Will there be a new great Depression?

Will there be a new Depression?

  • Yes

    Votes: 31 33.7%
  • No

    Votes: 46 50.0%
  • Unsure/other/2012 is the end anyway

    Votes: 15 16.3%

  • Total voters
    92
  • Poll closed .
Short of an asteroid strike, yes.

Bernanke has shown that there's a floor on inflation around 1%. If inflation dips below that level, he starts stimulating. That basically puts a floor on how bad things can get.

He shows no urgency in getting the economy back to its pre-recession growth path, and the fiscal side is pretty useless with a dysfunctional Congress.

So we muddle along on a growth path that's entirely consistent with 10% unemployment. :undecide:

We are all Japanese now.
 
Yes I would say the world has changed that much. Well not the world, but the US since that is what I'm referring too. Most of the people who lost their jobs were the unskilled laborers. We are talking the factory workers, tech support (the ones you talk to over the phones, not the ones who actually come to your house), and your run of the mill office worker. Those are all jobs that are now either done by machines or outsourced to foreign workers due to cost effectivness. Now the US is more about skilled labor, technical work, and services.

...

Don't have much time to respond, but in short: people have said exactly this in every recent recession, including the 2001 dot-com bubble popping, the early 90's before good Clinton years, and so on. And yet the economy always seems to find use for these people once it is growing again.

Your assertion as to where unemployment is worst, by the way, is also off. According to the BLS, it's construction. #2 is officially agriculture, but this chart is not seasonally adjusted (which has the largest effect on agricultural workers).

The blame-the-victim approach seems to be in the vogue, nowadays. So clearly the laid-off worker is responsible for the bad economy!
 
Don't have much time to respond, but in short: people have said exactly this in every recent recession, including the 2001 dot-com bubble popping, the early 90's before good Clinton years, and so on. And yet the economy always seems to find use for these people once it is growing again.

Your assertion as to where unemployment is worst, by the way, is also off. According to the BLS, it's construction. #2 is officially agriculture, but this chart is not seasonally adjusted (which has the largest effect on agricultural workers).

The blame-the-victim approach seems to be in the vogue, nowadays. So clearly the laid-off worker is responsible for the bad economy!

I don't think it's all the "victims'" fault. The reason I harp on the American worker though, is because they refuse to accept ANY blame for the current situation. One thing I think is certain about this recession is that everyone is to blame and everyone is sort of the victim too.

In my opinion, everyone has a lot of changes to make. This means the banks, the corporations, the small businesses, the government, and the people. The problem I see though, is that while the corporations resist a lot of change, it seems to me the general public absolutely refuses to change one little bit and want things to go back to how they used to be when that just simply won't happen.

To sum up my position in short: Everyone is to blame, everyone is the victim, and everyone needs to change.
 
Seems like everyday Americans have changed. They spend less money they don't have & are less likely to take risky loans.
 
I don't think it's all the "victims'" fault. The reason I harp on the American worker though, is because they refuse to accept ANY blame for the current situation. One thing I think is certain about this recession is that everyone is to blame and everyone is sort of the victim too.

In my opinion, everyone has a lot of changes to make. This means the banks, the corporations, the small businesses, the government, and the people. The problem I see though, is that while the corporations resist a lot of change, it seems to me the general public absolutely refuses to change one little bit and want things to go back to how they used to be when that just simply won't happen.

To sum up my position in short: Everyone is to blame, everyone is the victim, and everyone needs to change.

I fail to see how the current crisis, largely precipitated by hedge funds over-leveraging their bets into shaky, falsely-labeled assets, is the fault of the working man. The only economic "problem" caused by the working class is a low demand for consumer goods, but it is difficult to purchase many goods when you are laid off and don't have an income.

And I note once more: people pull the old "unemployment is going to be high because our workforce isn't trained right" argument out all the time, after every recent recession (that I have seen in the US, not sure about overseas). Or they argue that systemic unemployment will be higher than 4% in the brave new post-recession future. In every prior case, they were ultimately proven wrong.
 
There is a lack of hiring.

Business downsized 3 position to 2 positions. It worked in the short term because people were experienced an desperate to save their job. When one of those two burnout or got stolen by the competition they post a job that take 5 years experience to fill and only pays entry level wages.
 
I fail to see how the current crisis, largely precipitated by hedge funds over-leveraging their bets into shaky, falsely-labeled assets, is the fault of the working man. The only economic "problem" caused by the working class is a low demand for consumer goods, but it is difficult to purchase many goods when you are laid off and don't have an income.

And I note once more: people pull the old "unemployment is going to be high because our workforce isn't trained right" argument out all the time, after every recent recession (that I have seen in the US, not sure about overseas). Or they argue that systemic unemployment will be higher than 4% in the brave new post-recession future. In every prior case, they were ultimately proven wrong.

