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  1. Putting "2031" in the headline demonstrates stupid illiteracy. Why should the new depression last exactly the same number of years as the previous one?

  2. How about starting the clock in 1971 or 1974? From my perspective of watching the news, we've been in economic crisis all my life, except the odd boom years here and there, with mass unemployment most of that period in a lot of countries.

  3. oddly enough, it's when you're near the bottom that things feel gloomiest and that, in fact, you're closest to moving our of it. Here's to an optimistic take...


Wind power
by Jerome a Paris (etg@eurotrib.com) on Mon Dec 19th, 2011 at 06:16:07 AM EST
[ Parent ]
Your think things are at their gloomiest now?
by Colman (colman at eurotrib.com) on Mon Dec 19th, 2011 at 06:40:57 AM EST
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Well, a lot of people feel that there cannot be improvement, so that's one definition of gloomiest - lack of hope, rather than "worst"

Not saying it's right, but it's one way to see things.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Mon Dec 19th, 2011 at 07:09:23 AM EST
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Veblen, writing in 1904 and motivated by the Long Depression that had recently ended, did argue that "depression" is in fact a psychological phenomenon of the business class.

Lots of people (myself included) feel that they could be improvement if only the people in positions of influence decided to do the right thing. The hopelessness comes from the political nature of the problem - we need to put on hold "what needs to be done" and concentrate first on winning power for who knows what on the vague hope that they will do what needs to be done, 10 years too late.

Just look at the Jürgen Stark interview elsewhere on this thread.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Mon Dec 19th, 2011 at 07:13:01 AM EST
[ Parent ]
power for who knows whatwhom

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Mon Dec 19th, 2011 at 07:18:03 AM EST
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If one of the 'scare' youtube videos currently circulating on FB about the proposed legal powers of the proposed ESM has any basis in fact then 'for whom' would clearly be those in and benefiting from the financial sector, as proposals include allowing the ESM to sue governments that do not comply with requirements while making the same ESM immune to suits by governments.

Fortunately EU institutions are no less likely to do this than are US institutions likely to seek powers to arrest and hold citizens without warrant.  OH --- wait.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Dec 19th, 2011 at 04:48:48 PM EST
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On 2, 2007/8 is a convenient starting point because of the banking panic. The 1970's crisis didn't have the characteristics of a panic.

On the other hand, David Graeber in Debt: the First 5000 years does set 1971 (Nixon abandons the gold standard) as the start of something new.

As for 3, there's this:

Four, good things are still happening. It isn't all doom and gloom. In the Long Depression, some countries were largely unscathed. New technologies and industries were being created. The telephone was invented, and the foundations of new industries based on the petrol engine and electricity were put into place. The people who got it right still made huge fortunes, and the workers in the right industries prospered. Overall, however, times were hard. And you had to position yourself carefully.
You have positioned yourself "correctly" in renewable energy finance, so...

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Mon Dec 19th, 2011 at 06:41:15 AM EST
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"I positioned myself correctly on the right side of the median - why can't everybody do the same?"

Wind power
by Jerome a Paris (etg@eurotrib.com) on Mon Dec 19th, 2011 at 07:11:42 AM EST
[ Parent ]
On the other hand, David Graeber in Debt: the First 5000 years does set 1971 (Nixon abandons the gold standard) as the start of something new.

The abandonment of the Bretton Woods system is a consequence as much as it is a cause of the changes: The combination of Lower 48 Peak Oil, the recovery of the German and Japanese industrial plants and unprofitable colonial engagements in Indochina conspired to turn the US from a structural CA surplus country into a structural CA deficit country. This in turn forced the US to abandon the Bretton Woods system, since the BW system requires the structural CA surplus country or countries to recycle their surpluses into capital investment in the deficit countries. And the new CA surplus countries lacked the institutional capabilities, geopolitical incentives and occasionally, as we have seen in the German case, sufficient grasp of the economics of international trade to take on that role.

The following forty years of European exchange rate policy can be seen without great loss of generality as an attempt to recreate the BW system without the realisation (let alone the political will) by the incumbent surplus countries to recycle their surpluses into productive investments.

That these attempts have collapsed three times in four decades should not, in retrospect, have been a major surprise.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Dec 19th, 2011 at 10:33:29 AM EST
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I am optimistic that the problem CAN be fixed. I am pessimistic that it WILL be fixed any time soon. A fix depends on the time it takes to change the popular perception about how our societies can and should be run, and that seems to be moving in the wrong direction just now.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Dec 19th, 2011 at 06:52:50 AM EST
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Putting "2031" in the headline demonstrates stupid illiteracy. Why should the new depression last exactly the same number of years as the previous one?

The point is that the public is not aware that a depression could last 23 years, because they don't know their economic history. They also don't know that the Long Depression used to be called the Great Depression until the 1930's rolled along with a deeper (but shorter) crisis. Just like the Great War, also known as The War to End All Wars was followed by WWII.

One of the biggest problems we face is that political leadership is in the hands of a generation born around 1950. All they know about hardship is from what their parents told them about WWII or their grandparents about the Depression, and their formative years were in the 1960s. The post-WWII system was set up by people who had lived the Great Depression as (young) adults and they were determined not to let a repeat happen.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Mon Dec 19th, 2011 at 09:08:37 AM EST
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