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This is an excellent question that people really need to know more about.When we solve a problem, after a while, we tend to forget what solved the problem and go back to what we used to do that caused the thing to go over the cliff in the first place.That was the 2008 mortgage and financial crisis, as it forgot the lessons of the Great Depression.History up to the Great DepressionIn the 1920’s, when the economy was booming and it seemed like the party would never stop, banks lent out a ton of money on credit, with the presumption that all that money would be paid back and that there was sufficient collateral to cover it.Except, there wasn’t.One of the biggest assets that people might own that a bank could recover is real property. As Will Rogers once noted: “Buy land. They ain’t makin’ any more of the stuff.” Real property was something that pretty much always appreciated in value.Prior to the early 1900’s, most people didn’t own their own homes. Most people rented. Many lived in tenements and apartments in cities, or lived as tenants on farms in rural areas. Land speculators often bought what was left of the government land grants as the frontier closed.But, in the 1920’s, that began to change as banks felt more confident in lending credit for new construction. There were significant speculation bubbles. People bought property and built homes on future credit that wasn’t based on anything but hope.And as the stock market ticked ever higher and higher, banks bet on it. With the deposit money of their customers.And then the Stock Market Crash of 1929 hit.Banks that were significantly overleveraged and undercapitalized were hit hard. Many just failed, and those who had their deposits at banks that became insolvent just lost everything. There was no deposit insurance. If your bank went under, you were screwed out of your entire savings.And if you lost your job, that meant you also lost any means of continuing to pay back that home loan.Additionally, there were suddenly vast quantities of new construction for sale… that nobody could afford any longer. That drove down property values everywhere.Suddenly, your property that was worth $10,000 last year might now only be worth $5,000. But you might still owe $8,000 - what we call “underwater.” If you default or declare bankruptcy, the bank loses. And you’re out on the street.And then, what could the bank do with the house? How could they sell it? Nobody was buying. So, the bank suddenly has a ton of illiquid assets.More foreclosures in a neighborhood continues to lower the property values further, and the destructive cycle just ends up repeating itself.The Hoover administration tried economic protectionism. At the administration’s pushing, Congress passed the Smoot-Hawley Act of 1930, which imposed schedules of high tariffs on over twenty thousand types of imported goods, to protect American business, by golly.It backfired spectacularly and greatly exacerbated the worsening Depression.Weather conditions didn’t help. A severe drought ravaged the Midwest and Great Plains starting in 1930. Farmers had been using what in retrospect were poor farming practices, tearing down line fences and forest windbreaks and not planting cover crops for winters. The thin layer of good topsoil in the Great Plains turned to dust and became an ecological nightmare.Farms started going under as crops failed. The Smoot-Hawley tariffs only made things worse.Additionally, the money supply dried up. The banks that survived, like J.P. Morgan Chase, just turned off the credit spigot to stay afloat. They stopped lending. Why? Again: illiquid assets. The banks were holding on to all these properties and other assets that they couldn’t sell. And people didn’t trust the banks because so many had lost everything depositing their savings there. Because the banks couldn’t sell anything they had, and nobody would give them any cash, they didn’t have any money to give out.Part of the problem was the gold standard. Under the Federal Reserve Act, at least 40% of the money in circulation had to be backed by gold reserves held by the federal government. So, there was no modern tool of being able to print more money to help increase liquidity.On top of that, gold became more expensive. Mortgages often had clauses that allowed banks to demand repayment in gold because of the gold standard. By 1932, that resulted in a disparity in payment between the dollar and the value of gold that meant that if a debtor was forced to repay in gold, it could cost him as much as $1.69 for every dollar he owed. This led to more bankruptcies and foreclosures still.Because of the tariffs, the lack of money supply, the collapse of agriculture, and lack of consumer spending, rampant deflation initially set in. This made exported American goods increasingly more expensive for overseas importers, even where other nations had not instituted retaliatory tariffs of their own. Manufacturing began to collapse. The steel industry followed.And the Depression spiraled out of control.When Roosevelt took over from Hoover in 1932, the nation was becoming increasingly desperate.The New DealRoosevelt ran on a radical new idea that he called “The New Deal.” The premise was that the government would intervene in the economy and prop it up through deficit spending and government borrowing. The New Deal would create government programs to put people back to work and get people back to farming and building things, and that eventually, once people got back on their feet, the government could take those supports out.Various New Deal reforms were leveled at the financial sector to try to get the credit flowing again.One reform was put on the banks directly: the Glass-Steagall Act. One of the problems with the banking crisis was that banks could gamble with depositor’s money. The Glass-Steagall Act separated investment banks from commercial banks. Investment banks are gamblers. These deal with stock and bonds and venture capital and hedge funds and Wall Street. Commercial banks are the Savings and Loan where you put your nest egg. The Glass Steagall Act put a firewall between the two. The idea was that Wall Street could melt to the ground and Main Street wouldn’t go with it.Keep this in mind. It will be important later.Another was to protect depositors. Commercial banks would be required to pay into a new Federal Deposit Insurance Corporation: the FDIC, which would make sure that depositors would get paid back if the bank collapsed. That encouraged people to trust banks