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On February 21 2009 19:59 rushz0rz wrote:
Alright guys. Looks like we're headed for a deep Depression, probably as bad as the Great Depression.
Obama just signed a Buy American provision, and even though it's relatively small on what it's asking for, the US will go further. The world is going to hit a Depression some time next year. Even my History teacher said that sometime next year lots of malls would quickly have less stores and there will be literally no work. My teacher said we're kind of lucky because he said we'll be going through college/university while it happens.
I know this is a bit drastic, but I think I'm joining the army if it get's as bad as most predict. The sad this is, wars are the only thing that brought us out of the Great Depression.
Eh, are you trying to suggest that Obama's Buy American provision is similar to the result of the 20s in the war of protectionism between countries? It isn't that much of a leap in logic, I suppose, but the situation today and the situation before the great depression has changed significantly. Krugman wrote in his column (or rather, blog) a few weeks ago concerning the stance taken by the Obama Administration on the issue. He proposed that it was the second best option given a lack of globally coordinated action, as protectionism would allow the capital investment to be contained within individual regions. Should he prove to be right, the issue simply falls to the dismantling of such policy when the economy gets back into normal gear again, and protectionism as a temporary measure becomes a valuable object. Personally, I agree with his take of the situation. This isn't the time of the Napoleonic Wars when foreign trade policy is dictated by immediate need, nor is it a time when we have sharply contracted money supply creating further shocks in the economy. Given the international body's inability to coordinate effective measures, it would be best if the money spent from each nation to be restricted within the nation, the area that they are meant for. In that case, light protectionism, or even a cascade of increasing protectionist measures, would be the best way to allow government investment to remain packed.
Your teacher is right though, undergrad at this time would be awesome, with luck you'll graduate as the economy is booming and have an easy environment for grad too :p
On another note, good job GM, shedding Saab when it became obvious that we can't extort money from the Swedes. Seriously, we think the financial sector is bad?
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http://online.wsj.com/article/SB123457303244386495.html
It's not as bad as the great depression at all. In the great depression, everywhere you went, you saw people lining up to get food; you saw people sleeping on benches using newspapers as cover; you saw people freezing to death because their clothes were inadequate. To compare the two is absurd. Not only are the times completely different, but the standards are too. Most unemployed people in the United States still have a roof over their heads, still have food on the table, still have clothes. Comparing the two really just undermines how much more harder times were back then.
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On February 22 2009 06:43 gchan wrote:http://online.wsj.com/article/SB123457303244386495.htmlIt's not as bad as the great depression at all. In the great depression, everywhere you went, you saw people lining up to get food; you saw people sleeping on benches using newspapers as cover; you saw people freezing to death because their clothes were inadequate. To compare the two is absurd. Not only are the times completely different, but the standards are too. Most unemployed people in the United States still have a roof over their heads, still have food on the table, still have clothes. Comparing the two really just undermines how much more harder times were back then.
I agree that the current situation can't really be considered as bad as the Great Depression. I will say, however, that one of the (perhaps THE) biggest difference between today and the 1930's, in terms of mitigating the amount of human suffering, is the social safety net put in place by FDR. Without it, we would be seeing a whole lot more people without the basic necessities of life.
I just say this because FDR seems to be the target du jour of Republicans. Not only do most of them believe that the New Deal didn't help to stave off an even worse economic situation, but it seems these days that some of them even think he _caused_ the Great Depression.
No one ever mentions it, but it's really hard for almost anyone to argue that things like social security, unemployment assistance, disability, etc, are extremely important to help prevent the worst kinds of human suffering in times like this.
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Plus the great depression lasted 10 years. If this continues for another 9-10 years we will be able to make similiar comparisons.
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United States22883 Posts
Republicans make that attack for political purposes. It's liberalists who have made a strong attack against the New Deal/social policy and 99% of congress people, independent of party, are not liberalists. They haven't read Hayek/Friedman and they certainly wouldn't agree with them.
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Does anyone have an idea what percentage of homeowners took loans they can't afford versus the amount who are in trouble because of the economy and losing their jobs? Is this even possible to sort out?
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I just say this because FDR seems to be the target du jour of Republicans. Not only do most of them believe that the New Deal didn't help to stave off an even worse economic situation, but it seems these days that some of them even think he _caused_ the Great Depression.
