The forecast/commentary to the right (written in mid-May) appeared — as you’ll remember — in MOTHER EARTH NEWS NO. 34 (the July-August 1975 issue of this magazine). And, despite the stalwartly optimistic words on the economy now emanating from Washington, we see no good reason to change a single comma or period of that July-August report.
The Economic Recession of 1975
Nor are we alone with this feeling. Julian M. Snyder — in a July issue of his excellent economic newsletter, International Moneyline ($15.00 a month from International Moneyline, Westport, CT) — flatly predicted that there will be no meaningful or lasting upturn to mark the end of the current economic ecession (which is the worst we’ve experienced since the 1930’s). And in the July 15 World Market Perspective ($96.00 annually from ERC Publishing Co., West Vancouver, B.C., Canada), J.F. Smith fine-tunes that thought even further. Smith–who, back in February of 1973, was one of the first economists (if not the first) to call today’s worldwide financial mess an “inflationary depression” and has been predicting planetary economic turns with amazing accuracy ever since — says:
There will be a continuation of the pickup in business activity that has now begun. And there will be temporary euphoria. However … any strong, sound business advance from current depressed levels will be aborted. It will run head-on into a brick wall of price increase.;
This “forecast”, by the way, was already coming true before Smith published it … and not just in the United States, as a news article from Costa Rica’s July 11, 1975 Tico Times proves. Headlined “Inflation Turns ‘Dream Project’ Into Billion Dollar Nightmare”, the story told how “uncontrolled inflation” had forced ALCOA to “regretfully withdraw” from the development of an integrated mining and processing project that would have made Costa Rica, the major aluminum producer in all of Latin America.
The abandonment of such projects, of course, is very good for the long-term interests of the planet. The trend, then, should be applauded by everyone who understands the for immediately switching all the countries of the world from their current “growth at any cost” methods of operation to steady-state economies. There’s no other way to ensure that this generation’s grandchildren and great-grandchildren will have a planet to live on.
Despite that silver lining on the far horizon, however, we’re the ones who — during the next few years — must live under the monstrous, boiling, black thundercloud which is now forming as the hot economic air mass of the past collides with the financial cold front of the future.
The worldwide economic storm is just beginning and definitely will not be anything like the little rain squalls we’ve occasionally experienced since the end of World War II. Despite the few isolated sunny weather breaks we’re bound to have as the typhoon sweeps over us, the economic recession ahead is going to be big and tough and it’s going to last a long, long time.
Batten down the hatches and don’t be tempted to open them the first or second time the clouds part and a ray or two of sunlight peeps through. The hurricane that’s gathering will last longer than you’ll live. But if you’ll take the proper precautions and keep your head down, you can still enjoy a long and a full life.
Beware of Pollyannas who spout that “the recession has bottomed, inflationary forces are almost wrung out of the economy, and we can expect healthy growth once again by fall”. It just ain’t that easy to expand a nation’s — or the world’s — economic base anymore and, even if it were, too many’ people now know that such growth — in real terms — is very seldom healthy.
Leading European and Japanese economists are beginning to suspect that current economic troubles might well be a prelude to a greater worldwide downturn coupled with yet another round of steeply rising prices.
Even some U.S.forecasters (see William Wolman’s Economic Diary in the May 26 Business Week) have begun to hint that we may be in a “staircase recession”, a slump that falls, levels off, then falls again. All while inflation continues to eat away at the value of paper currency.
MOTHER EARTH NEWS FORECAST:
Meat, oil, automobile, and other key prices will go up again this fall, pulling still more prices up with them. Unemployment will remain high for months. More giant corporations will have to be bailed out of financial trouble. More and more people will demand that the government “do something to get this country moving again”, and actions taken in response to the plea will continue to do more harm than good. Expect the squeeze on older people and others living on fixed incomes to tighten, despite increases in social security and other such payments. Expect crime to rise. Expect the quality of life, in general, to fall during the months ahead.
THE U.S. ECONOMIC OUTLOOK;
Just as Walter Prescott Webb predicted 25 years ago (see The Plowboy Interview in MOTHER EARTH NEWS NO. 32), Western Man’s 450-year-long expansionary binge — which was fueled by cheap, plentiful energy and other resources — is now drawing to a close. And, just as predicted, the industrialized nations of the world are having a difficult time understanding what is happening to them. The sooner our “leaders” realize this and begin converting the world’s countries to a steady-state economy, the better.
Still, there’s no need for you to wait until those leaders wise up. The time was never better for you and your family to make the necessary conversion on your own. If you haven’t already done so, learn to become as food and energy self-sufficient as possible and do it. Strive, also, for economic self-sufficiency: Learn a basic trade or set up a home business that will always be in demand and which you or your family can control. Pay off all bills. Tear up credit cards. Put yourself on a pay-as-you-go basis. Stock up on quality tools and books that will help you live better for less by growing your own food, building the things you need, etc.
It seems a certainty that we’ll all be walking a tightrope between potentially catastrophic economic busts and just as potentially catastrophic booms during at least the next ten years. Those who insulate themselves best from our “modern, interdependent” way of life will probably fare best during the roller-coaster ride ahead.
And what if the worst of either extreme — boom or bust — doesn’t come to pass? Great! You’ll still be ahead of the game as you enjoy the satisfactions of self-sufficiency and independence. Economic virtue — even in “normal” times — is its own reward.