Elizabeth Warren on the coming collapse of the middle class

[Vekseid]

The Coming Collapse of the Middle Class

It's a long video, but lots of nummy data.

I don't think she's right that the middle class will completely collapse, as there is a way to end-run around the situation people are being faced with and it's already beginning - people sharing homes, buying cut-price land and forging new communities, and so on. For all the disaster we are currently facing, I don't think the immense social knowledge we have acquired is worth nothing.

[MercyfulFate]

I have heard this, and with jobs gone and most likely not coming back, most "Middle Class" may backslide into being lower class. I can see it happening.

I didn't watch the whole thing as my attention span won't allow it, however I found a quick summation in writing:

http://www.mymoneyblog.com/archives/2008/05/the-coming-collapse-of-the-middle-class.html

"Earning More
Starting around 1970, more and more mothers started working full-time. How did this affect finances? Household income indeed went up from 1970-2000 from ~$40,000 to ~$65,000. However, the inflation-adjusted income for employed males actually went down slightly. So the increase was entirely due to the additional women working.

But hey, households are still earning more. Good, right? Next, she crunched some data on what a dual-income, 2-kid family spent their money on in 1970 vs. 2000.

Spending Less
We actually spend less on an inflation-adjusted basis on many things nowadays:

32% less on clothing
18% less on food - including groceries, eating out, and yes, even Starbucks
52% less on appliances
24% less on car expenses, per car
Spending More
Not so fast, we also spend more in many areas:

76% increase in home mortgage payments . Surprising, the actual house size didn’t grow that much based on number of rooms (5.8 vs. 6.1). I wonder if this would hold true if it was based on square footage, however, as my research on that indicates a big increase in size.
74% more for health insurance, even adjusted for healthy family with employer-sponsored health plans.
52% more for cars, since now we have more cars per household. We gotta get to work, right?
Infinite% more for childcare
25% more in effective tax rates, due to higher income
In 1970, credit card debt was 1.4% of annual income for the median household. In 2005, it is 15%.

Education
Finally, we spend a lot more on education. In 1970, you needed a high school diploma to get a good job, which took 12 years of government-provided schooling. Nowadays, the average family pays for 2 more years of pre-school, plus 4 more years of college, all out of pocket.

Net Result: Not Good
Note that the cheaper things are the smaller, more flexible expenses… while the more expensive things are the larger, more fixed expenses. So a family now earns a bit more, but also spends a much, much larger percentage of their income. So much, in fact, that now we need both of those incomes to afford everything we buy. If either spouse loses a job, the family falls behind. Studies show that a family with children has between double and triple the bankruptcy rate of childless households"

[RubySlippers]

I would argue you want to know whose fault all this is look into a mirror. WE vote and WE should have voted better people in that is a start.

As I see this some of the problem is people living over their needs and wanting stuff they don't need but want. Take simple tech like cellphones I get they are are nice but there are cellphones that are PHONES with maybe texting to PHONES that are portable microcomputers - does everyone NEED the latter? Houses lets be frank after WWII most homes had two bedrooms, one bathroom and were modest. In the latest boom the people really didn't want just comfortable basic housing but lots of frills in a good proportion of cases.

Education we gave up on strong vocational education tracks for the mess we are in, and not expect all children to go to college and have ramped it up as a society even a bachelors is becoming passe'. Lets be frank here if you take out the bottom 40% of performers in school due to natural aptitude limits, they should not be going to college over maybe at most an associates. If the school and programs are generally well regarded. I think its sick we take say the bottom 335of performers in what is critical college academics and expect them to do more than get a job after school. So that is not just our fault its businesses fault and the education system and the government. If you have a child that is likely better off training ina  field like culinary arts and hospitality services in high school why not focus much of their education on that. In Florida we have a high dropout rate usually due to  expecting more of students that are low performers and are not being taught anything remotely useful.

Now to turn to the government they have allowed our companies to get away with sending our good factory jobs overseas for years, and so regulated the businesses here as to hurt their competativeness. The fact most are bogged down offering health care is an added problem they are here to make money, to produce goods or services they should not also have to worry about that or environmental regulations or other things not involved in business proper.

That's all for now.

[Rhapsody]

Take simple tech like cellphones I get they are are nice but there are cellphones that are PHONES with maybe texting to PHONES that are portable microcomputers - does everyone NEED the latter?