There is a strong case that many elements of the New Deal increased economic inefficiency, and therefore delayed recovery. The charge isn't that Roosevelt caused the Great Depression- that was due to the stock speculation of the roaring 20s backed by credit-driven consumption, but that the New Deal delayed economic recovery.
Relative to the World, the United States took a fairly long time to recover from the depression- not until around 1940. In comparison, Germany, equally hard-hit by the depression, and which like America used massive spending programmes faced labour shortages by 1938 simultaneously with rising disposable incomes.
Roosevelt's attempts to subsidize farmers to decrease agriculture production, subsidize wages, discourage competition, and regulate labour were all harmful to American economic recovery. His policy of trying to maintain high wages not supported by increased production is astonishingly similar to what we see in today's political arena, with the caveat that American confidence through the Roosevelt years remained relatively sound, whereas today this essential faith in the political system is questionable. Even after freezing the dollar's convertibility into Gold, the value of government bonds remained steady throughout the 30's. A good indication of whether we are heading for something worse than the depression is to see if the safe haven of the bonds market collapses under the inflationary pressures of the present policies.
No one ever mentions it, but it's really hard for almost anyone to argue that things like social security, unemployment assistance, disability, etc, are extremely important to help prevent the worst kinds of human suffering in times like this.
Let us not forget that the American citizen, by any modern standard of "human suffering," has, in both peace and war, seemed blessedly fortuitous to the rest of the world. Had the Okies been migrating through Europe with their automobile in the 30s, they would not have been taken for economic refugees, but for well-to-do elite. When you speak of mitigating worst kinds of human suffering, you are referring to, more or less, the maintenance of the structure of the American middle-class and preserving their relative social dignity in unfortunate times. In 1919, daughters of respectable middle-classed families were seen prostituting themselves on the streets of Vienna, as the spiritual integrity of a whole nation was crushed. America has never experienced anything like this, and the middle-classes, which really came into existence in it's modern form in the United States in the 20's, has become recognizable no longer by their behaviour, breeding or even material prosperity, but by their prescription to certain fashions of consumption which they believe to be essential to their social dignity.*
The kind of welfare then, we are talking about, is no longer about the direct material needs of a person, but the degree to which his needs are inflated by a democratic social structure. That those needs will keep inflating, and will become increasingly decoupled from a person's purely material interests, seems clear. Meanwhile, the bureaucratization of society, including of welfare probably aids and accelerates this inflation by depersonalizing all social institutions where non-material personal needs may otherwise be met in an organic society, and increasing the individual's dependence on a public, symbolic, socially insensitive and emotionally unsatisfying means of cultivating respectability.
*The 19th century was probably the only century of materialism, if we can call it that in the modern age. During the 20th century, the decreasing value (and solidity) of money, and the inflated needs of social vanity across the broad spectrum of society means that spending has become more important than earning, and what being wealthy means today is something different than it was a hundred years ago. Surely there is a psychological cause of our present debt-driven crisis that is worth speculating about.
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Good to have Moltke back, great post.
And two things:
The Credit Crisis visualized (very well done): http://www.vimeo.com/3261363
Any hopes that Obama had some free-market sympathies have been eradicated.
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On February 21 2009 19:59 rushz0rz wrote:
Alright guys. Looks like we're headed for a deep Depression, probably as bad as the Great Depression.
Obama just signed a Buy American provision, and even though it's relatively small on what it's asking for, the US will go further. The world is going to hit a Depression some time next year. Even my History teacher said that sometime next year lots of malls would quickly have less stores and there will be literally no work. My teacher said we're kind of lucky because he said we'll be going through college/university while it happens.
This is not true.
There's a fundamental difference between now and the Great Depression, in terms of preventative methods taken by government bodies around the world -- pouring money into the system.
Eventually, the economy will stop falling because the central bankers will use available money to seduce consumers and businesses to increase spending, and the governments are also increasing spending significantly. This increases aggregate demand, which in turn will pull up output.
There is a reason why your history teacher is not teaching economics...
It is true that those who are still in school are more fortunate and those who are not.
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On March 01 2009 15:56 Cambium wrote:Show nested quote +On February 21 2009 19:59 rushz0rz wrote:
Alright guys. Looks like we're headed for a deep Depression, probably as bad as the Great Depression.
