Monday, December 29, 2008

Happy New Year!

I’m finally back, but barely… least it would seem so….. as my blog will soon be moving to a different venue. When my URL changes, I’ll post that change here.

This has been ‘the winter that was’ for our family, one we’ll always remember. After surviving an as yet unnamed virus that laid me low for the entire summer and fall, it could only get better. Or so I thought. Then came reality. My youngest brother suffered multiple heart attacks, requiring some hospital time, an angioplasty and stent. A couple weeks later, my hubby had the same procedure for the same reason. Three days after that, I had surgery for a hernia and torn abdominal wall, apparently caused by all the retching and heaving during my prior illness. Almost immediately after I returned home, my older brother’s wife came down with what she thought was the flu. Ha! When she started upchucking black bile, off to the hospital she was taken.

During emergency surgery, a growth was found, growing from her appendix. This growth had twisted her intestines so that nothing could pass through. The surgeon removed the growth and appendix and all was well. Or so we thought. She developed breathing difficulties due to a rapid fluid build-up on her lungs, and her condition was not good at all. Their daughter, a nurse who lives in Illinois, made a quick trip to Iowa to check on her Mom. Once here, she started deep breathing exercises at once, which the hospital had been remiss in starting immediately after her surgery. What a difference those exercises made! Sister-in-law was finally able to come home the day before Christmas and is doing well. Today our grandson had hernia surgery and is doing fine.

Needless to say, we will gladly bid adieu to 2008! It has been a year of loss on many fronts, from the death of loved ones to the demise of some relationships along the way. Although we enter 2009 with very little in the way of expectations, hope is still very much alive. As The Greater Depression comes to pass, we try to make intelligent decisions in changing our spending habits. Purchasing big ticket items has been put on the back burner for now. Even allowing for the huge price cuts, that new Ford 150 will not be coming home with us just yet. Instead, we will be using any budget surplus to pay down debt and build our emergency fund.

Given the current news, and assuming you all understand that our economy is in seriously deep kimchi, it would probably be redundant for me to keep posting about The Great Depression of the 30’s. It’s enough to state that the parallels are astoundingly similar, right down to the fact that Wall Street, Mortgage Brokers and Bankers were at the center of that storm, too. Be careful who you read and/or listen to and take advice from. Don’t panic and try to not get depressed, even though your retirement account has probably taken a huge hit. We’re all in this together and together we’ll survive it. It’s a great opportunity for an economics lesson for your families, and it’s a lesson that’s been needed for a very long time. Who amongst us hasn’t squandered resources we shouldn’t have? It’s time to learn from our mistakes and the mistakes of others. God is still on His throne, and the sun still rises in the east and sets in the west.

‘Till we meet again, I wish you a Happy, Healthy New Year! I'll be back next year!

Friday, October 24, 2008

Only Yesterday I

Most of the following information was taken from the book, Only Yesterday, by Frederick Lewis Allen. His book, an informal history of the 1920’s, starts with setting the stage for the market crash of 1929. He covers the era from the end of WWI to the aftermath of the crash. The information in this book stays with you long after you’ve read the last page, and almost haunts you during the events we’re now living through. I can’t begin to tell you how often I and other readers refer to it during conversations regarding our present economy. If I had read no other books dealing with this era, this one alone would make me realize that as a people, we have learned nothing when it comes to greed and wanting more. The term, keeping up with the Joneses, must have been born during this era and is still alive and well today.

The decade after WWI and leading up to the crash of 1929, was a very prosperous one for America. As morals declined, our appetite for material things grew. Of course many new products were made available, from cosmetics to refrigerators to telephones. Automobiles were now available in various colors, theaters prospered as movies replaced game nights at home, and independent storekeepers struggled to hold their own as department and chain stores multiplied. This was supposedly the era of Coolidge Prosperity, and during the three years between 1924 and1927, there was an increase from 75 to 283 Americans who paid taxes on incomes of more than a million dollars a year.
There is a saying in financial circles: “Liars figure and figures lie.” How true this would soon prove to be! While figures lied about prosperity, the government and big business not only bought them, hook, line and sinker, they were the author of many of them. The figures said that the purchasing power of Americans was increasing at the rate of more than 2% annually. The figures showed corporation profits and retail business jumped by leaps and bounds. The common stock of RCA, or the Radio Corporation of America, grew from 85 ¼ in 1928 to 549 in 1929. Who could deny that times were, indeed, good?