again. People would deposit their money, and banks could use that money to start giving out loans again.A third was to help reduce the risk of default on certain types of loans through surety agreements. Sureties had been around forever: they’re a promise to pay a debt if the original debtor defaults.The Federal government aimed these programs at home loans in particular, to try to reduce the homelessness problem. And so, in 1938 with the National Housing Act, the government formed the Federal National Mortgage Association, or FNMA. FNMA, or “Fannie Mae,” would buy the mortgages from the banks, who would continue to “service” the mortgages. From the perspective of the consumer, it looked just like their ordinary transaction: get a loan from the bank, pay the bank. The bank kept some money for “service fees,” and the Feds took over the loan, and importantly: the risk of default. This created a secondary market for mortgages for the first time in history.But Fannie would only buy that mortgage if it met certain criteria, such as debt to income ratios, term of the loan, and more. If banks wanted to make other loans, that was fine, but Fannie wouldn’t buy them.And the program basically worked. Banks started lending again. Credit slowly started to thaw out. Banks started getting more liquidity in their balance sheets. People started being able to buy homes again.After World War II, the housing market took off again, fueled in part by the GI Bill and a push for suburbanization and the creation of easily duplicated, cheap ranch houses on a standardized template.But in the background still driving things along was always Fannie Mae and the prime 30 year fixed-rate mortgage, which had become as much a part of the standardized American experience as baseball. Housing prices rose steadily home ownership became a stable part of the American economy. Virtually every person in the country could see a viable path to owning their own home.By the 1960’s, FNMA owned more than 90% of the residential mortgages in the United States and individual home ownership had risen to the highest levels ever recorded. This led to the greatest expansion of the middle class in history.So, of course, like all wildly successful government programs, we had to fix it.PrivatizationIn 1954, FNMA was semi-privatized into a public-private hybrid where the government owned the preferred stock (with better voting rights within the corporation,) and the public held the common stock (which gave dividends, but inferior voting rights).And in 1968, Fannie Mae was privatized entirely, with a small slice of it (known as Ginnie Mae) carved off to maintain Federal Housing Authority loans, Veterans Administration loans, and Farmer’s Home Administration mortgage insurance. Because Fannie Mae had a near monopoly on the secondary mortgage market, the government created the Federal Home Loan Mortgage Corporation to compete with it: Freddie Mac.By 1981, Fannie and Freddie were doing well as private companies, and Fannie came up with a great idea that had been done in limited settings: pass-through mortgage derivatives. They would bundle up various mortgages and sell them as a type of bond to investors. Investors loved the idea. The housing market had been extremely stable for nearly fifty years and offered a modest, but highly reliable return. And so the commercial home loan mortgage backed security was born.Keep this in mind. It will be important later.The Savings and Loan CrisisBy the early 1980’s, the economy had been stable for 30 years (more or less,) and thanks to the Glass-Steagall Act, commercial banks were doing okay even with the “stagflation” of the 1970’s. Home prices continued to rise about on par with wage growth.But one type of commercial banks, the Savings and Loan banks, wanted to do better than okay. S&L’s were the kind of bank in It’s a Wonderful Life. S&L’s were specifically singled out in federal legislation, like credit unions, for a single purpose: to promote and facilitate home ownership, small businesses, car loans, that sort of stuff.A business-friendly Congress agreed. They passed two laws in 1980 (signed by Jimmy Carter) and 1982 (Signed by Ronald Reagan) that allowed banks to offer a variety of new savings and lending options, including the Adjustable Rate Mortgage, and dramatically reduced the oversight of these banks.Adjustable rate mortgages work by locking in a fixed rate for a short term, and then after that initial term, the mortgage rate would re-adjust every additional term after that. If the prime interest rates set by the Federal Reserve stayed high, lenders would get hammered.But S&L’s had a fix in mind for consumers: just keep refinancing your home every time the first term is up. Home prices would just always continue to rise, right? They could collect closing costs every couple of years, and consumers remained essentially chained to them in debt with a steady stream of revenue that would always be secured if something happened. It was perfect.Keep these types of mortgages in mind. It will be important later.By the mid-1980’s, the lack of oversight allowed S&L’s to start making riskier and riskier decisions, offering certificates of deposit with wild interest rates, as much as eight to ten percent. They were exempted from FDIC oversight, while still keeping deposits federally insured (what could go wrong there, right?)And then the Federal Reserve, in an effort to reduce inflation, raised short-term interest rates, which sent ripple effects through these S&L’s, who had been made very vulnerable to that particular issue through these bad decisions, lack of appropriate capitalization, and overpromising depositors.By 1992, almost a third of savings and loan banks nationwide had collapsed.This crisis led to the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), which put back some of the same oversights that had been taken off because people wanted to make more money, particularly better capitalization rules (which were tied to risk,) increased deposit insurance premiums and brought back some FDIC oversight, and reduced these banks’ portfolio caps in non-residential mortgages.Keep this in mind. It will be important later.The Repeal of Glass-SteagallRemember how back in the 30’s, in the midst of the Great Depression, we instituted that firewall between investment banks and commercial banks?Again, it worked so well, we had to fix it.Starting in the 1960’s, the federal regulators began to start to allow commercial banks to get back into the securities game again. The list was limited, and was supposed