is also a widespread expectation among economists and the public at large that most Americans are likely to see their standard of living fall as taxpayers face a national debt that we and our children will be paying for the foreseeable future.

For generations, Americans have worked hard, not just in the hope, but rather in the expectation, that their children would have longer, healthier, and better lives than their own. Until this past year, many Americans in their 20s, 30s and 40s were enjoying a higher standard of living than their own parents, albeit at the cost of increasing debt loads and two-income households. That expectation is no longer a given for larger and larger sectors of the population.

But as I reflect on this prospect of a lowered standard of living, I find myself less afraid of than reflective about the future. In an odd sort of way, I feel a little bit relieved to be facing a reprieve from this endless cycle of expectation, of giving my children a higher standard of living than what they enjoy right now. “Do we have enough?” I ask myself as I also wonder, “Do we really need to strive for any more?”

Unlike most people my age, I am in fact the child of parents who came of age in the Great Depression rather than the great postwar Baby Boom. I was born at the very tail end of that boom, just as my siblings are part of its vanguard.

While I never experienced the hardships that my parents went through in the 1930s, their experiences shaped the way they brought me up and the expectations they set up for me.

I knew that my father, in particular, could not tolerate children who were fussy about what they were served at meals, a hang-over from days when it was the height of rudeness to refuse to eat whatever a family put on the table because it might be the only thing they had to offer a guest.

I felt a great deal of poignancy in finding a letter my mother wrote to her parents when she was a freshman at the University of Michigan in 1934, struggling to pay for books, and hoping that she could sell back her textbooks as quickly as possible to recoup what she had had to expend on them.

Sixteen years old and desperately homesick, she gave up the opportunity to get a college education away from home and returned to live with her parents and attend Wayne State University in her home town of Detroit. What part the family finances played in this decision remains a mystery to me, but the prospect of paying for tuition, room and board must have seemed an enormous expense to my grandparents who had never been to college themselves.

I do know that my father suddenly found himself the head of household at the age of eighteen in 1930 and that he worked very hard to make sure his five siblings went to college, or joined the military, or learned a trade. Even when they were all married and with children of their own, my father never stopped feeling a parental responsibility for his brothers and his youngest sister, Jean.

Since the weight of the Depression fell hardest on those with less education, it made my parents all the more determined to put their own children through college. In two generations my family experienced a huge boost in their standard of living that was almost exclusively due to education. My paternal grandfather arrived at Ellis Island in the 1890s with the expectation of learning a trade, and my mother's father had to leave school after the fourth grade to work to support his family. My parents were the first ones in their families to go to college, and for my siblings and our children, college has been a given.

Because of my parents' experiences during the Great Depression, I knew that our vacations would consist of trips to visit family or camping around the country and would rarely include a night in a hotel. Christmas gifts were plentiful but never included the latest “must have” toy; instead my father enjoyed the post-Christmas sales that helped him get bargain gifts for my January birthday, and once gleefully presented me with thirteen dolls because the sales had been too good to resist.

I remember when one family member came across a sign that said, “Eat it up, wear it out, make it do, or go without,” and told Dad that we had found his perfect motto. We joked about his penny-pinching ways, but his frugality allowed him to put four kids through college and help them get a good start in life.

So when I look at my own children and their friends and see the number of cell phones, iPods, video games etc. that they go through in a year, I find that a certain part of me is pretty much appalled at the materialistic excesses of the average American standard of living. I look around my own home with my kids' closets full of toys and the presence of five computers for three people, and that same accusing finger points right in my own face.

This is not to say that I want the doomsday scenario of another Great Depression to come true. Nor do I want people to lose their homes or their jobs or have to struggle to send their kids to college as a result of the current economic instability.

But it does seem to me that as the American consumers have put the brakes on their spending this year and started once again to increase the collective savings rate, there may be a silver lining in our financial woes.

If we start consuming less, perhaps we may find that we appreciate what have even more. And if our standard of living plateaus with this generation, we may find that we and our children can live quite well without always wanting more and more.

Just as the experience of the Great Depression profoundly affected the way my parents viewed money, today's economic crisis is likely to affect my own family and the ways that my children think about money and their own standard of living. They may find it harder to get a job that pays well or to afford a house, or they may make different choices about what they need to achieve a “good” standard of living.

What I believe won't change are the fundamental values that my grandparents passed on to their children, grandchildren, and great-grandchildren: the importance of education, supporting one's family, and the belief that you pay forward your own good fortune to the next generations. That's a legacy that can get you through the worst of times.