Installment buying became huge as people were starting to believe it was old-fashioned to limit their purchasing to only the cash they had on hand. All the experts, from the great economists of the day to the U. S. Treasury Secretary to Presidents Coolidge and Hoover, promised that prosperity was here to stay. And as stocks skyrocketed so did investor speculation. So it was that Americans began to gamble with their futures. The game of advertising knew no bounds as its agents persuaded people to buy, buy, buy. No longer was it considered enough to recommend one’s goods in modest and explicit terms by placing them on the counter and letting the consumer make up his or her own mind; advertising was the new way to compete. And so the aggressive advertising agents consulted with psychologists, used poetic eloquence and ran pushy, national campaigns to ‘break down consumer resistance.’

Pity the poor salesman who didn’t meet his quota, a new device meant to increase sales and to punish the poor sap that didn’t. Never before had such pressure been exerted on salesmen to get results, and if he didn’t reach his figure, he could lose his employer’s favor and maybe even his job. All sorts of trickery was in vogue and totally acceptable given the fervor of the day to sell more, more, more. Afterwards, a sales manager for The American Slicing Machine Company told of how his company had ‘asked each employee to appoint a child in his family as a mascot, realizing that every one of them would work his head off to make some youngster happy at Christmas. The way these youngsters took hold of the plan was amusing, and at times the intensity of their interest was almost pathetic.’ The sales manager of another company reported cheerfully that one of his stunts was ‘to twit one man at the good work of another until he is almost sore enough to be ready to fight.’

Still another company invented – and boasted of – a method of goading its salesmen which for sheer inhumanity probably set a record for the whole era of Coolidge Prosperity. It gave a banquet at which the man with the best score, (sales), was served oysters, roast turkey, and a most elaborate ice; the man with the second best score had the same dinner but without the oysters; and so on down to the man with the worst score, before whom was laid a small plate of boiled beans and a couple of crackers. Of course, this pressure to sell trickled down to the consumer who felt the pressure to buy.

Frederick Allen cited two extreme examples of high pressure selling: A wholesale drug company offered to the trade a small table with a railing around its top for the display of specials; it was to be set up directly in the path of customers, ‘whose attention will be attracted to the articles when they fall over it, bump into it, kick their shins upon it, or otherwise come in contact with it.’ And the publication, Selling News, awarded one of its cash prizes for 'sales ideas’ to a vendor of electric cleaners, (vacuums), who told the following story of commercial prowess. One day he looked up from the street and saw a lady shaking a rug out of a second-story window. ‘The door leading to her upstairs was open. I went right in and up those stairs without knocking, greeting the lady with the remark; “Well, I am here right on time. What room do you wish me to start in?” She was very much surprised, assuring me that I had the wrong number. But during my very courteous apologies I had managed to get my cleaner connected and into action. The result was that I walked out minus the cleaner, plus her contract and check for a substantial down payment.” The readers of Selling News were apparently not expected to be less than enthusiastic at the prospect of a man invading a woman’s apartment and setting up a cleaner in it without permission and under false pretenses. If you could get away with such exploits, it helped business, and good business helped prosperity, and prosperity was good for the country.

As I’ve studied this era in our history, I have to wonder if consumer cynicism was born immediately after October, 1929. And yet……., we still have the inept, pushy salesmen. Some are door-to-door, but most are in car lots and appliance and/or furniture showrooms. Then of course we have the big box stores that stack their inferior merchandise high and leave little room in the aisles for maneuvering even a shopping cart, much less a wheelchair. (And they wonder why so many of us shop on-line!)

At any rate, this is a small slice of the atmosphere leading up to the crash. I would especially like to spend some time on the decline of the morals of that time, but no one would want to read it. There are SO MANY comparisons to be made between the era leading up to the crash and the times we live in, I would be writing for hours. And since most people have the attention span of five minutes or less, I’ve already exceeded my limit. Be back in a few days with more true stories of that time. If any of you have heard memories from your parents or grandparents of life during the Great Depression or the Great American Dust Bowl of the dirty thirties, please send them my way. Thanks!