to stay in relatively safe stuff.This accelerated under Reagan’s policy of deregulation, and continued under Clinton in the 1990’s. By 1999, Bill Clinton declared that Glass-Steagall no longer served any meaningful purpose, and most people had declared it dead well before that. The law was officially repealed in 1999 with the Gramm-Leach-Bliley Act.Immediately, investment and commercial banks start merging again. Bear Stearns, Lehman Brothers, Citibank, all of these investment banks start buying out the commercial banks or merging.And there’s a culture difference between those.Remember: investment banks are gamblers. These are the Wall Street guys. They’re risk takers. They’re hedge fund managers. These are your Gordon Gekko type guys. Commercial banks are Main Street guys. They’re generally conservative, George Bailey types.And the investment banker culture won out over the course of the 2000’s. George Bailey starts snorting coke and putting on Ray Bans with a blazer and jeans.Sub-Prime, NINJA, and ARM LoansIn the early 1990’s, affordable housing started to become a greater and greater issue. George H.W. Bush signed legislation in late 1992 amending Fannie and Freddie’s charters to push them to make loans to people with lesser means than the traditional prime criteria. The Clinton Administration continued pushing Fannie and Freddie to accept more low and moderate income earners.That meant taking on riskier loans.The Clinton administration put rules in place in 2000 to curb predatory lending practices, and rules that disallowed those risky loans from counting towards their low-income targets.The Bush administration took those predatory lending rules off in 2004, and allowed those risky, “sub-prime” mortgages to count towards the low-income targets set by Housing and Urban Development.Remember those ARM mortgages?Heh, heh. This is getting long, and you probably glossed over that, didn’t you? I told you it was going to be important.Banks started making riskier and riskier loans, often those ARM loans. They could meet their HUD targets and make tons of money. And again: the gravy train was endless, right? The housing market had not lost value for over fifty years, even in the recessions of the 70’s and 80’s.So, they put more people in houses. Bigger houses. More expensive houses. The economy was doing good. New construction was hot. Contractors couldn’t build the McMansions fast enough.Banks started a race to the bottom with these sub-prime loans, getting all the way to NINJA loans: No Income, No Job, No Assets required. You’re a homeless person selling Etsy products out of your car? You’re already prequalified on a quarter-million subdivision home with a quarter-acre. Congratulations.As long as you could afford the payments, you were in.De-regulationIn the early 2000’s, the Bush administration wanted to keep the economy going. There was a low-level recession from March 2001 to November 2001 following the dot-com crash. The administration lifted a number of securities and financial sector oversight rules. One of those rules was about capitalization.Remember that? I told you that was going to be important.Capitalization requirements are how much reserve cash a bank needs to keep on hand to prevent collapse if something happens, against their liability sheets. Remember: that’s how banks got in trouble before the Great Depression and again right before the Savings and Loan Crisis. They took on too many liabilities and didn’t have enough capital to actually pay it all out.The Bush administration relaxed the rules on required capitalization and what assets could count as capital. Some of those assets turned out not to be very useful.Collateralized Debt Obligations and the Mortgage Backed SecurityRemember, back in 1981, when Fannie starts issuing those mortgage backed securities, re-selling them as bonds with a low, but reliable interest rate?That gets more complicated after 2004–2005 with the increased use of a financial tool called the collateralized debt obligation. Basically, a CDO is just a promise to pay investors in a sequence based on the cash flow from something the CDO invests in. The rate of return was tied to how risky the CDO was.In the 70’s and 80’s, CDOs were pretty safe, mundane things. They were basically like index funds; they invested in a lot of stuff and did okay. But by the mid-2000’s, CDOs were becoming riskier and riskier, while providing more and more reward. CDOs bought up mortgages like crazy, because they had increasingly higher interest rates as the subprime mortgages started taking off.But people were nervous about investing solely in these high-risk CDOs. And so, investment banks that bought up those mortgage-backed securities started to bundle together some high-risk mortgages with some regular, low-risk mortgages and promising that they were safer.And then some investment banks started to lie about how many of those high-risk mortgages were in them. Why? Again: the housing market was super-stable and always going up. Those loans only looked high-risk on paper, right? I mean, those debtors could always just keep refinancing every couple of years.So banks bought up those assets and added them to their capitalization sheets.You see it, right? You see the problem here? Not yet?Keep this in mind. It will be important in just a minute.The CollapseI remember being in college in the early 2000’s, and asking the loan officer at our local bank how some of the people I knew were making maybe $10–12 an hour could afford these massive homes and boats and jet skis and campers. My parents were teachers; they weren’t doing bad, but we couldn’t afford all that and I knew they were doing better than some of those people. The loan officer shook his head and said, “They can’t. They can afford the payments.”Some of those people didn’t have furniture in their homes. If they had a party, they rented furniture for a couple days. I’m serious. That was a thing. Many of them were in deep, crippling credit card debt, paying off the balances of one with another, and justifying it with the idea that it would be okay when the next raise kicked in.It was a classic speculation bubble.Then in late 2006–2007, that bubble burst.The housing market became oversupplied. People stopped buying the new construction and the existing homes as much. And home values started to drop.And suddenly, because home values plateaued and then dropped, so too did the little bit of equity that many of these purchasers, in debt up to their eyeballs, had in their homes. Without more equity, they couldn’t