Seeing as how the stock market is tumbling. Spending is at a low. Layoffs galore, inflated unemployment rate. They can't keep the lights on in California. Energy crisis on the horizon. Mad cow and hoof and mouth disease could put a crunch on some of our food supply. Weird weather and global warming (deforestation is still on the rise unattested) are causing some serious catastrophes around the planet, including drought. No crops = bad. Very similar events to what caused the Great Depression back in the 30s. I wonder if the next Great Depression is in development, or if we have too many safeguards this time to allow it to happen. For certain however is that if the USA goes in the dumper this time, it'll be worse for the entire global community than it was last time. And since America produces a fraction of the goods it did in the 30s, I believe our global worth would be pretty stinky. Any thoughts?
Prepare for giant dust clouds And not only figuratively. It's interesting that you mention layoffs (although it's a national situation to be sure). My company is currently laying people off. Fortunately, I'm good enough for it not to affect me ... <i>yet</i>. Anyway, my coworkers and I were discussing the fact that California (especially So-Cal) has mismanaged its resources to the point that Calif has to draw in power from several midwest states, Utah being the chief distributor among them. With the impending energy crisis compounding the plight, it seems reasonable to assume it's only a matter of time before the Midwest caters much of its resources to keep Calif afloat. Apparently, it's been in the ballot measures in the past for California to separate northern from southern California, i.e. to create two separate states. Of course, southern Calif doesn't want this (and they hold the more influential political sway anyway) because of its tenacious hold on northern Calif. I thought it was interesting that you noted: <blockquote> <font size="1">quote:</font> <hr> <i>Originally posted by <b>spanklin</b>:</i> Very similar events to what caused the Great Depression back in the 30s. <hr> </blockquote> It seems that things can get cyclical, especially if people <i>don't</i> learn from the past. But, maybe it's one thing learning from the past, and quite another trying to ensure that it doesn't happen again when confronted with the same conditions. <blockquote> <font size="1">quote:</font> <hr> For certain however is that if the USA goes in the dumper this time, it'll be worse for the entire global community than it was last time. <hr> </blockquote> Yeah, especially considering that the USA plants its hands into more locations than a virgin on his wedding night. (All right, terrible simile <IMG SRC="images/icons/icon7.gif" HEIGHT=15 WIDTH=15 ALIGN=ABSCENTER alt="Smile">). But seriously, having roots in many different locales emphasizes the effect it could have on the global economy <i>if</i> the US ends up getting a brake check by its economy. thanks, prag
Yours is a country of hypochrondriacs, and you're going to drag the whole world down with you. This is a recession that was willed into existence. Perhaps I'm just bitter because Canada will be in ruins for another decade if things go wrong down south. And just at the moment when the state of the world actually affects me! Curses!
Sniff ... wheeze ... hack, cough, sneeze .... And I can tell you exactly why: political capital. The only reason I mention this obvious candidate is that it's so bloody naked. One of the current "trends" recognized in tavern poliics--and I will state right here that I trust tavern politics more than the editors of any large newspaper--is the notion of the economy as the electoral decision. If the economy is "good", a president or party is re-elected to the executive. If it's bad, we turn the country over to the other fools in neckties. Thus ... If George Dubya successfully convinces the people that a recession is afoot, it means that the economy need only remain as it is for the next four years, and he will be re-elected. Zero loss equals ground gained if people believe there is a recession. Thus, if unemployment is no higher at the end of four years, if the debt is only as large as the military budget demands, if taxes don't rise, and if the interest rate stays somewhat respectable, George Dubya gets a second go-round. If we sink into true recession down here, I think history already knows when it started. The ... second week of January. Economists hollering that there is no recession, and what does Time magazine run for its cover? How to survive the coming recession. I quote John Lennon: The dream is over; what can I say? After all, we're Americans. We are the brightest people in the world. If Time magazine says it's true, it must be. Dave, I just watched South Park: Bigger, Longer, & Uncut for the nth time ... would y'all do us a favor and really bomb the Baldwin family? It'll take our mind off the recession. Incidentally ... I just saw for the first time a spot for Parker & Stone's new show, That's My Bush. Can laughter save the world? thanx, Tiassa Please Register or Log in to view the hidden image!
The economy is just adjusting The country may or may not be going into a recession, but another Great Depression is highly unlikely if not impossible. The first thing is what really got the Great Depression rolling was a run on banks. Now we have more control over banks through the Fed and risks of banks defaulting are low. As an economist I don't even think we are going to a recession. There was a massive technology shock and the economy started growing. The Fed controlled the growth to the point where there was little inflation and if anything the Fed was too tight with monetary policy. With increased technology lowering costs more firms were able to enter the market, mostly in the e-commerce sector, with bad business models. These companies stock prices rose with no profitability but more importantly the poorly planned business models made future profitabilty highly unlikely. As soon as consumer confidence started to fall and people realized that they were pumping money into inefficient ventures the market started to adjust. The important thing to note was the market was overvalued. I see this as nothing more than the market adjusting back to efficient levels. At this point only the efficient firms remain and the economy is stabilized after the productivity shock, not really anything to worry about. In fact I think once we settle in at the point where resources are efficiently allocated, we are in a position to have another boom. To be competive in equilibrium innovation will once again be needed and may push another productivity shock, by those firms that can exploit new technologies realized by the last shock in the best manner.
Hmm, and I thought it was just another business cycle. So, we won't see ExoSci selling on the NASDAQ for $200 a share within the near future? How's your business model, Dave? are you going to start charging a monthly fee for these forums?
