The Worst Hard Time

I’ve been reading The Worst Hard Time by Timothy Egan. Egan takes the reader into the dust bowl world of the Oklahoma-Texas panhandle, southwestern Kansas, southeastern Colorado and eastern New Mexico. The wealth of the earth was overproduced then the plowed ground was allowed to go fallow. The winds came and blew the dreams and aspirations of thousands of homesteaders, ranchers and businesses away. Today the winds of financial markets are blowing through the accumulated wealth, or debt, of an overvalued market. Driving around the Arkansas Valley during the last week I didn’t see any visible signs of this paper cloud. I attended a class reunion that included a high school homecoming football game, a veteran’s parade, a tour of my high school, and a banquet with my classmates. We shared memories and some of the pain of life. In a sense it was a healing experience of leaving some of the baggage behind and realizing that not everything is accounted for in the balance sheet of the economy.

I cleaned the screens and window sills on my house yesterday, get it done before winter. They hadn’t been cleaned since the windows had been installed sometime in 2007. There was dirt, dust, cobwebs, and dead insects between the screens and the windows. Perhaps this market fall is the cleaning of the screens of an overheated economy. But people don’t know what to do. The pundits don’t know what to do. I do not know what the future will bring.  But there are similarities to our situation in an earlier eight-year period. I look back to 1964-1972. LBJ engaged in a guns & butter economy, fighting the Vietnam War and proposing the Great Society. He couldn’t pay for both (and continued by Richard Nixon). What we got in the 1970s and early 1980s was the first fuel crisis, stagflation, then double digit inflation, double digit interest rates, and double digit unemployment.

In 2001 a war was forced upon us, but we didn’t treat it as real war time, economically. President Bush wanted Americans to go shopping. And he and Congress followed that advice. Again, guns and butter were purchased with a national credit card. President Bush received the authority to engage in a second war in Iraq with no commensurate increase in taxes to pay for it. The country incurred the loss of considerable wealth after 9/11. The economy rebounded but this recovery was based upon credit and, eventually, some of it bad credit. This process had to come to an end. And now people are paying the price for over indulgence both for a spend thrift government and a highly leveraged populace. For many it may indeed be their worst hard time. Even though we can’t see the dust cloud approaching, these winds of change are moving faster than both political parties can rewrite their talking points.

From My Corner of Main Street & Beech in Rocky Ford, CO

Dr. K