With the current emphasis on social networking, plus long distance fees to keep in touch with family and friends across the continent, it's far cheaper to get a mobile package that includes texting than it is to use other methods.  Hell, I'm a stay-at-home mom who recently purchased a cell phone for emergencies and when one of us has gone out, and I pay less than $50 a month for texting, mobile browsing, extended evening hours, extra daytime minutes and the dialtone.  Nothing exactly out of my means.

What's killing me now is groceries.  My income is the same as it has been for a long, long time... yet, since they just raised the minimum wage in my province, the price of just about every kind of food has gone through the effing roof.  I can't get a 3lb bag of apples for less than $4.50.  Potatoes in the bigger stores are cresting 8 bucks per 10lb, and sometimes per 5lb, bag.  Pork's cheap, but that's because of the whole swine flu issue.  Let's not even talk about bread.  Four-loaf packages for about $7 is one of the better deals I can find, if it isn't day-old storemade loaves at a nearby deli for 99¢, which isn't always available.

Rent is stable.  My light and phone bills are stable.  It isn't the cost of living that's hurting my wallet.  It's the cost of eating.

I try not to live too far outside my means, and we only pick up things for ourselves every now and then; the kids get treats more often than we adults do in my household.  Then again, I'm lower class, not middle class.  So maybe the demo-economic spread is a bit different for me.

[Morven]

Take simple tech like cellphones I get they are are nice but there are cellphones that are PHONES with maybe texting to PHONES that are portable microcomputers - does everyone NEED the latter?

Phones, it's just one of those things that you've steadily got more for the same money over the years.  I bet you today's iPhone and plan is no more expensive in relative, inflation-adjusted terms than the phone bill 30 years ago.

Houses lets be frank after WWII most homes had two bedrooms, one bathroom and were modest. In the latest boom the people really didn't want just comfortable basic housing but lots of frills in a good proportion of cases.

Won't argue with that part.  IMO, we need to get out of this sick obsession with housing and real estate; it's damaging, hugely so.  And it makes the kind of people rich who I do NOT want to support.  (Note: if you live in the house you own or are making payments on, you are not really any richer no matter what the paper value of that house has risen to.  You need one, so if you sold this one you'd just have to buy another.)

[Torch]

Phones, it's just one of those things that you've steadily got more for the same money over the years.  I bet you today's iPhone and plan is no more expensive in relative, inflation-adjusted terms than the phone bill 30 years ago.

Perhaps, but it's an additional expense over and above the landline phone. We all have additional expenditures that we didn't have 30 years ago. I remember (as I suspect you do) living a perfectly happy life before cellphones, cable and satellite TV, and the internet were all invented. These three things alone add an additional $100 to $200 per month expenditure to the average family's budget.

For some people, that can mean the difference between eating and not eating.

Won't argue with that part.  IMO, we need to get out of this sick obsession with housing and real estate; it's damaging, hugely so.  And it makes the kind of people rich who I do NOT want to support. 

I'm not following you. Why does someone else's investment in real estate merit your 'support'?

Even with the economic downturn, real estate is still a good investment when it's done wisely and with long term results in mind. Buying property without a cent of equity and expecting a quick return is foolhardy, as so many folks have found out the hard way.

[Morven]

Property speculators, rich landowners, realtors, bankers ... they're generally rich enough.  They're the ones making out big on increasing housing prices, not the regular people who are hoodwinked into thinking that their house valuation going up is a good thing.

And look how much they have their hands and mouths in the trough of government subsidy, hoping for a revival of that gravy train again.

[Torch]

Property speculators, rich landowners, realtors, bankers ... they're generally rich enough.  They're the ones making out big on increasing housing prices, not the regular people who are hoodwinked into thinking that their house valuation going up is a good thing.

And look how much they have their hands and mouths in the trough of government subsidy, hoping for a revival of that gravy train again.

Well, fortunately, you don't get to decide who is "rich enough". I certainly wouldn't want anyone pointing fingers at my bank account and telling me, "Sorry, but that's plenty for you." And I doubt you would either. After all, to someone in Bangladesh or Ethiopia, your net worth would be on a par with Bill Gates.

And since when is capitalism considered evil in the United States? "Making out big on increasing housing prices" is something anyone can do (yes, even regular people), provided they have the knowledge, the gumption, and are willing to put in the time and effort. Your arguments simply sound like sour grapes to me. I don't begrudge anyone their wealth, as long as it was acquired honestly.

