During the Great Depression, people faced joblessness and foreclosure, forcing them out onto the streets. They built shantytowns, derisively called Hoovervilles, because they blamed President Hoover for the financial disaster.
And today, we've got Bushvilles.
AP is reporting that the foreclosure crisis, and the rising unemployment rate, have caused a striking rise in homelessless. All over the country, tent cities are growing, akin to the Hoovervilles that sprung up during the Great Depression:
In hard times, tent cities rise across the country
From Seattle to Athens, Ga., homeless advocacy groups and city agencies are reporting the most visible rise in homeless encampments in a generation.
Nearly 61 percent of local and state homeless coalitions say they've experienced a rise in homelessness since the foreclosure crisis began in 2007, according to a report by the National Coalition for the Homeless. The group says the problem has worsened since the report's release in April, with foreclosures mounting, gas and food prices rising and the job market tightening.
Reuters reported a similar story back in December:
Tent city in suburbs is cost of home crisisBetween railroad tracks and beneath the roar of departing planes sits "tent city," a terminus for homeless people. It is not, as might be expected, in a blighted city center, but in the once-booming suburbia of Southern California.
The noisy, dusty camp sprang up in July with 20 residents and now numbers 200 people, including several children, growing as this region east of Los Angeles has been hit by the U.S. housing crisis.
The unraveling of the region known as the Inland Empire reads like a 21st century version of "The Grapes of Wrath," John Steinbeck's novel about families driven from their lands by the Great Depression.
Take a look for yourself. Here's a picture of a Hooverville from the 30s followed by a tent city outside Reno today:
Does this mean we're already in the beginning of our next Great Depression? Let's remember what caused the crisis of the 1930s:
The traditional explanation of a combination of high consumer and business debt, ill-regulated markets that permitted malfeasance by banks and investors, growing wealth inequality, and natural disasters such as the Dust Bowl and 1926 Miami Hurricane creating a downward economic spiral of reduced spending and production are also offered as alternative explanations.
How many of the above could be said about today's America?
* high consumer debt
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Outstanding U.S. consumer credit rose at an annual rate of 6.8% to $2.6 trillion in June versus 3.8% in May. Consumer debt jumped $14.3 billion, far above analysts’ estimates of $6.3 billion.
*high business debt
GMAC, UBS Short-Term Debt Costs Soar as Money Fund Breaks Buck
Short-term debt costs for GMAC LLC, UBS AG and Sears Holdings Corp. soared as the oldest U.S. money-market fund saddled investors with losses, sapping confidence in assets once considered among the safest.
*ill-regulated markets
Sept 2007: US bank collapse is largest in 14 years
August 2008:
9th US Bank Failure Of 2008Sept 2008:
U.S. bank giant Lehman to file for bankruptcyU.S. government announces AIG bailout plan
*wealth inequality
Income Gap Is Widening, Data Shows
Income inequality grew significantly in 2005, with the top 1 percent of Americans — those with incomes that year of more than $348,000 — receiving their largest share of national income since 1928, analysis of newly released tax data shows.
*natural disasters
- Hurricane Katrina
- Hurricane Ike
Add in the extreme volatility on the stock market during the past few days, an unemployment rate above 6%, the record low value of the US dollar, the record high price of oil, and the trillions of dollars this country has spent fighting an unnecessary war in Iraq . . .
We may need to rename the Great Depression. After all is said and done in the next 10 years, this "economic slowdown" will be the worst financial crisis we've ever faced.