Will current economic downturn mirror the last real recession of the ’70s?

by Patrice Sarath, February 5th, 2008, 5:07 am

While pundits argue over whether the recession is already upon us or has yet to start, I remember the last one.

 Not the early 2000s, or the 1980s, or whenever people like to say the last recession was. Those weren’t recessions. Those were minor dips. Those were market corrections. Those were nothing.

 I mean the 1970s. The big one, when it was more comforting to call it a recession even though it really looked more like The Great Depression.

 Here’s what happened in the 1970s. My dad — like a lot of other dads — lost his comfortable white-collar job. He got a job driving a home heating oil truck. He was lucky.

 My mom — like a lot of other moms — had to find work. She got a job as a lunch lady at the elementary school. She was lucky too.

One of the advantages my parents had — and by extension their children — was that they were not afraid of hard work. They had lived through the Depression after all, and they had lived through World War II and they knew what it was like to scrimp, save, and salvage. That plus a pretty impressive garden carried them — us — through. But it sure wasn’t easy and it sure wasn’t fun.

So now it’s 2008. Once again, the go-go exuberance of Wall Street has led to a serious worldwide economic downturn. Sound familiar? The decade leading up to the 1929 stock market crash was the Roaring Twenties. What will they call the decade leading up to 2008? The Naughty Aughts?

People are worried that this is a recession? I’m worried that, with the economic news coming in from all over the world about banks and financial institutions caught in the subprime mortgage crisis (see the Bloomberg link, above), stock markets dropping everywhere, and the US Fed chairman lowering interest rates in what seems like a last-ditch effort to stimulate the economy, we’ve got more than a recession on our hands.

 Better start planting those gardens.