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Guest Post: When Economic Recessions Become "Social Recessions"

Monday, August 16, 2010, 8:59 AM
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by Charles Hugh Smith

This post is one in a series from respected guest commentators while Chris is at work on his new book. Please welcome them to the PeakProsperity.com community and enjoy the fresh perspective.

At some point, economic recessions trigger social recessions.  Individual expectations and behaviors slowly gather the momentum to change cultural values, social relations, and the way entire generations think about key issues such as opportunity, security, prosperity, government, family, and the relative importance of money in life.

Those of us who know people who experienced the Great Depression have some glimmerings of how social recessions change people's attitudes and values.  Two examples come to mind:  My grandmother had small savings accounts in multiple banks; clearly, she didn't trust the idea of having one's nest egg in one bank.  And my uncle said that just having a job with a steady paycheck after World War II seemed like heaven.  (He'd served in the 8th Air Force in Europe, surviving a 50% casualty rate for B-17 crews.)

But we don't need to turn back the clock 65 years to view a social recession; there is a real-time one playing out in the world's second largest economy:  Japan.

 

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