Well, the cat is now out of the bag. Paul Farrell, a columnist with the digital edition of the Wall Street Journal is making a persuasive argument that a full blown depression will be descending upon us in a few years. The article can be found in the Rock Trueblood web link on this page, in the 19 November column. In the modern passion for numerology the WSJ columnist lists thirty reasons why an economic depression is inevitable for our economy by 2011, and they make unsettling reading.
.The long and the short is that the bad habits that brought us to this pass haven't changed among financiers who are still burning up taxpayer dollars in the profligate ways they burned up their investment capital. Add to that the fact the government bail outs aren't helping and as the rescue efforts fail government is sinking into veils of secrecy,always a bad sign.On top of that there are thousands of lobbyists who are pushing agendas tat almost certainly have no good outcomes for taxpayers. And finally we have a government pushed by a nation that has no interest in tax increases. Everyone it seems wants to avoid pain, and avoiding pain will make the recession flop into a depression and then the pain will just get worse.
.A lot of people still think the Great Depression took place one afternoon in October 1929 and from there all was bleak despair. Actually the depression took several years to bite, with bank failures leading the way in a gradually increasing cascade, and the stock market dropping, holding its own, dropping some more and so on over about three years. It was a pattern not so very different from our own. Deflation is taking hold now, assets of all kinds are up for sale, prices are plummeting and we want more government help at all levels. Add to that world wide insecurity as the enormous consumer engine of the US buying power fizzles out and unemployment is spreading across the planet as fast as a California wildfire.
.I have no idea what is coming but if it is a depression I have no idea either how to prepare for it. One of the lessons I have learned from this current recession/depression fiasco is that even being able to predict in some form what may be about to happen doesn't mean ordinary people can figure out what the hell to do about it. By this stage we are pretty much trapped in our lives, unable to sell our homes, unable to change our jobs, unable to save much cash... and what little we have salvaged may yet vanish in a spiral of inflation or a poor investment choice. This crisis engenders a very uncomfortable feeling of helplessness in me.
. It seems impossible to imagine a future as constricted as that period our grandparents lived through in the thirties, but if it does come to pass I trust we will find new and cheaper ways to cheer ourselves up as we get done what has to be done. It does rattle one's cage to read such discouraging stuff in the Wall Street Journal. I plan to enjoy this civilized 21st century life, in moderation, for as long as I can.
6 comments:
I have seen the apocalyptic predictions too, and more articles that predict this is "merely" an awful (the worst since the 30s) bear market that will start a slow, slow, recovery in 4q 2009. No one really knows, but I know this--you can find support for any position on this you want, whether from the WSJ (an increasingly more dubious source since they were sold, in my opinion), NYT, CNBC, or thousands of blogs. On CNBC.com the other day, two lead stories directly contradicted each other on such predictions. In any event, don't put too much reliance on any one source--I think the media loves the scare stories. So you have to "index" your sources, so to speak. For example, at least the TED spread (google it) is getting better. Hopefully all that cash on the sidelines will come back in next year sometime. Hopefully.
I can't understand how it is that people think they can see in to the future. I mean things will be very hard for a great many people is no exactly the art of prophecy fine tuned, but telling people what to with their money based on tyour crystal ball seems rash at best.Glad i'm not a reporter anymore.
Since no one really knows what it is going to be like 6 months from now, when I get too scared by the economic news, I go find the articles saying "it ain't so bad." That balances out my fear to manageable level.
I certainly don't get my news from TV--full of talking heads looking for drama, trying to fill time between commercials....A dozen news channels on air for 24 hours a day cannot be a good thing.
Just please keep blogging, you are part of my escape from bad news.
This too shall pass.
I have rentals in the keys and they all booked up for the season, and I gave no discounts. The people don't really come down till a day after Christmas.
Spring was slow, then Summer was normal-busy for my rentals since it's a fisherman's paradise.
I'm not worried-the trick is to have no bebt.
I have rentals in the keys and they all booked up for the season, and I gave no discounts. The people don't really come down till a day after Christmas.
Spring was slow, then Summer was normal-busy for my rentals since it's a fisherman's paradise.
I'm not worried-the trick is to have no bebt.
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