Food, Home and Style

Redux: Bootleg Nation?

Lynn Parramore looks back on the Great Depression to see the path ahead.

How do consumers save when they make less than ever before?

Sometimes, they take their business underground. Call it the Downturn Hustle. As folks tighten their belts on just about everything, certain bootleg activities are on the rise.

That’s nothing new. When Prohibition went into effect in 1920, bootleggers got busy providing alcohol to speakeasies and thirsty consumers. By 1929, the year of the Great Crash, a vast underground industry of black market booze had arisen, an illegal trade unlike any the US had ever seen. Gangsters got rich, grew violent and became celebrities as newspaper stories and movies covered their exploits.

As the Depression kicked in, the combined facts of widespread joblessness and increased crime put pressure on lawmakers to repeal the 18th Amendment. In the presidential election of 1932, the Democrats, who had run on repealing Prohibition, won a landslide victory. Before 1933 was over, Prohibition was finished, but states retained the right to prohibit the importation or transportation of intoxicating liquors. On the night of March 15, 1935, ax-wielding Rangers sprang on night clubs in Houston, Galveston, and Austin, pouring bootleg beer down the drain and seizing cases of liquor.

The end of Prohibition really didn’t do much to put the breaks on organized crime. Criminal organizations simply diversified into gambling, loan-sharking, and eventually, narcotics. Some of these sectors are getting re-energized in today’s downturn economy.

At one end of the bootleg spectrum, you have consumers trying to save a few bucks. The Recession has already seen a rise in online bootleg movie downloads. When a night at the movies can cost $40, people turn to sites that offer free movie downloads – some of them DVD quality. A little time on these sites reveals new releases, classics, and everything you need to watch bootleg movies on your TV or PC.

Some bootleggers are feeling the heat themselves, as consumers demand lower prices and better quality for knock-off products. Recent raids on fake Nikes and purses have led some hustlers to move on to greener pastures. Vendors selling unlicensed t-shirts at a recent Phish concert were given the boot by a judge in Hampton, Virginia.

Unlicensed t-shirts are one thing. But there’s more dangerous stuff floating around on the black market. When people get desperate, some turn to drugs, pushing up demand. The most frightening drug of the current downturn is Crystal meth, which is made in bootleg labs where its quality, strength and purity are unknown. Narcotics officials are already noticing a spike in meth production spurred by the Recession.

Organized crime has historically proven to be a recession-resistant business, and this time around is no different. Around the world, organized crime syndicates are stepping in to fill the void left by the credit crunch. Businesses and cash-strapped consumers trying to stay afloat are turning to mob loan sharks in Italy, South America, and the UK, where the government has gone so far as to set up a helpline. The bite of sharks is felt in the US in the form of payday lenders, who give cash to customers and often leave them in a downward spiral of heavy interest payments. Such activities are not technically illegal in some states, but so far this year, lawmakers in 11 states have introduced bills related to payday lending.

These kinds of predators sure seem scary. But from the sound of things, certain bankers and financial wizards could surely give them a run for their money. If consumers can’t get credit or be made to feel more secure about banks and other legal financial institutions that have compromised their trust, they’ll turn elsewhere. Legal or not.

Tags: black market, bootleggers, booze, credit, gangsters, meth labs, movies, Prohibition, Redux