refinance. And because they could’t refinance, those ARM loans or other loans kicked in, and the interest rates on them skyrocketed.And suddenly, they couldn’t make the payments anymore.And then they went into default on their mortgages.Followed by foreclosure.And often bankruptcy.It turned into a vicious cycle. Once one or two neighbors end up losing their homes in foreclosure, it affects the property values of everyone else around those properties like a contagion. Healthier borrowers started to become impacted as property values declined and now they couldn’t refinance.In 2007, lenders foreclosed on 79% more homes than in 2006: 1.3 million foreclosures. In 2008, this skyrocketed another 81% still: 2.3 million. By August of 2008, nearly one in ten mortgages nationally were in default and foreclosure proceedings. By one year later, this had risen to over 14% nationally.The RecessionRemember, the financial sector had heavily invested in all of those housing market securities. They thought they were safe. They thought that the housing market would never go anywhere but up. They built their whole foundation on it.And they had relied on those securities to meet their capitalization requirements.Securities that suddenly turned out to be nearly worthless.Huge banks ran out of liquid cash almost immediately. This is what happened to Bear Stearns, Lehman Brothers, Goldman Sachs, Citibank, and more. They were suddenly holding on to billions upon billions of dollars of assets that were either worthless, or completely frozen. They couldn’t sell the bits of stuff that was even worth anything.And because their assets weren’t liquid, they didn’t have money to lend anymore.And that lack of credit is what grinds the economy to a halt.That impacted every sector of business in the United States. Which impacted every sector of business in the world. And that meant that businesses started having to lay people off because they couldn’t get the money to keep paying them.And then because those people lost their jobs, they started to default on their mortgages. Which rippled through the CDO market again.This was why it was so critical for the Federal Reserve to buy those toxic assets and provide the banks with liquid cash in their place. They had to get the credit flowing again to re-start the gears of the economy. Without it, we almost certainly would have seen a full repeat of the Great Depression.And that brings us to today.That’s the abbreviated, oversimplified explanation. It’s more complicated than this, and there’s other factors that contributed, but that’s kind of the main story in basic terms. That’s roughly how 10 million homes went into foreclosure.And we still haven’t fully recovered. Over twice as many people rent as opposed to own. Less than one-third of people who have lost a home in foreclosure in the last decade will be able to repurchase another again. Roughly 2/3ds of those people who lost their homes have so damaged their credit that they will never qualify again. Hundreds of thousands, if not millions more, were so emotionally traumatized by the experience that they simply refuse to go through it again.And that number of renters to owners is substantially higher for my generation, the Millenials, who have never seen any substantial portion of the post-2008 recovery. We still haven’t made up the wages that would allow us to save enough to purchase, even setting aside the massive increase in student debt we carry.75% of my generation wants to own a home. Less than 35% do.And, in case reading this wasn’t chilling enough for you, the present administration has been lifting some of the exact rules and regulations that were put into place after the 2008 collapse that were lifted in 2004 that were put in place after the 1980’s collapse after those were lifted. Because it worked so well the first two times.Mostly Standard Addendum and Disclaimer: read this before you comment.I welcome rational, reasoned debate on the merits with reliable, credible sources.But coming on here and calling me names, pissing and moaning about how biased I am, et cetera and BNBR violation and so forth, will result in a swift one-way frogmarch out the airlock. Doing the same to others will result in the same treatment.Essentially, act like an adult and don’t be a dick about it.Look, this is pretty oversimplified. Ph.D. theses have been written about this. I’m trying to make it at least remotely accessible to those with the patience to read it. Don’t be pedantic about it, please?Getting cute with me about my commenting rules and how my answer doesn’t follow my rules and blah, blah, whine, blah is getting old. Stay on topic or you’ll get to watch the debate from the outside.Same with whining about these rules and something something free speech and censorship.If you want to argue and you’re not sure how to not be a dick about it, just post a picture of a cute baby animal instead, all right? Your displeasure and disagreement will be duly noted. Pinkie swear.If you have to consider whether or not you’re over the line, the answer is most likely yes. I’ll just delete your comment and probably block you, and frankly, I won’t lose a minute of sleep over it.Debate responsibly.

The living conditions were changing during that period. They varied depending on where one lived and what status one had.I’ll zoom in on the aspect of housing in Warsaw, where most of my family found themselves after the war.Throughout the postwar period there was an acute shortage of housing, with the most dramatic situation during the first 2 decades.The city was in ruins. The people who were returning to it were looking for any, even barely habitable, shelter.Population of Warsaw in 1939: 1.2 million1945: several hundred1960: over a million, mainly arrivals from other parts of Poland. Imagine housing them all.This is the centre of Warsaw in 1954. The Palace of Culture was built before the residential buildings around it. Symbolic projects came first. In fact 5 just-about-habitable previously elegant streets were demolished to make space for the Palace:1960, a view of the Main Street in Warsaw - Marszałkowska:In the first years after the war the authorities allowed people to take over empty properties and to renovate/rebuild them themselves.The state run projects were taking off more seriously from the mid 1950s-60s onwards.In 1945, my grandmother’s brother, together with several other young people, found a shell of a building which had a roof and fairly solid walls. They were in full time employment six days a week, which was the requirement for