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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

History lesson sounds familiar

Shawn Vestal

A historian says that comparisons between the current economy and the Great Depression are misguided.

The real parallels, Scott Reynolds Nelson says, are to be found in the crushing depression that preceded the “Great” one by six decades.

“In fact, the current economic woes look a lot like what my 96-year-old grandmother still calls ‘the real Great Depression,’ ” Nelson wrote in the Chronicle of Higher Education. “She pinched pennies in the 1930s, but she says that times were not nearly so bad as the depression her grandparents went through. That crash came in 1873 and lasted more than four years. It looks much more like our current crisis.”

Nelson, a professor of history at the College of William and Mary, wrote that the 1870s crash, which started in Europe, arose from a housing boom that saw mortgages become more widely available and land values rise steadily. Complex investments built around the housing boom collapsed and rippled through the American and European economies.

Most people suffered, but some of the very rich did very well, snapping up stocks and buying out companies at rock-bottom prices.

“The Gilded Age had begun,” Nelson wrote.

Things are tough all over

Everyone’s got a different idea of frugality.

New York magazine recently put together a series of tips intended to save the average resident of the Big Apple more than $488,000.

Among the suggestions, with annual estimated savings:

Drink at dive bars: $3,467

Send kids to public school: $23,625

Spend $14 instead of $104 for six haircuts: $540

Spend $45 instead of $110 on a monthly one-hour massage: $780

Take advantage of big deals on real estate, like the 975-square-foot apartment with terrace now listed at $1.49 million – a savings of 25 percent.

Pocketbook sites

Membership at social finance sites such as Mint and Wesabe.com is booming, as people look to develop fiscal discipline in uncertain times. The free sites provide forums where users discuss spending habits and solicit feedback, as well as interactive tools for budgeting and finding good deals, according to the Chicago Tribune. Useful spending patterns emerge, because the sites are linked to users’ accounts and provide summary information – though individual accounts remain anonymous and secure.

On the Web: Find previous Everyday Economy coverage packaged with these stories at spokesmanreview.com.