Obama just signed a Buy American provision, and even though it's relatively small on what it's asking for, the US will go further. The world is going to hit a Depression some time next year. Even my History teacher said that sometime next year lots of malls would quickly have less stores and there will be literally no work. My teacher said we're kind of lucky because he said we'll be going through college/university while it happens. This is not true. There's a fundamental difference between now and the Great Depression, in terms of preventative methods taken by government bodies around the world -- pouring money into the system. Eventually, the economy will stop falling because the central bankers will use available money to seduce consumers and businesses to increase spending, and the governments are also increasing spending significantly. This increases aggregate demand, which in turn will pull up output. There is a reason why your history teacher is not teaching economics... It is true that those who are still in school are more fortunate and those who are not.
Just because we are doing something different this time does not necessarily mean it won't be as bad. In fact, I'd say if these measures currently being taken don't work, it will be far worse. As Moltke pointed out, a collapse in the bond market may be what is in store for us if this doesn't work.
We are in uncharted waters here. There are a lot of fundamental differences between now and the Great Depression.
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United States22883 Posts
It's interesting (but not surprising) that most people are unaware of the consequences of the original NIRA and what exactly FDR tried to get pushed through. Aside from the fact that it removed race from American politics for several decades, the US government also tried to fix prices and wages on certain items, like poultry - a nice massive dose of collectivism before we fought the Nazis/Russians.
Obama is using the crisis to make structural changes to American society, something you can really only do during crisis. I can't say I'm totally against the Sweden-ification (it's not France) of America. Republicans can complain all they want about him passing a social agenda disguised as an economic agenda but they'd be doing the exact same thing, just as they did under Bush and Reagan. It's amazing that he's still trying to negotiate and be civil about it, when he could really ram it down their throats like FDR did.
Moltke, I'm curious what your solution, if you have one, to the bureaucratization problem might entail. Weber never came up with an answer for Prussia, and Hayek/Lowi's response is simply impractical and is arguably less democratic than what we have now.
On March 01 2009 16:11 fight_or_flight wrote:
We are in uncharted waters here. There are a lot of fundamental differences between now and the Great Depression.
This might be the best thing anyone has said in this thread. We're not headed towards the Great Depression, but we don't know where we're headed.
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U.S. is like a Ponzi scheme. The difference between Great Depression and now? You have 11 trillion in debt.
Stop the opium war at Afghanistan and oil war in Iraq and you have already saved a lot of money..
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United States22883 Posts
Western Europe isn't holding together very well atm either.
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Northern Ireland1200 Posts
On March 01 2009 14:42 shmay wrote:Good to have Moltke back, great post. And two things: The Credit Crisis visualized (very well done): http://www.vimeo.com/3261363Any hopes that Obama had some free-market sympathies have been eradicated.
Nice video. Really explains it well.
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Projections are wonderful things, and give us some considerable satisfaction and security when living into the future, as the modern dissatisfied generation often tries to do. There were ages when the chief intellectual pursuits of men were predominantly reflective; believing that although we live forward, we can only think backward; that all our knowledge about the future cannot but be the reflections of our knowledge about the past. Today, it is comforting to know that the empirical sciences have advanced to such great sophistication, that understanding of the causal relationships of the physical and psychological universes so thoroughly improved, year on year, that clairvoyance is at last liberated from its temporal impediments.
Lest anyone doubt me, I give as exhibition the following information:
I'm looking at the Federal Reserve Board's report from November 2007 on GDP growth projections for 2008 and 2009:
2008: 1.8-2.5%
2009: 2.3-2.7%
2010: 2.5-2.6%
Unemployment rate projections by the same source:
2008: 4.8-4.9%
2009: 4.8-4.9%
2010: 4.7-4.9%
Let us ook at how some of these other sources hold up taken a little further back, to Febuary 2007:
GDP growth in 2008 (Moody's): 3.2%
GDP growth in 2008 (Blue chip): 3.0%
The wisdom of economic prophets live after them, their mistakes are often interred in their bones. So let it be with these figures. My noble friend warding has told you of economic recovery, and if it will be so, it will be a blessed joy, and blessedly will we meet it. I show these figures not to disprove what wardo has said, but to show what is known. My only question remains to wardo is: how has the science of economic prophecy advanced in the past twenty-four months to such an astonishing degree, that they have aroused such confidence in you? I ask these questions of him, for my friend warding is a wise man, and the persons from whom his information flows, all wise men, come I to rejoice in our economic recovery.