everyone under the new regime. After work they were obtaining materials: bricks, cement, pipes, etc, and putting it all together, learning the trade as they went along.Many mishaps along the way. In the meantime they were sleeping on provisional mattresses, thankful for the roof. Between the group of 30-ish + of them, in a few years, they built themselves a small four storey house with two large rooms, a kitchen and a bathroom on each floor. Throughout the Polish People’s Republic period and up until now they have not been connected to the municipal hot water supply or to municipal central heating. Furnace heating only. They were connected to running water towards the end of the 1960s.Over the years some of them moved to new-build housing. Since the end of the war the 4 original families have been passing the residence down to their offspring, paying rent and rates to the local council.The building is still standing. Their right to carry on living in it is now being disputed.Some people were more lucky after the war. My grandmother found a space in a block of relatively undamaged apartments. The drawback was that there were about 10 people per each room in the 6 storey tenement. Water was available at a pump in the street. There was one toilet for all the tenants in the unlit basement. No electricity. The wooden staircase had stairs missing. Some windows were broken. There was no heating. It stayed this way at least until the mid 1960s, when she managed to move somewhere else. How difficult it was to move elsewhere is another story.Upgrading places like this was not a priority for the authorities, who were busy with other projects. Some of these buildings survived in this state throughout the whole period of the Polish People’s Republic.A picture taken last June:Of these two identical buildings one was renovated only this century:These two buildings were in the same condition until the early 2000s, when one of them was privatised:You can see the recent addition of balconies and new windows to the original structure. It happened post PPR.During the times of PPR it would have remained like this one, still waiting for a facelift:After the war the surviving better class prewar apartments were divided up, often with provisional partitions. Each new room was occupied by a whole family. There was one bathroom and one kitchen for the whole floor. As people were moving out, over the years most remaining families were being left with two small rooms. They were allowed to install their own bathroom/toilet in this space, if they had the knowhow. Few had the money to employ someone else to do it for them, even though they were in full employment (men and women).This art nouveau building was used as communal housing, with the spacious prewar apartments inside divided up into several small apartments permanently.Now some renovation work is about to start outside. Inside it’s past rescuing. The artist who designed the features must have had a premonition:Initially larger buildings were requisitioned from the owners to house a number of people, with the obligation on the owner to renovate and to finance the renovation, without receiving the rent. In return the owner could keep the rights to the property, at least temporarily.Where there was no owner the authorities were leaving the surviving buildings to the inhabitants’ own devices as they focused on building new blocks of apartments. Broken staircase or a leaky roof? Do it yourself. No electricity or running water? Join the party and we’ll move you to a better, modern place like this:How good was the new-build housing?The quality was different for communist party members than for non-members.For the masses: the housing was built fast. Quantity over quality. A clever technology was developed to compress existing rubble (there was plenty of it) into concrete sheets which were assembled quickly. Cracks, leaks and other faults were often appearing soon, sometimes even before the building was given over for use, especially in tall tower blocks. The apartments were small: two rooms per family of four. There was no concept of a separate bedroom. Folding wall-beds were the norm to allow more space during daytime.A typical folding bed-shelf (tapczan półka):A space saving unit, with various folding accessories. Folding up the table creates extra space:This is the size of a typical new-build kitchen:People from all walks of life lived in these. In the 1960s my blue collar grandparents lived in a block of 60 small apartments alongside accomplished people such as an opera singer with a dog, an army general with his family, a diplomat who had just returned with his family from ambassadoring in Cuba, and a physics scientist (with family), who used to give guest lectures in the USA. Out of the 60 apartments the physicist was one of the only two tenants with a car. He bought it in the US and used it for going anywhere, even to the shop a few hundred meters away. My granddad was the other person with a car. In his spare time after work he used to buy various bits and he built his own cars, one at a time. They looked odd but they worked, at least some of the time. The first hybrid cars in the original sense of the word, I guess.There were no parking restrictions in the streets afaik until the 1980s.Although all the kids went to the same school they clustered together according to the social status of the parents. There were strong class distinctions. There was snobbery and a sense of superiority even under the conditions of forced mixing of all. Although all schools were state run, some were seen as academically better than others, depending on the concentration of intelligentsia in the particular area.As time went by, even with intensified building schemes in place, the new housing block estates were not keeping up with demand. Young people had nowhere to move to. When they themselves started a family they were still living with their parents in the two rooms - now 6 or more family members. It was common for the newly weds to hope to move to the grandparents’ flat when it became available..., in their frustration wishing for it to happen soon.After a while, people moving into Warsaw had to be registered officially as residents. To get the residence permit one had to be registered as employed locally. To get local employment one had to have a permanent address locally.Residence permit:This cunning regulation restricted mobility and the influx into Warsaw. Still, shortage of accommodation remained a nationwide problem during the PPR period, not only in Warsaw.Population of Poland 1946: 24 million.Population of Poland 1980: 36 million.