As you point out, it has in the past, required a crash to reset the social landscape. But my question is why haven't we evolved past this? We almost started on the right path after the Great Depression, but greed does seem to win out. If you believe the Fourth Turning scenario, it will come again and worse than this last one.
This cycle of destruction has been lead by Milton Friedman types on the Republican side and to a lesser extent Hayek types on the Libertarian side. I do have my plan B in the event Republicans win out, but with all the information available now, I don't understand why we are allowing this to happen. When will we evolve past this?
Dragi is the hope for overcoming Germany, Austria, et al., but will it be in time? Roubini has been predicting China's blowup for a while now and where it was ignored before now the only debate is whether it is a hard or soft landing. But then what do you expect out of a country that suppresses it's people to the extent that China does? Contagion encompasses many by stander nations. We almost proved that Keynes was right as the rest of world is hanging on our success due to the steps taken. But as usual, the incredulous right is willing to do anything to stop the truth from emerging. Some South American countries (having been destroyed by the Chicago Boys ideology) are turning to themselves for sustainability. I keep hoping that we will learn before it is too late again.
As a side note for weathering these cycles... learn from Minsky's observations... when available credit starts to exit production and instead goes toward feeding speculation (it comes in different forms at different times, e.g. stocks, housing, banks, etc.), pull back on your investments. If it is a housing bubble, sell your house buy another when it crashes (that happens only when it is a bad one). During manias gold gets cheap, buy some and sell it during the panic. If it is a minor recession, buy good stocks right after the big sell off. My personal preference is not to buy everyday things unless you can pay for it outright.
These are things I know, however, I would be a much happier person if I never had to be that cynical or defensive. Getting money and religion out of politics, educating the populace well and free would be a good start. These are the things I am for. I do the other for survival when others don't seem to care enough to put a stop to the madness.
= new reply since forum marked as read