America faces new Depression misery as financial crisis worsens

Mike Harvey in Sacramento


By the wide stretch of the American River in Sacramento, history is repeating itself. Here, during the Great Depression of the 1930s, men and women who had lost everything and despaired of finding work built rough shelters and huddled around fires.

Now the spiral of job losses and house repossessions has left another wave of Americans homeless, and a new tent city is growing rapidly on lumpy, derelict land between the river and the railway tracks here in the capital of California.

There are more than 300 people living in scattered encampments stretching a couple of miles along the river bank. As many as 50 more arrive each week. Unemployment in Sacramento reached 10.4 per cent in January and California is suffering some of the worst repossession rates in the country, with as many as 500 people losing their homes every day last year.

Charity workers in the city can no longer cope with the number of people coming to them for help. The shelters are full, with one home that caters for women and children turning away 200 people a night.

Joan Burke, director of advocacy for the homeless charity Loaves and Fishes, said: “The folks we deal with typically are the working poor. But right now the economy is in such turmoil that it is affecting a new layer of middle-class earners - construction workers, farm labourers, retail workers, restaurant staff.

“People who have earned good money but have not got any savings are finding out about the reality of being just one or two pay cheques away from becoming homeless.”

Jim Gibson, 50, arrived at the tent city four months ago. A construction worker, he had been employed in the Bay Area around San Francisco for 32 years without ever giving any thought to finding the next job.

Most recently he had a job on a site in Sacramento and found a rented apartment to live in. When he lost the job six months ago he quickly went through the little savings that he had. He moved into a motel room, but with no jobs to be found he was forced to begin selling his possessions - including his tools.

In the end he spent his last $30 on a one-man tent and headed for the burgeoning tent city. “Never in my wildest dreams did I think I would end up here,” he said.

Inside his tent is a neatly folded set of spare clothes, a sleeping bag and blankets. He has nothing else: all his family photos, the possessions of a lifetime, have gone. “I sold them or gave them away. Where could I keep them?”

A widower, Jim has five adult children living locally - but he will not tell them where he is. “They don't know, and I am not going to burden them. In part it is my pride, but they are also just one pay cheque from joining me here.”

Yesterday Jim joined his new friends, Genaddiy Tomashov, 57, and Anthony, 32 in a makeshift communal tent. They sat on plastic chairs around a fire, with a cooking pot suspended above it. In a corner of the structure, which lost its roof in high winds and torrential rain last week, were piles of tin cans and bottles of water donated by the local food bank. They keep each other company and, when they have money for a bus pass, they go off in search of work. From time to time a local business pays $35 for a five-hour stint holding a sign on the street.

They see four or five new tents springing up each day. Yesterday Ronn Harrison, 46, turned up with a sleeping bag, and $8 in his pocket. A carpenter who had come out of a state alcohol rehabilitation programme last year, he had moved in with his father in Fresno, but could not stay there. He has worked two days since last August. “I have had to downsize my way, all the way out here. There was nothing left for me to do,” he said.

There is no sanitation and no running water in the tent city and, while Jim's area is as neat as possible, elsewhere among the blue Tarpaulins there are growing piles of rubbish and rotting food. Although Sacramento has a Mediterranean climate, days of heavy rain recently turned much of the site into a quagmire.

On the other side of the railway tracks, towards the city centre, Loaves and Fishes provides showers and a midday meal for 650 homeless people a day. The charity is campaigning for the city to provide a “safe haven” for the homeless, with proper facilities and garbage disposal.

Sister Libby Fernandez, executive director of Loaves & Fishes, has seen the tent city grow from a few individuals a year ago into a big problem for city officials. The dome of the State Capitol, where the California Governor Arnold Schwarzenegger conducts his daily business, is visible from the levee by the river where she parks her golf cart whenever she visits.

Sister Libby estimates that out of a population of 500,000 in Sacramento, there are 2,000 homeless in shelters across the city and another 2,000 living on the streets or in tent cities, either hidden or out in the open. “Camping outside is illegal but the authorities cannot move on so many people. In any case, they have nowhere else to go.”

Jim said that, while he was confident he would get out of the tent city, he was not sure when. “California has been living in the fast lane all these years. I took my job for granted and all of the sudden the recession hit. I never thought building would stop, but it has. People weren't ready for it.

“This is the bottom of the barrel.”

Depression déjà-vu

— The Great Depression was triggered by the New York stock market crash of 1929. It was the longest and harshest depression yet experienced by the industrialised Western world

— By late 1932 US stock values had dropped to 20 per cent of their previous worth. By 1933 11,000 of the US's 25,000 banks had failed and unemployment was at 25 per cent. Industrial production declined by 47 per cent and GDP by 30 per cent. The effects were felt around the world

— The recovery began with President Roosevelt’s New Deal programme in 1933, which ushered in a government-regulated economy, as well as reforms in industry, agriculture, finance, waterpower, labour and housing

— The British decline stopped soon after the gold standard was abandoned in 1931, but recovery did not begin until the end of 1932

Source: www.britannica.com