(This happened without immigration from outside.)In the 1960s the “communist” authorities revived the prewar initiative of a housing fund aimed to enable the poor to buy their homes. The government encouraged people to pay monthly amounts to the Fund - Spółdzielnia Mieszkaniowa. Initially the waiting time for an apartment was 15-20 years (after the completion of payments, which constituted 1/4 of the building cost), so one would be saving for their children’s future apartment. During the boom years of building faster in the 1970s the promise was that the waiting time would go down to 6 years. As years went by the government’s promise was waning, until some time in the 1980s they announced that they could no longer deliver on it. The money deposited with them for years could be claimed back, afaik with some limiting stipulations which were due to the fact that the country was broke financially.For many people saving any amount was a struggle in spite of being employed. The wages were so low that it was hard to make ends meet.On the plus side, if one did get allocated a new-build, there was central heating, running water and mixer taps. Popular TV serials were sweetening the grimness of the life in the blocks by setting comical situations on the estates.This mural on a smartened up block is a reminder of one of the more popular serials - “Alternatives”:Of course it was different for the communist party members.Out of the population of 36 million in 1980 - 3 million were communist party card holders, some genuine believers, others using the membership card as a way of getting by.I live in an area which was built in the 1960s for the State Security officials. Even here the hierarchy was reflected in the standards of accommodation.2 rooms per apartment was still typical in all of these but the rooms were bigger than in the tower blocks and more solidly built.The lower ranks of officials lived in these:Higher ranks had slightly more space and balconies. At the time the buildings were grey instead of the frivolous pastel colours:The more important functionaries lived on the other side of the Main Street. Their blocks look unpretentious but the apartments inside are 50-60 square metres instead of 40-50 square metres. See the sloping roofs on these? It meant that top floor tenants didn’t have leaks through the ceiling when it rained or snowed.This one stands out a bit on the estate. It must have been for the higher ranks:1954:These days it looks like this:Most blocks had basements with small numbered storage spaces allocated for each apartment.The officials higher up in the ranks lived in places not normally in the view of ordinary folks, usually in villas with gardens, a bit out of the way, among other people in the same position in the hierarchy. Their houses looked more or less like these:Back to non party members:At 508 metres long, this building in the Praga district is one of the longest in Warsaw. High capacity blocks were promoted with pride.In 2008 the Sausage Dog housed more than 1200 people. In the times of the Polish People’s Republic there was a neon light along the roof, flashing through the night, annoying the frustrated tenants of the top floors unable to block the light out and sleep. The neon proclaimed some communist “brighter future” slogan.Since upgrading existing prewar housing was going slowly, the Sausage Dog served as an effective screen hiding the dilapidating tenement blocks of Szmulowizna from the gaze of the travellers getting off at the newly built Eastern Railway Station on the other side of it.Szmulowizna https://pl.m.wikipedia.org/wiki/Szmulowizna was a district which had survived the war, looking like this throughout the PPR period:Until this century the living conditions there were as they had been before the war.This is central Warsaw. The dark prewar tenement has only become vacant in the recent years. The outside of it is a reflection of the very basic conditions inside during the PPR period and after.This prewar tenement off Marszałkowska St is still inhabited. It was up to the inhabitants to make it comfortable for themselves inside. The cream one next to it was renovated this century.The prewar buildings in Warsaw remained very neglected during the days of PPR. Even the original elaborate architectural details were somehow obscured for years by the grey colour which uniformly dominated the streets.These photos were taken last month. All the renovation inside and outside is taking place now for the first time since the war:The dark grey was the result of the war fires, not car exhaust fumes:When they do it up it will look like a few other ones in the same street, which were renovated in the last few years:Environmentally friendly electric trolley buses and trams operated many routes in the PPR, alongside buses. Trams still do.1960:In the 1970s they remained overcrowded, but hanging out on the outside was no longer allowed.Postwar culture, health service and education were a continuation of the interwar policies and intentions.Cultural life in Poland was less restrictive than in some other countries of the EE bloc. Western films, music and literature were available on par with the home grown or with the EE equivalents.Regarding health service:Already in 1920 the obligatory health insurance scheme was introduced for wage earners - Kasy Chorych, with a cover for 39 weeks.The last decree signed before the war (spring 1939) by Poland’s President Mościcki introduced the plan for the comprehensive health service.In the postwar period the situation was much better than before the war, although not instantly. The new cadres were educated on an adequate scale by the 1960s. Local clinics, with specialist doctors, were appearing from then on. Continuing the interwar tradition, special attention was given to children and to prevention rather than cure. Similarly to the interwar period, school health inspections were regular. Additionally, full time in-house school nurses and sometimes dentists were employed at some stage, for several years.Education:Free and compulsory education was introduced in 1919 for 7-14 year olds. It later included plans for extending it to free university education. By 1939 90% of children were attending school. The post war system improved the situation further and eliminated illiteracy completely. Many spacious schools were built, with large windows, sports halls and playing fields.In 1929 social services were established in Poland, focusing primarily on the welfare of children and on alleviating homelessness.The interwar strategy of welfare changes was intended to avert communism by disarming the communist argument.The post war welfare reforms had their roots in the prewar plans and actions.