Moltke, I'm curious what your solution, if you have one, to the bureaucratization problem might entail. Weber never came up with an answer for Prussia, and Hayek/Lowi's response is simply impractical and is arguably less democratic than what we have now.
I weary to say that I view the increasing bureaucratization and depersonalization of society as inevitable.
I am not as great a seer as my friend warding, and I cannot project the future with similar certainty. I only extrapolate the reasonings of others and combine them with my own observations. Tocqueville, who foresaw the possibility of the devolution of American democracy into a kind of despotism "extensive and mild....degrading men without tormenting them..." (he did not use the word bureaucracy) also considered by his time, that the transition of of Aristocratic societies into democratic societies was inevitable, but that the fortunes of democratic society, whether they led servitude or freedom, barbarity or knowledge, were largely dependent on the people themselves. He also did not believe that this could be determined by institutional policies: “My greatest complaint against democratic government as organized in the United States is not, as many Europeans think, its weakness, but rather its irresistible strength… I am not asserting that at the present time in America there are frequent acts of tyranny. I do say that one can find no guarantee against it there and that the reasons for the government’s moderation must be sought in circumstances and in mores rather than in the laws.”
There may yet be a reaction similar to the Romantic reaction of the 18th century, again bring to public consciousness a desperate need for an authentic kind of individuality created by inner self-fulfilment, and based on organic relationships to family, nature and community. As it is, society's relationship to government as of today resembles that of a psychopathic child, being increasingly dependent on it but increasingly resenting it all the same, and like him, there is little chance that it is willing to shed either attribute in the long-run. There are certain institutional changes which may be better or worse for a certain situation, but its success or failure is in my view rooted in circumstancial factors. In the democratic age we can no longer think like Plato, about idealized synthetic commonwealths, even though that doesn't stop modern politicians from trying.
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Cayman Islands24199 Posts
well now, the so called democratic spirit in america takes both active and passive/negative forms. the active current calls for positive, democratic actions social and political, and is exemplified by the democratic pragmatism of dewey and community organizations on the left. it is a vision of an active political society that has the people as the agent, even though a great portion of its energy is dispersed through government institutions. on the other hand, we have the rights based, negative reaction to government exemplified by libertarians and jeffersonians of old. their view of society is that of a well ordered space of personal development, and the governmental authority is only found in the law, not in bureaucrats sitting behind desks. i will say that this current is reactionary, and it is an attitude found not exclusively among libertarians etc. at the very least, the rhetoric of lower taxation, less bureaucratic waste, spending our money for ourselves etc holds great purchase with the public at large.
most people will take either of the two attitudes toward government depending on whether the policy in question is agreeable to them. on an issue like social programs for immigrants, the real point of departure is over people's attitudes toward immigrants, not their attitude toward welfare. since government actions affect different groups differently, many of the debates over government are in fact mirroring social attitudes toward different groups of people.
in any case, quantifying government control is not as simple as looking at the size of the government sector, nor is it merely dependent on how many regulations are on the books. spending a trillion on f-22s is not the same kind of government presence as spending it on social programs, given the same method of taxation.
as for the future of the administrative state in america, im tempted to understate the changes. the reason obama won is not due to a large groundswell for the scandinavian model (and it is far from that really), and the general perception of government has not changed too much. if anything, libertarians are increasing, on the internets. public perception of how well the government does still depends on the handling of individual issues, and for most it is a judgment of competence, not ideological victory. nevertheless, the chorus of "omg socialism!" is more fun to listen to than the assorted liberal chatter.
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What's fun to listen to is the way people partition the mass of public opinions and beliefs into arbitrary categories to which they can apply moral approval or outrage. There's nothing too funny about this if they are not taken too seriously, but it becomes comical when our narrator becomes no longer interested in analysing anything but the object of his fantasies.
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Cayman Islands24199 Posts
as arbitrary categories go, antiquated ones are the more oblivious. then again, all of political philosophy is just random people voicing random opinions, with no commonality to be found. pity the fool who thinks otherwise!
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EPT![[image loading]](http://graphics8.nytimes.com/images/2009/02/27/business/0228-web-RECESSIONjp.gif)
