The media is telling us that we are entering a global recessionary period and that major things are already going to fail, and that the process will feed back on itself and the whole world economy may soon accelerate into a major depression. I have no way of telling how true any of this is but in today’s Financial Times, Robert Reich, former US secretary of labor under President Bill Clinton and now a professor of public policy at the University of California at Berkeley, who must be as well-informed as anyone, seems to think we are on a precipice of global economic disaster.
What bothers me so very much about this potential financial crisis is that it isn’t being caused by a fundamental shortfall of a necessity of life, like food, oil, copper or physical catastrophe or even a man-made one like war. If our governments and financial institutions can’t keep the economy functioning smoothly, or at least within livable bounds, when the basic environment is still benign, what hope is there for humanity when a real problem comes along? And I am being no prophet when I claim that really serious problems will certainly come along sooner or later and very likely within the working life of young adults now in college.
If this depression is to be like the one of the 1930s, and who’s to say it isn’t, if they don’t know how to stabilize the economy when things are easy, then we as individuals had better prepare for a multi-year period of very difficult times. I don’t even know where to search for how people actually got through the Great Depression. There are lots of beautiful pictures of people taken during that desperate time, but that doesn’t begin to convey how those people fed themselves, got homes for themselves and found work which could provide for these things. There are also sad stories of how rich people suffered, and a few of them were reported to have committed suicide because they lost everything. That probably happened a few times but it is not to be taken seriously as a general response, because given a couple of months it has been shown that people can adapt to almost anything survivable, and return to their basic level of happiness and self-worth, even after a horrible loss.
Given a few months how could an average person prepare for, say five years, of a major economic depression? I don’t suggest a survivalist strategy of going out into the woods and living off the deer and skunks. That is very difficult to do even in good times like we presently live in, and so very few people actually do it. Watch Les Stroud’s Survivorman on TV, where an experienced outdoors guy confronts the wilderness, to see just how difficult it could be for anyone. The best bet will be to remain within civil society and have a valued and paying role within that society. In this scenario it might be best if it were a relatively low status and low paying job because you wouldn’t want to lose it. Or perhaps you might be better off having a very minimal residence all paid for, or these thing provided virtually free as part of your job or legal ownership. The point is to have as close to zero expenses as is humanly possible so that your only expense is getting food and heating for your hovel, if that’s all you can afford. Another strategy would be the “Rich Dad” one, where you somehow get a number of people working for you, doing some very small thing, but a thing which gave you a small percentage which was enough to cover your necessities.
Of course it is better to simply be rich so you can buy your way out of anything, and by rich I mean totally solvent. I definitely don’t mean having a giant credit card debt, owning a mortgage on a huge house and half of a big fancy car, thirty miles from your job and with several kids in private schools. That isn’t rich in this view, but rather into total debt to the man and absolutely poor. A person in that situation is as much a slave as one of the ancient ones, and just as trapped and in the desperate scenario of a great depression very much at risk for total stripping of everything he has, including his family as he loses his bank-owned possessions and can no longer support them.
While the economy is great get absolutely debt free, then work up your status.