In recent weeks, as the stock market has logged all-time highs, and leading economic indicators have suggested that the U.S. has nearly recovered from the Great Recession of 2007-2009, I’ve been thinking back to another recession — my recession — the recession of 1990-1991. I experienced it in New England, one of the harder-hit regions, but for much of the country, it was hardly a blip. Even so, it was a time that burned itself into my consciousness and permanently shaped my household economy.
The story started for me in 1988, the year I graduated from college. The week after commencement, I put down my pen and picked up a shovel. I’d had enough of book-learning — for the time-being. I wanted to work with my hands.
I found a job as a “carpenter’s helper — ” i.e., a laborer — for a developer who specialized in squeezing new residential buildings into tiny urban lots in Cambridge, Massachusetts. I didn’t mind digging ditches and moving lumber. It was good, honest work, and I liked the way my arms and legs ached with righteous exhaustion at the end of the day. But I had bigger ambitions: I wanted to learn how to build houses. The carpenters I met were like rock stars to me. They were confident, daring, and highly skilled. They’d mastered their craft to the point where they could tell hilarious stories over the roar of their power tools.
There were rough-in carpenters and finish-in carpenters. A few rare birds were equally skilled in framing and trim-work, but a carpenter’s character often dictated what kind of work he excelled in. A boisterous personality, a love of fast cars and motorcycles, a short attention span — these were the traits of many of the rough-in men I met; whereas the finish carpenters were often quiet, reflective, meticulous, and somewhat pent-up.
Cabinetmakers were a category unto themselves. Obsessive to the point of mania; perfectionistic; eccentric; often spiritual, if only in the worship of their arcane antique shop machinery — these, it turned out, were my brethren.
It wasn’t long before I was fancying myself one of them. And, in fact, I had the proper disposition for the work. I was a reader, a researcher, a questioner, someone who preferred the controlled environment of a woodworking shop to the imprecision and chaos of a building site. I liked making cabinets, and the local economy was booming. There was plenty of work, even for a neophyte like me. All I needed was shop space and a few tools.
Everyone was making money with real estate. An opportunity arose: how would I like to do a real estate project myself, building townhouses in the back yard of a Victorian house? All I’d need was a hefty downpayment.
It seemed like a sure thing to me, but some of my friends weren’t convinced. What if there were a downturn? What if I lost my income? These were economics majors, men who went on to do big things in investment banking. I’d be putting all of my capital at risk — and it wouldn’t even be mine! My father had agreed to loan me the money for the downpayment, a loan that was a stepping stone for a whopping mortgage at the going rate of about 14%.
But my friends’ objections seemed like nitpicks, the quibbles of naysayers, company men who were playing it safe by going to Wall Street. Whereas I was an entrepreneur! A double entrepreneur, thank you very much, if you counted my fledgling cabinetry business. Damn the torpedoes! Full speed ahead!
For a while, everything looked good. My little cabinetry business was growing. Plans for the new townhouses were moving forward. The real-estate market was red-hot…until it wasn’t.
Suddenly, houses weren’t selling as quickly. Soon, they weren’t selling at all. The market for custom cabinets dried up. My building partner, the man who had given me that first job as a laborer, suffered a nervous breakdown that had him wandering the streets late at night, chewing his ever-lengthening beard.
And there I was, in a house I couldn’t afford, scrambling to find work — any work — to pay the bills. I was severely overextended. My big Victorian house was a money pit. It was only through humiliating cash infusions from my father, who was stretched to the limit himself, that I limped from month to month.
“It’s a recession when your neighbor loses his job; it’s a depression when you lose your own.” People associate that saying with Ronald Reagan, who used it in his presidential campaign against Jimmy Carter, but it was actually something that Harry Truman said in the context of the recession of 1958 — one of the more severe of the forty-eight recessions, by my count, that the United States has weathered since its founding.
I experienced the recession of 1990-1991 as a full-blown depression, in every sense of the word. That difficult time taught me never again to overextend myself financially; to avoid debt like the plague; and to hope for the best, but prepare for the worst. These are lessons that I wouldn’t trade for anything.
The current economic recovery is rewarding stock market investors and homeowners, who are watching trillions of dollars of lost value slowly coming back. But there are millions of people still out of work; millions more who are underemployed; and countless citizens who have given up hope of ever finding a job.
For these people, the Great Recession of 2007-2009 was a full-blown depression with a capital “D.”
And it’s not over yet.
