Tough Times

Tough Times

In 1975 I graduated from college. I didn’t know it then but the country was in the worse recession since World War II. When I look back its interesting how things have changed and remained the same.

I had just experienced all of the changes of the 1960s and was ready to grow up. But when I graduated from high school, even though there were more opportunities due to the civil rights movement, the choices were pretty much like today. You could go to work. But there were very few jobs. You could volunteer to go to the war (sign up for the armed services) or go to college. If you failed to get a job, maintain a 2.0 GPA in college, or got arrested, you were drafted and you went to the war. We had a different connection with society back then.

I remember that unemployment was at nearly 9% in the 1970s, and they were teaching us at college that 4% unemployment was normal and a good rate for the economy. I remember learning that it is the mix of taxes and interest rates that could determine the tolerable amount of unemployment. And 4% unemployment meant we had the proper mix of interest rates and taxes.

But with 9% unemployment not 4%, very few of my college friends left college with a great job in their chosen field. I ended up with a Social Science degree ready to help save the world but working in retail at a mall in Joplin, Mo. instead. This was sure not what I went to college for but at least I hadn’t died or been maimed in the war like so many others. These were not easy times.

Between 1973 and 1975 the prime interest rate hovered between 8.4% and 11.2%. As a college student this didn’t mean much to me. When I was in college there were no credit card companies throwing credit at unsuspecting students. Plastic cash, as we called it back then, was just a dream. ATMs hadn’t even been thought of. Instead we could look forward to going to the local savings and loan companies to borrow money at up to 20% interest rates.

In the 1980s and 1990s, 747 out of 3,234 savings and loans went out of business. In the 1960s savings and loans, known as “thrifts” started a ratings increase war that resulted in Congress regulating the rates they could pay on savings accounts. Thrifts are where most people would go for their savings, their mortgage, their car loan and their personal loans. Because of these new regulations people would move their money from the thrifts to investments where they could get a better return. Consequently, the “thrifts”, looking to maintain their profits came up with “creative” loans. By the 1970s the combination of loans, high interest rates and high inflation were too much resulting in the savings and loan crisis.

The savings and loans companies had to be bailed out at a cost of $87.9 billion. This seems like chump change compared to the bailouts of 2008 and 2009. But that bailout along with other factors like a big military build up lead to big federal deficits. (I challenge you not to take my brief historical explanation as the gospel. Check history and learn for yourself. And as a tease, see if you can name the member of the Bush family involved in the savings and loans crisis.) These were some sober economic times.

Just like today, U.S. foreign policy was casuing us many problems back home. As a young person trying to get started in the midst of the oil crisis and the hostage crisis, had to be just as difficult as it is for young folks today.

I remember having to get up before sun up just to get in line to get gas. Then because chivalry was still alive and well, I had to take my girlfriend's car to the gas station and stand in line some more. Those long lines and increases in prices were a shock.

Not just gas prices were increasing but due to inflation all prices were increasing. The price increases then were more devasting to my budget than any are now. Plus, I remember shortages of sugar, peanuts, and other foods just when I was having to buy all my own food. Then it was a fact that prices always went up. It was nothing like how we think today - that the prices will go down as the technology is accepted by more people.

Luxuries that my nieces and nephews enjoy now - like having your own car, flying anywhere, having a wardrobe versus just having some clothes, being able to rely on parents who have extra money, and the other extravagances that older folks think young folks take for grant - were unimaginable to me in the 1970s and early ‘80s.

As a result of happenings in the 50s, the 60s and the 70s, the late 1980s and 1990s were some good times.

With the beginning of President Regan’s term the hostages came home. The country built up the military, resulting in jobs, prosperity and less hassles from foreign countries. Even the Berlin wall came down and the cold war ended. It’s amazing how much of our consciousness the cold war occupied and now we don’t give it a thought. Now we do business with countries like Vietnam and Russia, sworn enemies.

By the time we completed President Clinton’s terms we had gotten used to peace and prosperity. But some how we forgot about the children of the hostage takers in Iran who now terrify us. We seemed to have forgotten that we all must be committed if we are threatened from the outside. We have to pay in taxes and with our lives. To me that means we should have the draft so everyone participates. Believe me things look different when you may have to die. We seem to forget so much of our history.

We really did have some difficult times when I was a young adult but we had some great propsperous times too. Blacks, women, gays and a host of others gained rights that nowdays we can’t imagine not sharing with everyone. We are concerned about the enviornment, animals and other people in a way that wasn’t thought of when I was a kid.

The Life Lesson

I have finally gotten old enough to be able to look back and see the cycles and I can say this too shall pass. And that’s the life lesson in this review of history.

I want young people to know that each generation faces it’s challenges. Each generation has it’s ups and downs. Just like you may be having it rough now, you will have some good times in your future. If you can just hold on to that hope and keep doing what you need to do to get from one day to the next, you will see that things do improve.

Life is ultimately good. It always flows forward, never backward and always toward good. The tough part is to hold on with faith during the tough times. But know that tough times don’t last, but tough people do.

Americans - we’re tough people. Hold on.