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The "D" Word |
rffrydr
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 Posted: Sat Oct 18, 2008 8:48 am Post subject: The "D" Word |
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As mentioned in another post, the word "depression" seems to have been rarely used during the actual event. Factiva hasn't been applied there, yet. But in the here and now, yes:
| Quote: | Depression obsession
Published: October 17 2008 15:12 | Last updated: October 17 2008 19:47
The old joke says that a recession is when your neighbour loses his job and a depression is when you lose yours. But the reality is that economists have no firm benchmark for what distinguishes one from the other. This has given rise to some unwarranted comparisons between today’s crisis and the calamity of the 1930s. Type the term “Great Depression” into the press search engine Factiva and nearly 11,000 references over the past three months pop up, almost four times the same period a year ago. Several articles refer to recent stock market gyrations or house price declines, which are indeed some of the worst since the 1930s. Even so, a bit of perspective is in order.
From 1929 through 1933, the United States saw real economic output fall by nearly a third and unemployment soar from 3 per cent to 25 per cent. Stock prices took a quarter century to regain their peak. Since then, referring to an economic downturn as a “depression” has been seen as alarmist. Carter administration economist Alfred Kahn was famously admonished when he warned of one (he cheekily called it a banana instead). Even the worst postwar downturn, from 1973 through 1975, saw US output, from quarterly peak to trough, fall by almost 3 per cent and unemployment rise to 8.3 per cent – nasty, but a different order of magnitude entirely.
When that recession began, Ben Bernanke was a university student, Hank Paulson was just joining Goldman Sachs, and many of today’s masters of the universe were still in diapers. But the fact that they might have needed them again during the past several weeks does not make the looming downturn a depression. In spite of George Santayana’s famous warning about being condemned to repeat the past, the policy mistakes of the 1930s are the most-studied of all time. Unless governments reverse their forceful response – with ruinous trade wars, tighter money and balanced budgets – “depression” will remain a word for the history books. |
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The "D" Word Replies |
HenryTo
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rffrydr
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| Posted: Thu Feb 19, 2009 10:10 am Post subject: |
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"Loose your job and the fare is on us."
http://www.jetblue.com/promiseprogram/
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rffrydr
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rffrydr
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rffrydr
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rffrydr
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| Posted: Fri Feb 13, 2009 6:21 am Post subject: |
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Protectionism refined:
| Quote: | Short View: Defining protectionism
By John Authers
Published: February 2 2009 18:50 | Last updated: February 2 2009 18:50
We may need a new definition of “protectionism”. Dictionaries say the word refers strictly to a policy of deterring imports with high tariffs.
But there are other ways to discourage imports: wildcat strikes in the UK aimed at keeping British jobs for the British; governments’ attempts to deter companies that have received public capital from investing outside their home country; exchange rate moves that revive talk of manipulation; and complaints that the scale of borrowing by the US will crowd out efforts by other governments to do so.
All reflect ways of “protecting” local economies at the expense of global trade.
These developments imply that the world might yet slip into the beggar-thy-neighbour trade policies of the 1930s even without adopting the explicit tariffs. They help explain why equities are selling off once more.
If there was a return to economic nationalism, its effect would be to ensure almost unified and universal market falls. The S&P 500 had its worst January on record, down 8.6 per cent. Other developed indices did slightly worse, with the MSCI World index excluding the US down 9.3 per cent. There was little refuge in emerging markets, down 6.5 per cent, though big exporters China and Brazil saw bounces. |
Monday’s data showed Korean exports, a barometer of global trade, down a third from their level last January. If there is any hope, it is that the drop in global economic activity triggered by last autumn’s financial crisis may be stabilising at its new lower level. This month’s supply manager surveys showed an enduring recession, but slight improvements were registered from Australia and China through the eurozone to the US.
But markets seem to fear, with some reason, that many countries are trapped in a political and social logic that makes them race for the bottom.
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rffrydr
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| Posted: Wed Feb 11, 2009 9:19 am Post subject: |
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Protectionism, new and improved:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a_te14JLcYoc
This could definitely spin the wrong direction. EEM's are sufficient unto themselves for now but if every citizen owned a share of HSBC we'd be in a better place.
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Rubedo
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| Posted: Tue Feb 10, 2009 11:19 pm Post subject: |
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http://jsmineset.com/index.php/2009/02/10/market-commentary-from-monty-guild-18/
How Government Prolonged the Depression
Policies that decreased competition in product and labor markets were especially destructive.
By HAROLD L. COLE and LEE E. OHANIAN
The New Deal is widely perceived to have ended the Great Depression, and this has led many to support a "new" New Deal to address the current crisis. But the facts do not support the perception that FDR’s policies shortened the Depression, or that similar policies will pull our nation out of its current economic downturn.
The goal of the New Deal was to get Americans back to work. But the New Deal didn’t restore employment. In fact, there was even less work on average during the New Deal than before FDR took office. Total hours worked per adult, including government employees, were 18% below their 1929 level between 1930-32, but were 23% lower on average during the New Deal (1933-39). Private hours worked were even lower after FDR took office, averaging 27% below their 1929 level, compared to 18% lower between in 1930-32.
Even comparing hours worked at the end of 1930s to those at the beginning of FDR’s presidency doesn’t paint a picture of recovery. Total hours worked per adult in 1939 remained about 21% below their 1929 level, compared to a decline of 27% in 1933. And it wasn’t just work that remained scarce during the New Deal. Per capita consumption did not recover at all, remaining 25% below its trend level throughout the New Deal, and per-capita nonresidential investment averaged about 60% below trend. The Great Depression clearly continued long after FDR took office. |
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rffrydr
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Rubedo
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| Posted: Sat Feb 07, 2009 12:12 pm Post subject: |
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http://www.recordstar.com/articles/2009/02/05/editorial/editorial02.txt
History shows big spending can prolong recession
By Kay Bailey Hutchison
Thursday, February 5, 2009 3:02 PM CST
In one of history's more candid reflections, Henry Morgenthau, Jr., Treasury Secretary under President Franklin D. Roosevelt, confessed, "We have tried spending money. We are spending more than we have ever spent before and it does not work."
Just six years after crafting the New Deal, Morgenthau declared that their efforts to create jobs and restore America's depression-ravaged economy by expanding the federal government to unprecedented levels had been a failure. By Morgenthau's own assessment, the New Deal saddled our country with "as much unemployment as when we started...and an enormous debt."
More than 75 years have passed since FDR signed the New Deal into law, and many noted economists are studying the Great Depression and trying to learn from the experience. In 2004, a team of UCLA economists concluded that the policies of the New Deal, which suppressed competition and kept unemployment in the range of nine to 16 percent, actually prolonged the Great Depression by seven years. |
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rffrydr
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| Posted: Thu Feb 05, 2009 8:30 pm Post subject: |
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Denny's Grand Slam: Bread lines for a modern age?
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rffrydr
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rffrydr
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| Posted: Thu Jan 22, 2009 8:31 am Post subject: |
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Now that the FDR image is front and center it does well to remember (above all the other differences) that savings reduced haven't been wiped clean.
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