[Vekseid]

Well, fortunately, you don't get to decide who is "rich enough". I certainly wouldn't want anyone pointing fingers at my bank account and telling me, "Sorry, but that's plenty for you." And I doubt you would either. After all, to someone in Bangladesh or Ethiopia, your net worth would be on a par with Bill Gates.

Considering that Bill Gates is working on eliminating malaria, amongst other things, any Bangladesh or Ethiopian citizen with the remotest clue would well comprehend the difference. Most of the intelligent are quite thoroughly aware of the dangers of our current approach to malaria.

Net worth is also not your bank account. Your bank account - whatever currency it is numerated in - is merely a set of tokens of trust that you expect to be able to exchange for some future value. It is not wealth on its own.

For example, if I have a website that generates revenue, the ideal government is not interested in the site itself. It doesn't really want to take it over. It may take an interest in what I earn from that site, though, so that infrastructure and the general welfare can be supported. It is in my interest to pay reasonable taxes if everyone else does. Reasonable being left with decent discretionary income.

Even if they are highly progressive - especially then, because that encourages me to grow my business, rather than focus on creating a narcissistic bubble for myself.

I actually prefer homestead-based property taxes, though. Too many loopholes in income tax, generally.

And since when is capitalism considered evil in the United States? "Making out big on increasing housing prices" is something anyone can do (yes, even regular people), provided they have the knowledge, the gumption, and are willing to put in the time and effort. Your arguments simply sound like sour grapes to me. I don't begrudge anyone their wealth, as long as it was acquired honestly.

Naive capitalism does not take into account the conditions under which it finds ideal solutions:

1) The existence of a perfect market - a large number of both buyers and sellers.
2) The presence of perfect information.

Fine print, legalese, inventing semantics, hiding risky debt through securities, monopolies (including the Realtor monopoly) - I could go on - these things all compromise the system.

Monopolies in particular are themselves examples of central planning - with all the flaws that come with that.

[Torch]

Considering that Bill Gates is working on eliminating malaria, amongst other things, any Bangladesh or Ethiopian citizen with the remotest clue would well comprehend the difference. Most of the intelligent are quite thoroughly aware of the dangers of our current approach to malaria.

Mr. Gates' philanthropic efforts aside (efforts to which I firmly support and contribute), the average Ethiopian citizen with his $800 annual per capita income would be well within his rights to point to the average American citizen with his $47,000 annual per capita income and declare said income to be ostentatious, gluttonous, and in the words of the other poster "rich enough".

My point was: Who is to say what is "rich enough"? I don't want anyone deciding that for me except for...me.

Net worth is also not your bank account. Your bank account - whatever currency it is numerated in - is merely a set of tokens of trust that you expect to be able to exchange for some future value. It is not wealth on its own.

Certainly a better term would have been 'net worth' instead of 'bank account' but the premise is still the same. No one has the right to determine how much of my net worth is 'enough'. That's what I was objecting to - use of the word 'enough'.

For example, if I have a website that generates revenue, the ideal government is not interested in the site itself. It doesn't really want to take it over. It may take an interest in what I earn from that site, though, so that infrastructure and the general welfare can be supported. It is in my interest to pay reasonable taxes if everyone else does. Reasonable being left with decent discretionary income.

Even if they are highly progressive - especially then, because that encourages me to grow my business, rather than focus on creating a narcissistic bubble for myself.

I actually prefer homestead-based property taxes, though. Too many loopholes in income tax, generally.

I completely agree with all of this. I have no problem paying my fair share of taxes, and I do so willingly and gladly. Okay, a slight exaggeration, but I would not be opposed to a raise in my income tax rate as long as it was applied across the board fairly and equally. Property taxes? I pay those too, to the tune of over $10,000 per year.

Naive capitalism does not take into account the conditions under which it finds ideal solutions:

1) The existence of a perfect market - a large number of both buyers and sellers.
2) The presence of perfect information.

Fine print, legalese, inventing semantics, hiding risky debt through securities, monopolies (including the Realtor monopoly) - I could go on - these things all compromise the system.

Monopolies in particular are themselves examples of central planning - with all the flaws that come with that.

True, but no system is perfect. Real estate, securities and investments, even inherited wealth has its own problems. I just don't see accumulated wealth as the evil its continually made out to be, and those who take advantage of its available opportunities shouldn't be vilified for doing so.

