IS THE U.S. HEADED FOR DEPRESSION?

Some say it is the declining value of the dollar; others blame drought, oil prices, and the mortgage crisis. No matter who or what you blame, the certainty is that the American economy is in crisis. Despite appearances and rhetoric, the depth of the crisis confronting Americans and the world go deeper than many are willing to admit. While economic pundits and politicians are finally using the word “recession,” there are those who are beginning to think depression.

This past weekend we went grocery shopping at the largest retailer in the area, one that is the largest worldwide. What became immediately clear was that there were many wholes in the shelves which, on any normal Saturday morning, would have been stocked to overflowing. In addition to our normal bag of flour having risen from $2.99/5lb. bag to $4.99, it was clear that this commodity was in short supply. The same was true for rice, eggs, meats and many other staple products. The shelves were certainly not bare, but the gaps and low stock was clearly evident. While this could have been attributed to late deliveries, concern rose the next day when a friend went shopping at a different chain and found a similar situation; jacked prices, no flour, little rice and obvious gaps in product stock.

There is no question that rising fuel costs are having a dramatic impact on food prices and availability. Reports are aired everyday about the soaring costs of staples. The truck driver rally in Washington, D.C. could not help but go unnoticed by the media as the plight of drivers worsens. Still not sure how widespread and how deep this problem had reached; I conducted a very informal survey of various writer groups nationwide. Being an author and always watching the world around me for ideas, it seemed that members of such groups would also have their fingers on the economic pulse in the areas in which they lived. I sent a survey to numerous groups and asked what they were seeing at the stores in terms of prices and product availability; whether they were going alter their purchasing habits; if they were going to buy more or less consumer goods; how they would spend their “economic stimulus check;” the price of gas in their area and if they were going to change their eating, driving and shopping patterns. The results, which are being verified by growing news reports on the economy, are frightening. One cannot help but wonder if some of the events that led to the Great Depression of the 30’s are being to be repeated. In the late 1920’s there was overproduction, a growing gap between rich and poor, a large increase in foreclosures and large stock investments by those who were really on the economic margin. Does this sound familiar? Given attempts by the Federal Reserve, Congress and even businesses to try to stimulate consumer buying, are we in a situation where a silent desperation pervades those in the economic know?

The survey spanned the nation. Writers in both cities and rural areas from the East Coast to Alaska to the Mid-West responded. While I will not report every response, I will show the nature of most responses along with some interesting quotes and thoughts from those who sent in the survey. The following are typical responses (by the time this article is published I am sure the numbers will be a little out of date-I am sure they will all be higher):

“Yep, seen it, experiencing it here in farmland rural Pennsylvania where cow manure has become THE fertilizer - the only one that won't bankrupt. Feeding a household of five including two always hungry teens, it's glaringly obvious things are going downhill. Our cupboards are dwindling to the barest of bare necessities. Our veggie
garden is doubling this year and I'm checking into a chicken coop. Has anyone seen the price of eggs? Eggs for crying out loud! They more than quadrupled in price in just a few weeks here.
I read somewhere that 25% of the US grain has been taken for alternate fuel possibilities - can't find it again and have to ask if it's true? If so, whose stupid idea was that? Don't take it from existing supplies, make it. I'm thinking maybe my hubby isn't so nuts in busting his behind running his mother's grain farm along
with his full time job this year. I may pitch in. I've got family in all areas, farming (grain and livestock), trucking, construction, and I've seen how all of it is being hit.”

“I'm tacking on some things that worry me. I came from California where I made a decent wage. When we moved to TN a few years back, housing was much cheaper here than CA, but that was about all. Everything else was equal, food, clothing, cars, etc. Gasoline was still a little cheaper.
Wages here are 1/2 of what people make in California, and very few companies provide any type of medical or dental insurance. I was shocked to learn that the job I'd done for over 23 years in California required the completion of a master's degree in TN, which I do not have, yet the salary was 1/2 of what I made. They would not allow me to apply, even though my qualifications were a perfect match for the job.
The typical wage here is $8.00-10.00 per hour. My husband is a truck driver for a local company and makes $14.00 which is considered high. Of course, his company provides no insurance or extra money towards such. I noticed today that gasoline has climbed another 2 cents to $3.57 and diesel is $4.72. Already my husbands company is cutting back on runs and trying to combine them, so we're very worried about our financial future. I wonder how people who make $8.00 can afford the fuel to get to their job. Basically they are working to buy gas to get to their job...where will the money come from for all their other expenses. It's very scary.
It just ticks me off beyond belief that we are paying over a billion dollars a day for a war, borrowing money from China and our economy is going down the toilet, but President Bush, when asked will still claim that we're in good shape.”


