Back in the early-1990s, I saw comedian John Pinette at a comedy club. If you know John, then you know he is a hefty guy. Half of his act was making fun of his weight and food. One joke that was particularly funny was how the Russians would stand in line for four hours to get bread. He then progresses to say “that must be some good bread.” At the time, it was funny primarily because it was about our previous arch enemy Soviet Russia. But, I am not laughing too much anymore as we are seeing bread lines in the United States.
These aren’t the bread lines last seen during the Great Depression; it is the modern day version called food stamps. It isn’t even stamps anymore. Each recipient gets an electronic card, much like an ATM.
I saw an alarming quote from the CEO of Walmart today (hat tip Zero Hedge).
I don’t need to tell you that our customer remains challenged…You need not go farther than one of our stores on midnight at the end of the month. And it’s real interesting to watch, about 11 p.m. customers start to come in and shop, fill their grocery basket with basic items – baby formula, milk, bread, eggs – and continue to shop and mill about the store until midnight when government electronic benefits cards get activated, and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher.
The number of folks receiving these benefits is rising rapidly. In fact, it is reaching levels on par with the bread lines of the 1930s. Right now, we have over 40 Million people on food stamps. It may not impact us like the bread lines of the Great Depression, but the net effect is the same.
This economic downturn certainly hasn’t been as deep as the Great Depression. Our economy only shrank 4% whereas the Great Depression saw a 25% haircut to economic output. When it comes to people needing assistance with food, the Great Depression has nothing on this downturn.
I don’t think any inferences can be drawn about us double dipping or getting back to normal from this graph, but it does show that this downturn has been tragic for millions of people. Let’s hope we can get back to laughing about bread lines, and the food stamp numbers shrink drastically.