[Vekseid]

Mr. Gates' philanthropic efforts aside (efforts to which I firmly support and contribute), the average Ethiopian citizen with his $800 annual per capita income would be well within his rights to point to the average American citizen with his $47,000 annual per capita income and declare said income to be ostentatious, gluttonous, and in the words of the other poster "rich enough".

My point was: Who is to say what is "rich enough"? I don't want anyone deciding that for me except for...me.

"Who is to say" should be the society which brought you up under a certain minimum standard that managed to guarantee the security of the $97k per laborer income. The one that guarantees clean water, medical standards, food quality, common defense, etc. Ideally, health care as well.

Some of this is actually self reinforcing - we would end up making more from single payer than it would cost. Health care is an investment - as is education.

As for 'enough', I think taxes should begin with discretionary income, rather than half the poverty level. It's a bit crazy. The United States government gathers a lot of awesome statistics, so assuming it was appropriately transparent, I would hope there wouldn't be much issue.

Certainly a better term would have been 'net worth' instead of 'bank account' but the premise is still the same. No one has the right to determine how much of my net worth is 'enough'. That's what I was objecting to - use of the word 'enough'.

I completely agree with all of this. I have no problem paying my fair share of taxes, and I do so willingly and gladly. Okay, a slight exaggeration, but I would not be opposed to a raise in my income tax rate as long as it was applied across the board fairly and equally. Property taxes? I pay those too, to the tune of over $10,000 per year.

True, but no system is perfect. Real estate, securities and investments, even inherited wealth has its own problems. I just don't see accumulated wealth as the evil its continually made out to be, and those who take advantage of its available opportunities shouldn't be vilified for doing so.

People who accumulate their own wealth tend to be better people, I observe. Inheriting wealth is a bit of a crap shoot.

The ones who skim off of others are the ones who tend to piss me off. One of my absolute worst clients ran a payday loan franchise, and he was the scum of the Earth. Naturally, republican to the core. He must have had an aneurysm when Obama won. I hope he did.

[Torch]

"Who is to say" should be the society which brought you up under a certain minimum standard that managed to guarantee the security of the $97k per laborer income. The one that guarantees clean water, medical standards, food quality, common defense, etc. Ideally, health care as well.

Some of this is actually self reinforcing - we would end up making more from single payer than it would cost. Health care is an investment - as is education.

I agree. But here in the US its an investment that starts poorly before birth and goes downhill from there. The lack of prenatal care for minority and low income women is appalling, and there is no excuse for the United States to have the second worst infant mortality rate in the developed world, exceeded only by Latvia, for crying out loud. No excuse whatsoever. I don't care what anyone says, health care is a right, not a privilege, and I'd be more than happy to give up my employer sponsored plan for a single payer system.

The ones who skim off of others are the ones who tend to piss me off. One of my absolute worst clients ran a payday loan franchise, and he was the scum of the Earth. Naturally, republican to the core. He must have had an aneurysm when Obama won. I hope he did.

Can't get away from those folks, I'm afraid. From your client all the way up to the Bernie Madoffs of the world, there will always be a certain percentage of individuals with no sense of morality.

[Vekseid]

Get rid of them all, no. We can prune a number of them and get most of the rest out of power, however. It's done wonders for this place.

[Torch]

We can prune a number of them and get most of the rest out of power, however. It's done wonders for this place.

Touche'  :-)

[RubySlippers]

Well, fortunately, you don't get to decide who is "rich enough". I certainly wouldn't want anyone pointing fingers at my bank account and telling me, "Sorry, but that's plenty for you." And I doubt you would either. After all, to someone in Bangladesh or Ethiopia, your net worth would be on a par with Bill Gates.

And since when is capitalism considered evil in the United States? "Making out big on increasing housing prices" is something anyone can do (yes, even regular people), provided they have the knowledge, the gumption, and are willing to put in the time and effort. Your arguments simply sound like sour grapes to me. I don't begrudge anyone their wealth, as long as it was acquired honestly.

People were buying homes there is no way they could afford when the variable rate mortgages went up. Its not they bought homes on a fixed rate mortgage and could afford the payments normally, the former was stupid and the latter is smart use of money getting a hard asset.

As for my view on technology most have things they don't need. Take internet you can get dial-up for around $10 a month and high speed dial-up for a little more. Cell phones I do have a Net 10 Pre-paid one and spend $30 every two months and its a phone with texting and its fineI just use it for short messages or calls to those I need to communicate with. Like if I'm on a bus that broke down and need to call work that I will be late. What is that at most a three minute call?