Question: How much coal did the old octopus hot air residential furnaces burn? How did they work?Those Octopus hot air residential furnaces burned a LOT of coal.Burning hard anthracite coal the owner of a small (about 1,500 square feet of heated living space) cape cod house in Wisconsin would burn ~4 tons (8,000 pounds) of coal in a heating season lasting from November through April. A 3,000 square foot older farmhouse with less insulation in Maine might burn through 15 tons (30,000 pounds) of coal in a heating season. That coal delivered in 1955 would have cost ~$235 per ton in today’s dollars. So that homeowner in Wisconsin would have spent $940 to heat his house in the winter and early spring. And the homeowner in Maine could have spent as much as $3,525 to keep his family warm.When one ordered heating coal in the United States one had two choices: Soft Bituminous Coal or Hard Anthracite Coal.The bituminous coal was cheaper. But it was softer, dirtier, and produced much more smoke. The hard anthracite coal cost almost twice as much per ton as soft bituminous coal. It burned hotter and produced maybe 10 percent more heat per ton. But it burned much more cleanly and produced much less smoke and soot. The difference was noticeable. As a child walking to school in the winter I could tell when I passed a poorer house or walked through a poorer neighborhood not only by the thick black soft coal smoke pouring from the chimneys but by the acrid smell of the air.One ordered heating coal from one of the local coal yards or coal companies. You did not have to look up the phone number in the Telephone Yellow Pages. These were important businesses and they probably had an advertisement printed on the cover of the telephone directory.But very likely you had their number in front of you on a coal company calendar on your desk or on the wall.Or you might have the name and phone number of your coal dealer printed on the thermometer nailed to your garage. Coal companies frequently gave these to customers as promotions.Heating coal was a seasonal business. So many coal companies in the 1900s through the 1940s also sold blocks of ice which were used for non-electric refrigerators, iceboxes, and by taverns. Thus, many of those companies were still in the 1950s known as Coal and Ice Companies.The bigger coal companies often sold, installed, and serviced furnaces and automatic coal stokers such as the Iron Fireman.The homeowner ordered coal by the ton at the beginning of the heating season and again later in the season as he burned through what he had. He could pay a variable market rate, which he often did if he had little money and could not buy two or three tons at a time. But coal dealers also offered a fixed price for the entire heating season if you signed a contract to buy from that dealer exclusively during the season. The terms were cash on delivery. A man with a bank account and a good reputation for paying his bills would be allowed to pay by check at the end of the month when he paid all of his other monthly bills.The coal would be delivered by a coal truck, an uncovered dump truck, and two Coal Men. The men were always covered with coal dust…not just their company coveralls, but their hands and arms and faces. There was just no way to avoid this.The truck would pull up close to the house on the street or back alley (which incidentally was usually paved with cinders produced by burning coal). The driver and his helper would then rig a chute that extended from the back of the dump truck to the coal door on the side of the house.The coal door was a large metal door, hinged on the top and latched on the inside at the bottom, that connected to the home’s Coal Bin.On those homes that did not have a coal door the coal was was dumped through an opened basement foundation window that was hinged on the top and opened and swung inwards.That worked if the distance between the street or alley and the entrance to the coal bin was relatively short. If not the coal men would have to set up a portable conveyor powered by a small putting rope start gasoline engine. The coal men with the help of shovels would dump the coal in the truck into a hopper on the end of the conveyor which would move it to to a chute which, hopefully, would direct it through the coal door into the coal bin. There was always spillage that had to be cleaned up by a coal man with a shovel. Enough was always left on the ground for children to play with and use for the eyes and mouths of snowmen.The coal was stored in a coal bin. This was a walled-off section of the basement near the furnace. The wooden door to this was commonly made of removable horizontal boards inserted into a slotted metal door frame.As the coal was burnt in the furnace and the level of coal in the Coal Bin went down, the upper boards boards, which kept the coal from spilling out into the basement, were removed so that the homeowner could get access to the coal as the pile went down. An alternative to this arrangement was for the coal bin to have a heavy two section Dutch Door which had hinged upper and lower sections. The lower part of the door was kept closed until the level of coal in the bin went down.OK. How did the coal get from the coal bin to the octopus? There were three ways of doing that. (Well, actually there were four if the family had a teenage boy. But we will not discuss that method.) Usually, two and sometimes three times a day, once before he left for work in the morning, once after he came home from work, and probably again in the evening, the homeowner would have to shovel coal directly from the coal bin into the furnace. Or he could carry carry the coal in a coal bucket from the coal bin to the furnace. There he would shovel it through the open waist level heavy cast iron door of the octopus and spread it evenly on the furnace grate.But, before he could do that he had to remove the unburned ash and cinders and possibly Clinkers from the fire chamber. What were clinkers? These were things that looked like volcanic rock.They could vary in size from that of a small potato to that of a large brick. They were agglomerates of contaminants in the coal and fused ash. They were produced either by poor quality coal or improper loading of the furnace or improper adjustment of the furnace damper and chimney draft