The Great Recession: There Will Be Hell to Pay!

This ain't the Great Depression that my Dad and his family suffered through (My Mom and her family survived those years quite well because her father was a yard conductor with the New York Central Railroad, in the Collinwood Yards of Cleveland). But it is significant and unlike anything that I have lived through. Two things that I learned the other day brought this point home to me.

One of my students is writing a short research paper on the impact of this recession. She told me that she had been laid off from a $70,000/year job--making torpedoes at a Greater Cleveland Westinghouse factory. She said to me, "I can't even find a $10.00 per hour job now!" If she could find a full-time job paying 10 bucks per hour, she would make about $20,000/year. Of course, there aren't many jobs like that because employers who pay such slave wages try to keep you under full-time so that they don't have to pay any benefits. This woman has returned to our community college to retrain. She is in her 40's and finding it very difficult.

Talk about hitting a brick wall! From a good full-time salary with benefits, vacation, and health care . . . to zilch, nada, nothing. Imagine the blow to one's family and one's self-esteem, not to mention one's mortgage, credit card bills, and just the everyday needs of living.

Another story I heard yesterday: a man in his 40's from Ashtabula, Ohio, with 3 kids (9, 7, and 5 months) was laid off from his job as a trash collector (yes, even the trash companies are laying off!). He has lost his job and now his house is being foreclosed. I know this hard-working fellow. What is he going to do?

One of my close relatives has narrowly avoided a foreclosure with a "short" sale of his home. He lost his house, but, thank God, has landed on his feet. We were not going to let him and his family be destroyed and left homeless. We will take care of our family and friends.

But what of those who are not close family or friends? What happens to them? And what happens when a problem is so big that even if we want to help we can't? I think of two of my old friends from Euclid--brilliant people with college degrees and significant skills. They both have been laid off from jobs more than once and live almost hand to mouth with gigantic chronic health problems (serious type-1 diabetes and its side-effects). They live off of multiple part-time jobs, no benefits, no health care. They work harder than most people with full-time jobs.

Our society is failing, and there will be hell to pay!

The Annihilation of Home Values in Cuyahoga County

Today's Plain Dealer has a story showing the astonishing annihilation of home values in Cuyahoga County, Ohio's largest county. In a table showing home sale prices for 2007, 2008, and 2009, we see that almost all cities within the county have lost value as measured by home sales. And in some cases, the losses are unbelievable. It is as if the city and county had been bombed by a nuclear weapon or destroyed by volcanic eruptions or earthquake.

Here are some examples. In 2007, in Euclid, my home town, the city where I grew up, the average price of homes in 2007 was $108,250 (197 units)--an incredible bargain. In 2008, the average was $59,450 (198 units). And so far in 2009, with 235 units sold, the average is $33,700. The value this year is less than 1/3 of the value two years ago.

Other inner-ring suburbs of Cleveland show similar or worse losses. In East Cleveland, the value of homes went from $25,700 in 2007 to $4750 in 2008 to $3988 dollars in 2009. These figures are almost beyond belief.

Here are the figures for the city of Cleveland: 2007: $62000; 2008: $17,000; 2009: $17000.

There are a few prosperous suburbs where the decline has been less precipitous (with even a small rise in home prices from 2008 to 2009 for Westlake).

It's hard to know what to say about this. Cleveland and Cuyahoga County and the surrounding metropolitan area are in deep, deep economic depression!

[The story on home values in Cuyahoga County begins on p. A-1 of the Cleveland Plain Dealer for Sunday, May 31, 2009. The home value chart is on p. A-12.]