I tend to question when people say they NEED cable internet unless they work at home, for email and this sort of contact I'm doing now basic dial-up is fine really. I tend to view first what does a person NEED to have and what is a WANT that is nice but not necessary. Most people I agree need internet access most really don't have to have a cable line for normal uses at a basic level. My high speed service is fine its faster and gets information through even video well enough. If you work at home and NEED it for that its different and is a legitimate business expense I would think. Oddly people re going from cable to dial-up now with the economy and finding out one can get by well enough.

Oddly I think the best thing the governemtns could do is not duplicate services in regulations if the States regulate the environmental issues already why have the Feds do it also, its just more red tape for businesses raising costs to do business.  And no other advanced nation saddles companies with health care costs that adds to costs also making them less competative.

[All Powerful Nateboi]

Can't get away from those folks, I'm afraid. From your client all the way up to the Bernie Madoffs of the world, there will always be a certain percentage of individuals with no sense of morality.

Feel the need to point out Banshee's Law: In order for any theory to work for a large group of people, you *must* begin from the idea that some people, no matter what the incentive to do otherwise, will be dicks.

I now return  you to your regularly scheduled discussion.

[OldSchoolGamer]

And since when is capitalism considered evil in the United States? "Making out big on increasing housing prices" is something anyone can do (yes, even regular people), provided they have the knowledge, the gumption, and are willing to put in the time and effort. Your arguments simply sound like sour grapes to me. I don't begrudge anyone their wealth, as long as it was acquired honestly.

Trouble is, most of the wealth of the elite in America is not acquired honestly.

And this whole housing appreciation thing is a violation of the laws of thermodynamics.  A nailed-together conglomeration of wood, vinyl, glass and iron gets less valuable with time, not more.  The added value was an illusion, made possible by the cheap-oil blowout of the last half of the twentieth century. 

When you look at it, much of the American economy today is fraudulent.  Take a look at banks' portfolios, and all the derivatives--basically made-up "securities" now "valued" in the hundreds of trillions of dollars.  The bankers have basically turned the economy into a giant game of Monopoly, like children writing $$1 GAZILLION!$$ on slips of paper and passing it off as something of actual value. 

Over the next ten or so years, America is going to transition from a fraudulent, something-for-nothing, jive "securities," "let's pretend we get richer as our industrial base migrates to whatever up-and-coming Third World sweatshop is in vogue this year "economy" to a real economy based on actual value of real goods and services, rather than paper kids in suits have written "ONE GAZILLION BAZILLION DOLLARS!!1!" on. 

This transition is already proving to be rather painful, and Americans are not taking it well.  If Tuesday's election results are any indication, the American electorate appears to be determined to see-saw petulantly between the two major parties until someone brings back $20,000 home equity lines of credit and $1.79 a gallon gasoline.  Ain't gonna happen. 

[Vekseid]

People were rarely buying the physical house itself, they were buying the land.

[Kotah]

Humpty dumpty sat on a wall.
Humpty dumpty had a great fall.

It's gonna come down. The thing is, what are we gonna do after it falls? Fall out four, the USA... or what?

Unemployment is WAY up right now. People that went and got those zesty degrees are sentenced to working at subway and walmart. Employment places can't sift through enough clutter to get to the people that are actually qualified. That's right, spend thousands on your edumacation, and work at blockbuster.

Jobs are going away guys, not coming back. Factories are dropping like flies, and corporations have been moving them to third world countries to save a buck for a while now. Several years in fact.

The chances of us to stop boinging from one party to another is pretty low. 
We don't really have any other options. There's the green party, however, you have to deal with the fact that people aren't going to vote there. People would seem to be a tad bit more likely to vote for people that they think are going to win. "Oh, I would vote for so and so, but so and so is gonna win it anyway." Face it. The republicans and the democrats are on the same side. They are both well funded by more or less the same people. Like it or not, people are going to vote for who can afford more buttons and stickers. Rather then the third party guy that has their shit in the right place. We aren't going to be getting out of this that easy.

