For the first time in my life, I think a depression is conceivable
When I began writing about economics in the early 1970s, I made a private vow that I would never use the word depression in describing the state of the economy. The economists and politicians who occasionally did so were, I thought, engaged in partisan hyperbole. Their game was to scare people into thinking the end of the world was at hand or to pressure Congress to enact a favored piece of economic legislation.
Well, times change. I revoke my vow.
Its not that Ive concluded that were already in a depression. But we could be. For the first time in my life, I think its conceivable. This obviously would be a big deal. It implies permanently higher levels of unemployment (though joblessness would still fluctuate), greater economic instability and a collision between democracy and the economic system.
Since World War II, business cycles have been with a few notable exceptions mild and relatively brief. From 1945 to 1990, there were 10 recessions averaging about 10 months each, according to the National Bureau of Economic Research (NBER), an academic group that dates recessions and recoveries. Some slumps were severe. The monthly postwar unemployment rate peaked at 10.8 percent in late 1982; gluts of workers and products put an end to double-digit inflation.
But even the harshest postwar recessions were tame compared with the Great Depression of the 1930s. There are at least three characteristics that define the Depression and set it apart from postwar recessions.
https://www.washingtonpost.com/opinions/our-economy-may-be-sliding-toward-a-depression/2020/04/01/fba28736-7457-11ea-87da-77a8136c1a6d_story.html
Decades of Republican political and economic policies are now coming home to roost. They've been yearning for a return to the past, but it's the 1930s instead of the 1950s.
Ferrets are Cool
(21,101 posts)Or do you think that is possible?
Zorro
(15,716 posts)But I do think there's going to be a tremendous reset of our economic system and Republican policies of unfettered capitalism.
pazzyanne
(6,541 posts)I have never been a fan of American corporations being "persons". They need to go back to being companies, and all tax loopholes need to be closed so they pay their fair share of taxes. Give me time and I'll come up with more on this subject.
Moostache
(9,895 posts)3Hotdogs
(12,313 posts)Slave masters in the red states would have full support for the return of slaves that had the audacity to ghost.
And with the border wall, they couldn't escape to Mexico.
Bring on 1850.
CaptYossarian
(6,448 posts)If the South secedes this time, we leave them alone.
Those are evil electoral votes selecting evil persons.
still_one
(92,055 posts)the health crisis is resolved
unblock
(52,089 posts)and since "depression" doesn't have a precise economic definition (economists think in terms of "contraction" and "expansion" ), i suppose anyone's interpretation of a lengthy recovery could be deemed a "depression".
that said, there's every reason to think this could be one of the shortest contractions on record. the sharpest, no doubt, but also the shortest. so much has shut down so quickly, it's hard to imaging further contraction continuing for anything like the 4 solid years of contraction 1929-1933.
that's not to say unemployment returns to normal any time soon, just that the economy will likely start to expand (from its much lower level) as soon as there's any scope of break in the covid-19. this may be localized as some countries feel they have it under control and will allow limited parts of their economy to start to return to normal. well, that means more economic activity than the previous month, so that's expansion.
and obviously, any effective treatment or vaccine will speed things along.
don't get me wrong, the surreal conditions could continue for month and months; but on the other side, things should come back up to nearly normal fairly quickly, and that rapid uptick feeds on itself.
duforsure
(11,884 posts)To many huge mistakes from trump and Moscow Mitch and the GOP. People have zero confidence in either one of these two crooks. They will try to force people back to work before it's safe, you're health be dammed. They could care less about your health.
empedocles
(15,751 posts)republicon policies, economic and political cycles, will all contribute. This bear market may do really serious damage.
Response to Zorro (Original post)
elocs This message was self-deleted by its author.