Major banks facing insolvency, rapid growth in unemployment, frozen credit markets, exploding government deficits; what else can happen? The University of Indiana news room put out the following headline: “Bedbugs are back.”
Apparently there has been an outbreak in the U.S. and globally of the reddish brown insects that attach themselves to mattresses and bite us in our sleep that we know only from the short poem our grandmothers may have said to us before we went to bed. According to the report bedbugs were nearly eradicated in the U.S. after World War II, but they have made a comeback, spread by increasing world travel.
Is there anything we can learn from this?
Just this. We often assume in this modern era that we are immune from certain things. Things that we have relegated to the history books. These things could be diseases like leprosy, infestations of bed bugs or depressions, bank runs and hyper inflation. Perhaps some of these things may still exist in the third world, but not in the West.
But guess what, these things happened before and many of the protections we put in place to prevent them from happening again have been lifted—because we are so much smarter now. Right?
When some analysts compare our current financial crisis to the great depression, it is often dismissed as hyperbole. But often the arguments that our economy is on more stable ground then these doomsayers believe don’t seem based on facts, just the notion that it just couldn’t happen in this day and age. One analyst shouted back at a so called doomsayer a few months back that during the depression unemployment was 25% and today is it only 6.5% (at the time).
Of course we don’t count all the unemployed people today. The alternative unemployment figures provided by Shadow Government Statistics does not exclude so called discouraged workers and probably is more in line with the methodology used back in the 1930s. Check out their chart.