“I live in south central Kentucky where nothing is close. Driving is a necessity. If gas prices get much higher, we are thinking of getting an Amish cart and training one of our horses to be driven. It would take all day to get to town but we could go to the convenience store.
We still have good availability of products but the prices are going up in the supermarkets. I no longer buy beef. Instead I have a friend who raises Black Angus cattle and we split a cow. I have a friend who is raising sheep so I will probably buy a couple of the lambs. I shop at the Amish bulk food store in the county and save a lot over the supermarket prices. I will be eating fresh veggies all summer, grown in our garden or those of my neighbors. Gas prices are $3.59.9 for regular as of last Sunday. Over $4 for diesel! I combine errands and don't leave my farm unless I have more than one place to go in the same direction. We are eating out less.
We are planning on saving the stimulus check. Just an aside, my daughter-in- law is in retailing in NYC and she says we are in a major depression. People are just not buying.”

“In the Seattle area, wild salmon is going for $19.99 a pound, gasoline at
Costco $3.65 at the regular gas stations $3.79 a gallon. People here are
driving less, eating out less, and purchasing food at the lower end stores
such as Grocery Outlet and Cash and Carry. We were in a huge Asian market
one week, rice stacked up as high as an elephant's eye. Now just try to find
regular rice - many of the people here are purchasing rice to send to
relatives overseas.
Unfortunately, I am a volunteer driver for Catholic Charities - IE, I haul people who don't have transportation to the doctor - so have little control over my gas consumption. I drive 700 to 900 miles a week so buy from 30 to 50 gallons a week. They supposedly pay us for our gas used, but are consistently six months or so behind in updating their prices and the past six months have been the worst ever.”


