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Building an Open Future [This Network is not currently active and cannot accept new posts] | | Topics
Economic Depression 2009?Views: 167
Feb 18, 2009 1:12 pm Economic Depression 2009?

John Stephen Veitch

Here is a small part:

"Depression 2009
It's now very clear that we are in a depression. This is the worst recession since the 1930's. Economist know well how governments responded in the 1930's and that policy response was wrong. Around the world governments are trying to re-inflate the economy by pumping money into the system. So far with very little success.

Jared Diamond has written a book called "Collapse: How Societies Choose to Fail or to Succeed". The key point Diamond makes is that time after time societies collapsed from a period of high success. Moreover, they commit suicide by group choice rather than being adaptable in order to survive. Each society has it's cultural rules, and insists on being "true to our own vision", even if it means death. Human societies adopt cultural beliefs, strategies and rituals that become "the reason for our existance". My allegiance to "(Put what you like in here. - 'God' might do.)" is more important than my life. Many human groups have decided that Cultural survival is more important than physical survival.

James K. Gailbraith in his classic book "The Great Crash of 1929" writes that "the bad distribution of income" where the top 5% of the population got 33% of all the income was at the top of a list of causes of the depression. In the last 30 years we've recreated that situation.

Economist Nouriel Roubini was one of the few economists with a high profile who correctly predicted the present depression. Roubini recommends that the government of the USA should nationalize all those US Banks that have balance sheets weakened by toxic assets. The directors and managers of those banks should be dismissed, and a form of bankruptcy should be pursued, which protects jobs and depositors funds. The bad debt should be isolated and the bank recapitalized. Over time the banks should be sold back into private hands. The problem with this idea is that in the USA, the concept of nationalization of the banks is unlikely to get political support. If this proves to be the obstacle I anticipate, it will be impossible to give the banks a clean bill of health and to restore confidence in the system. That will cause the depression to last much longer than it otherwise might.

GDP is not a satisfactory way to measure the progress of a society. An increase in economic activity does not spread to lift all boats."

(To print from the original use the printable pages.)

John Stephen Veitch
Open Future Limited - http://www.openfuture.biz/
Innovation Network - http://veech-network.ryze.com/
Building an Open Future - http://openfuture-network.ryze.com/

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