All the reforms we have coming are just that, reforms. They are going to cushion the blow for a while, and then we are going to drop lower. Even the single party payer is going to fuck us eventually. No amount of sweet heart reforms is going to save us. IT doesn't mean we should ask for them, but it isn't going to help us in the end. We have labor laws to protect workers, but that doesn't stop the factory from closing. We have laws stating that we have to be given some form of medical attention, but that doesn't mean your not going to pay out the butt for the rest of your life cause you broke your leg-or worse, get faulty medical attention and shipped on your way to die in a bus station.  We have laws protecting us from police brutality, but that doesn't stop it from happening. We have rights that protect females from sexism. It hasn't stopped rape, sexual harassment, or anything else. There are laws against racism, but that didn't stop the KKK from marching in Chicago in a Jewish neighborhood.

People stuffed into tin cans we like to call mobile homes. People living on the streets. People with disease that will never be cured because it's more profitable to let someone live with it, then to cure it.

We, the united states, have the ability to end world hunger. The food is there. It's just not cost efficient to do it. In the great depression there were companies the burned food because people couldn't afford to buy it. We give to charity... way to go. Enough of them are scams, and enough of them spend the money you send them on putting out more little fliers then they do actually giving it to people.

Sure, you have a chance to hit it big, if you are really lucky. If your family has enough money. If you won the lottery. If... If... If...

"but communism doesn't work, socialism doesn't work"

Well, my friends, neither is capitalism.

[Jude]

If you look at history, I don't think this is much different than what happened during the Great Depression.  Nor do I think our recovery will be.  Just less severe.

[Vekseid]

This is a mix of the 1870's (credit freeze, jobless growth) early 20's (many fixes are a sham) and the Great Depression. Some of the cultural aspects are similar as well, such as the shift in spirituality, etc. It is - at least at that level - extraordinarily fascinating.

[Will]

That was a really excellent video.  Thanks, Vekseid.

[OldSchoolGamer]

If you look at history, I don't think this is much different than what happened during the Great Depression.  Nor do I think our recovery will be.  Just less severe.

The problem is that we're not going to recover. 

Back in the Fifties (which is when we truly recovered from the Great Depression, and the economy stood on its own two feet without massive government spending), we had abundant natural resources (especially oil).  If we wanted more, all we had to do was drill more holes, and presto! there it was.

Much of the vaunted "growth" of the mid and late 20th centuries was simply an expansion of the amount of energy available per capita.  Now that artificial expansion is reversing itself.  So likewise, the "Great Recession" or whatever you want to call it today is primarily a result of us now having less energy per capita.  (Yes, the bursting of the housing bubble brought the issue to a head and exacerbated the monetary end of it, but even without such a bubble to pop it would have happened within a couple years.)  People are simply not aware of it.  In a market economy, the early stages of resource depletion are manifested by price increases.  Back in 2000, we had a growing economy and oil around $20-$30/barrel.  Now, in spite of economic stagnation, oil is $70-80 a barrel.  Were the economy as healthy as it was eight or nine years ago, we'd likely have $120/bbl oil. 

The current situation is not a "depression" in the conventional sense.  Rather it is a return to long-term historical norms, before cheap oil and easy credit.

[Kotah]

Let's not forget a small change between he workforce in the 1920'2 and today.

Female workers.

Not saying female workers are bad at all, however, adding more to industry did help our situation. So did laws that protect workers rights.

[Revolverman]

The problem is that we're not going to recover. 

Back in the Fifties (which is when we truly recovered from the Great Depression, and the economy stood on its own two feet without massive government spending), we had abundant natural resources (especially oil).  If we wanted more, all we had to do was drill more holes, and presto! there it was.

Much of the vaunted "growth" of the mid and late 20th centuries was simply an expansion of the amount of energy available per capita.  Now that artificial expansion is reversing itself.  So likewise, the "Great Recession" or whatever you want to call it today is primarily a result of us now having less energy per capita.  (Yes, the bursting of the housing bubble brought the issue to a head and exacerbated the monetary end of it, but even without such a bubble to pop it would have happened within a couple years.)  People are simply not aware of it.  In a market economy, the early stages of resource depletion are manifested by price increases.  Back in 2000, we had a growing economy and oil around $20-$30/barrel.  Now, in spite of economic stagnation, oil is $70-80 a barrel.  Were the economy as healthy as it was eight or nine years ago, we'd likely have $120/bbl oil. 

The current situation is not a "depression" in the conventional sense.  Rather it is a return to long-term historical norms, before cheap oil and easy credit.

Oil is inflated. There is 1.7 trillion in the Athabasca alone, and 149 years of oil left in Canada alone.