The following are snippets of responses from around the country. It is evident that people are frustrated and even frightened. While products are available, the current trend in prices is continuing upward. Recent reports indicate that state governments are cutting back on budgets and employees; tourist destinations are already feeling the pinch and more and more storefronts are displaying “space for rent” signs. Since many plan on reducing driving, this summer does not bode well for that industry. Agriculture reports show late plantings of corn and wheat crops and who knows what summer weather will unleash. It is clear from U.N. reports that the food situation is rapidly declining in poorer nations as droughts and floods destroy staple crops. I am sure many of the comments that follow are a mere shadow of what is beginning to happen in your area as well:
I used to be able to buy a pack of chicken breasts for $3 or $4, now the same pack is $7.
I traveled to Spartanburg where gas was $3.29/gal (middle grade). When I got back to ATL to fill up, it was $3.49/gal. Last weekend, I paid $3.69, now it is $3.79 or $3.89.
Saturday is usually a busy day in Fayetteville, but there were no cars in all five lanes at one of the busiest intersections. Some of the independent stores had no cars in parking lot and it looked like they were closed.
How will you use your economic stimulus check? Put it in savings
Gas $3.74 Rockford, IL
Prices, though? Meowza! They are up, and rising!
But am I buying what I don't really need? Not on your
life. Not with heating oil where it is, and climbing.
I'm trying not to take unnecessary trips, and I'm certainly not
eating out very often. I'm using my old lawn mower, which I had
thought about replacing this spring.
I haven't noticed any shortages except the "sale items," but prices have definitely increased.
I have received mine (stimulus check) as a direct deposit, and it will stay in the bank. I don't plan on buying anything new, just my usual necessities.
$3.89 for medium grade
I haven't noticed a decrease in the availability of basics, but prices have risen considerably here in PA--this includes basic such as eggs, flour, butter....
Eating and shopping will all be dependent on what I can afford. I anticipate, if the prices keep rising, having to forgo some of the necessities.
in SE Michigan. Prices, however, are another story. Eggs have doubled, milk, dairy products skyrocketing. Good beef cuts (steaks, prime roasts, etc.) are a rare buy in our household these days because they are so expensive. Fish/seafood products are also beyond reach as a steady diet.
Save those left-overs and use them as part of a creative low-cost menu for tomorrow's dinner.
Get caught up on a bill or two and treat ourselves to a gourmet (home cooked) dinner.
$3.65/gal
Less frivolous foods, the munchies, you know. Bulk peanuts and fresh raw veggies make good inexpensive snacks. 86 all the packaged crap. Drive only when and where necessary. Make a list. Plan a driving session in a well-routed circle that accomplishes several chores in one outing. Planning for a vacation now includes high on the list, "how much will it cost in gas to get there and back?" Shorter trips/destinations if you are driving a car.
I've noticed the prices skyrocketing - quadrupling in a matter of weeks for some things like eggs... A lot of what I used to get I can't find local anymore.
It will go toward an alternate heating source, most likely a wood burner in the basement.
Last I looked, diesel was $4.59 a gallon and today's local report said low grade is now $3.62.
Anything we do over the summer will be local, no major travel.
Rural farmland in the mountains of Pennsylvania where the cost of living is very low and so is the average family income.
I am concerned about stories on the news about Sam's Club and others
rationing rice. Is there a rice shortage?
I live in Arizona in a town between Phoenix and Tucson. There is no real public transportation in my area, and, with summer temperatures going well into
the triple digits for about 4 months of the year, riding a bicycle really isn't an option.
Let's face it. The American people are getting hosed by greedy speculators who are driving the price of oil, (hence food prices) artificially high.
I don't blame people for not buying. Prices are going out of sight. Yesterday, gas here was $3.79 and I bet it's up from that today.
Food prices are up varying percentages, from 15-percent to nearly 50-percent on many less expensive cuts of meat. Hamburger (80 percent lean) has risen from about $1.99 per pound a year ago to nearly $4 per pound
Overall, my daughter said the supermarket tab here for her family of four has jumped from about $130 per week to nearly $200.
Also, shortages of some products are starting to become apparent, with some shelves bearing large gaps in mute testimony to lack of availability of rice and flour…
Hope that helps
As to gas prices: Spokane, WA prices range from $3.50 to $3.70. I live in a small town where our one station is $3.87 for unleaded. More to the point, Diesel in Spokane that has more effect on food prices is about a dollar higher at $4.50 to $4.80.
Unfortunately, I am a volunteer driver for Catholic Charities - IE, I haul people who don't have transportation to the doctor - so have little control over my gas consumption. I drive 700 to 900 miles a week so buy from 30 to 50 gallons a week. They supposedly pay us for our gas used, but are consistently six months or so behind in updating their prices and the past six months have been the worst ever.


So what does all of this mean? The early warning sign are there and I would strongly suggest that people keep an eye on commodity report, climate calamities, and, of course, the price of fuel. There is little doubt that people will be tightening their belt, going out for meals less, traveling shorter distances and using their “stimulus” checks to keep their head above water this summer. Living in a region that depends on fuel oil, it is scary to hear that contract prices for hearting oil less winter will approach $4.00/gallon. This will surely collapse to the economy in the Northeast. If diesel continues to rise, truckers will be at a loss and food will simply not be delivered to stores. Already, many truckers who deliver saw logs are calling it quits. How long can fishing fleets absorb continued price rises? Summer employment looks bleak. The key is to be alert and be informed.

Is there is bright spot here? If you read my article, “The Mother of All Course Corrections,” you will see that the consumer is now in a position to finally make intelligent buying decisions. You can affect what is produced with your valued dollars. If you stop buying the junk food, stop buying sodas, buy only healthy foods and cereals, the market will have to respond. This is your opportunity to finally make a difference in terms of what is produced and what you consume. Insist on quality and use your power to create a more sensible, sustainable economy. The time is at hand for choices, choose wisely!