Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.
Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.
We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.
And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.
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Good article by Kenyesian Krugman. Problem is he wants to QE another $3-$5 trillion bucks, but its like jump starting a car with no gas.
ReplyDeleteSorry Paul the Kenynesian economics of yesteryear wont work now, stand aside and let the Austrian school take over.
Gee, I wonder why Libya was suddenly taken off the Terrorist List and suddenly accepted as an Ally. So i ask, whose the Terrorists? Libya, BP, Big Oil, Multi-National Corps, the U.S. Gov't which is owned by the Multi-National Corps....all of the above?
ReplyDeletehttp://www.libyaonline.com/business/details.php?id=14379
http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7033600
From the Libya Online article (can you imagine such a thing, Libya Online, 20 years prior?):
Shukri Ghanem, who serves as the North African nation's de facto oil minister, told a conference on Tuesday that the spill is "a real tragedy, but in a way it's exaggerated."
Bank over leveraging and implosion of credit default derivatives will collapse the economy. All hope is gone because it is planned by the banking cartel.
ReplyDeleteThis guy is a bit umm, how should I say... orthodox? It is sad to watch what people mistake as an educated authority be nothing more than a dumbass. What he had to go through to get his little degree to be considered credible seriously dimmed his brain. Outside of the financial slavery and spiritual manipulation mankind has been a victim of for 6,000+ years, schools are a thing that will need to go following the "Third Depression". That way we won't have to be subjected to these kinds of clowns any Long-er.
ReplyDeleteProblem One) This guy still thinks along the lines of what Obama should or should not be doing, what our leaders need to get done for us, left and right, etc. - no one could still have that much brain fog could they? I see the link there leads to the New York Times, does he work for them? I wouldn't be surprised, he sounds stupid, most Progressives are.
Problem Two) He wants them to spend more? Is he insane? Is he some kind of desert nomad or bedouin who hasn't ever touched paper money before and just assumes that it can go on to infinity and all you need is the resource that's used to print it? The guy is advising them to do one of the major things that got us in this mess in the first place.
Problem Three) To use history, especially just two eras, to figure out how bad this era will be or what it will be like is very misguided. There are things today that could make any comparisons irrelevant. Today things happen at lightspeed, in other words everything is uber expedient such as water, food, transportation, information, killing (faucets, microwaves, jets, internet, assault rifles), how could you make any correlation to the 1800s/1930s to today? I guess he could also bring up the Egyptians and what happened when the Nile didn't get rain or the Mesoamericans suffering droughts, maybe he could talk about what the English King needed to do to stop his starving serfs? Well, this guy wouldn't be able to figure out the king just needed to stop hoarding the food, he would start thinking the King needed to make better choices for his people, and regulate things more. Either way you could throw any hard time in there and use that as an analogy to match up today's imminent crisis. The truth is that the United States is not even the same thing as it was then, the country actually altered systematically both times in between those periods. Today it is in the process of its final tweak (death blow).
There is no linear way of explaining all of what will happen. It is far more complex than that. The centralized order of the western world is about to shatter and what you'll have is a massive free for all with many different groups at play. The technology will be grabbed at and many communities will form up as their own countries (families, towns, neighborhoods). Then you'll have the different gangs or activist movements trying to take power in different places. And perhaps guys who commanded battalions within the military will try to act as local dictators by gathering their unit where they are and manipulating them. Yes you'll also have released convicts and criminals trying to scheme their way into things. And this is all going to be happening on a very wide scale.
If the central system does not collapse in the way this guy is too short sighted to imagine then what we will have is a nice big Marxist system where no one will strive for anything since it won't be allowed or rewarding and everyone will be in poverty except for psychotic celebrities in Hollywood or the Elites in Washington. Sadly, since the people in nations that have Socialist governments generally don't work at all, Americans will still be working their asses off 80 to 100 hours a week. The difference between the old America and this new America is that the old America made way for beneficial technologies and conveniences, and people were able to afford them as luxeries. The new America people will only be able to afford food and their homes, if they're lucky enough.