control.Cinders and ash could be removed by first attaching a large heavy iron bar or crank to the grate shaker mechanism at the lower front of the furnace. This would move the Shaker Grates under the center of the burner allowing accumulated ash and cinders to fall to the Ash Pit below the grates at the bottom of the furnace. From there ash and cinders could be removed through the opened draft door with a shovel.In the photo above showing the burner grate removed from an octopus you can see the rectangular shaker grates at the center of the burner and the shaker handle at the bottom left.Clinkers were another matter. Too large generally to fall through the shaker grates, they had to be removed with a large Clinker Tool that looked like something a blacksmith might use or kitchen tongs from hell.The ash and cinders and clinkers had to be disposed of. They were placed in metal bushel baskets and these were taken out weekly and placed in the alley next to the garbage cans where they were collected weekly by the garbage men and their truck.One of the big advantages of buying the more expensive anthracite coal is that it produced far less ash and cinders which had to be shoveled out of the furnace and carried out to the alley than did the cheaper bituminous coal. Hard anthracite coal companies would advertise “Not a Bushel of Ash in a Ton”.Every house heated by coal had a coal shovel in the basement. This was a large, broad shovel with scoop sides to prevent the coal from spilling.But there was a third better alternative. If you were modern, and if you could afford one, you bought an Automatic Stoker, an Iron Fireman.These machines used a slowly turning long heavy screw or auger to move the coal either directly from the Coal Bin or from a hopper directly into the firebox of the furnace. In doing so they would also regulate the supply of coal according to the demands of the thermostat and would provide a forced draft of combustion air from a blower through a tube that ran adjacent to the one supplying coal.This not only eliminated the need for the homeowner to stoke the furnace several times per day but it provided steady even heat throughout the day and night and, by burning more efficiently, reduced the fuel costs by about 10% and reduced the amount of ash that needed to be removed and completely eliminated the clinker problem.How was the temperature regulated? The temperature of the house was regulated by controlling the rate at which the coal burned in the octopus. This was done by regulating the air flow to the fire. The air flow was controlled by the Damper, a door within the cast iron door at the bottom of the furnace that one used to remove ashes and cinders.This door had a sliding or rotating air shutter that, when the damper door was closed, regulated the minimum amount of air which kept the fire from going out when heat was not demanded or when it was banked for the night. The damper door itself was hinged at the top and could be tilted open to admit more air. The more the damper door was opened and the more air that was admitted to the furnace the hotter it burned.The damper door and the temperature were controlled via a Damper Regulator.This was a lever or knob placed on the first floor in the heated living area of the house.A damper lever was usually found at chair rail height on the wainscoting. A damper knob was located on the baseboards. Moving either one of these pulled a looped Damper Chain that ran on small iron pulleys inside the wall, across the basement ceiling, and down to the damper door and regulated the position of the furnace damper.If the house had an electric thermostat the damp door still controlled the temperature, but the damper chains were now operated by an Automatic Damper Controller.This was a heavy metal box mounted on a ceiling joist near the furnace. It contains an electric motor and a gear reduction drive and a sprocket wheel the wound up or released the damper chain. The damper regulator was controlled by a bimetallic switch in the thermostat that responded to room temperature.The coal burning hot air octopus furnace was large. If automated with add-ons like automatic stokers, blowers, automatic damper controls and electric thermostats, limit controls, day-night timers, atmospheric smoke pipe dampers, and built-in humidifiers, it could run almost by itself. But so modified it was much more complicated than a modern gas furnace. And it consumed a LOT of coal.Below is a YouTube video showing a restored Iron Fireman automatic coal stoker, removed from an octopus, in operation.Quora Reader Jeff Sturm asked: How do you light a coal fueled octopus? The process is much like building a camp fire. But, if you are conscientious, or if you have an Iron Fireman, you only have to do it once in a heating season. And you have the assistance of a a damper and perhaps an atmospheric chimney damper.The first thing you do is open the furnace damper on furnace ash door. This will insure that air flows upward from the damper up through the grates and out through the combustion chamber and out the chimney. It is this airflow that gives you a hot steady burn.Then you take a sheet of newspaper, crumple it to increase the surface area, and place it in the combustion chamber on the furnace grates. Then you place kindling, small pieces of dry wood that you have split into thin pieces with a hatchet and keep near the furnace, and lay them stacked in an open grid pattern on the newspaper. On this you carefully place six to ten spaced pieces of coal. Then you roll up another sheet of newspaper into a loose roll and, using a wooden kitchen match, light one end of it. Using this you ignite the crumpled newspaper and kindling on the furnace grates in several places.In seconds the differential temperature above and under the grate will generate an airflow that will turn into a steady draft up through the grates. The burning kindling will ignite the edges of the coal producing blue flames.Using a furnace poker you move the now burning pieces of coal together and add additional coal. When the entire grate is glowing nicely you shovel in more coal, shut the furnace door, adjust the damper for running, and turn on the automatic stoker, the Iron Fireman.If you are not fortunate enough to own an Iron Fireman, each night you bank the fire, that is, you let the fire die down, gather the burning coals closely together, and pile the hot ashes around them, and close the damper for minimal but sustaining airflow. Then in the morning you add more coals and open the damper to restart the fire.