So the American workis not to blame for constantly asking for higher wages and more benefits for jobs that are classified as unskilled labor. I usually side with workers on a lot of issues, but when I see someone demanding $20/hour to work on an assembly line I find it absolutely rediculous. I also look at it from a businessman's perspective. If I owned a factory, why the hell would I keep my factory in America when foreign workers will do the same work for less pay and not even ask for any kind of benefits.

Now I'm not saying the American worker needs to accept slave wages, but they do need to realize the value of their job. If you work a job that just about anyone can do, then you shouldn't be paid as much as someone who works in a more skilled field.
 
exactly. the modernization of the american worker costs less because of global competition. or actually just competition in general.
 
So the American workis not to blame for constantly asking for higher wages and more benefits for jobs that are classified as unskilled labor. I usually side with workers on a lot of issues, but when I see someone demanding $20/hour to work on an assembly line I find it absolutely rediculous. I also look at it from a businessman's perspective. If I owned a factory, why the hell would I keep my factory in America when foreign workers will do the same work for less pay and not even ask for any kind of benefits.

Now I'm not saying the American worker needs to accept slave wages, but they do need to realize the value of their job. If you work a job that just about anyone can do, then you shouldn't be paid as much as someone who works in a more skilled field.

And yet we'd all be better off if they made twice that. In fact, the extremely low pay of American labor is one of the most critically important problems with the US economy. So you are criticizing labor for making half of what they should be making and claiming that they are greedy. :p
 
Now I'm not saying the American worker needs to accept slave wages, but they do need to realize the value of their job. If you work a job that just about anyone can do, then you shouldn't be paid as much as someone who works in a more skilled field.

The Problem is globalization. With the invention of the container ship, ships can be turned in as little as 24 hours. 1 team (5 or 6 truck driver and 1 crane operator) can move 30+ containers an hour. With this dramatic reduction in man power world trade of everyday stuff becomes a possibly. Our law evolved in isolation which no longer exist. As a society we need to decided what we value. Fair labor laws and environment or cheap as crap goods (which often times are crap). IF we value fair labor laws and the environment we NEED trade barriers even though it WILL increase the cost of EVERYTHING.
 
The Problem is globalization. With the invention of the container ship, ships can be turned in as little as 24 hours. 1 team (5 or 6 truck driver and 1 crane operator) can move 30+ containers an hour. With this dramatic reduction in man power world trade of everyday stuff becomes a possibly. Our law evolved in isolation which no longer exist. As a society we need to decided what we value. Fair labor laws and environment or cheap as crap goods (which often times are crap). IF we value fair labor laws and the environment we NEED trade barriers even though it WILL increase the cost of EVERYTHING.

I fully agree with you, but try selling that to the American public. If you tell the American people that they can have their jobs back, but the price of everything will increase (in some cases, quite dramatically) I guarentee you will be shouted out of the room.

That's why the American worker needs to accept the fact that the US just isn't in the unskilled labor business anymore. People need to either get a USEFUL degree, learn a trade, or start their own business if they want to succeed in this economy.
 
So the American workis not to blame for constantly asking for higher wages and more benefits for jobs that are classified as unskilled labor. I usually side with workers on a lot of issues, but when I see someone demanding $20/hour to work on an assembly line I find it absolutely rediculous. I also look at it from a businessman's perspective. If I owned a factory, why the hell would I keep my factory in America when foreign workers will do the same work for less pay and not even ask for any kind of benefits.

Now I'm not saying the American worker needs to accept slave wages, but they do need to realize the value of their job. If you work a job that just about anyone can do, then you shouldn't be paid as much as someone who works in a more skilled field.

The argument that employees are receiving more benefits than is necessary for the company to function and prosper is a shaky one at best. Funny story: the real average growth rate in family incomes (taking into account all people, but largely the poor, working, and middle classes since it's population-weighted) since the 1980 has been stuck around 1%. The same figure for your hedge-fund managers, CxOs, directors, etc. has been enormously higher, roughly quadruple that. CEOs used to make about 40x the average worker back in the good ol' Truman and Eisenhower days, but now that figure is more like 200x.

So if your argument is that "people are demanding too much money for the job they are doing", isn't your focus misplaced?

I fully agree with you, but try selling that to the American public. If you tell the American people that they can have their jobs back, but the price of everything will increase (in some cases, quite dramatically) I guarentee you will be shouted out of the room.

That's why the American worker needs to accept the fact that the US just isn't in the unskilled labor business anymore. People need to either get a USEFUL degree, learn a trade, or start their own business if they want to succeed in this economy.

So many things wrong with this:
  1. Only if you assume profits will remain constant--workers are not demanding a shift of both wages and profit margins upwards, they are demanding a greater share of the profits.
  2. Some unskilled labor, like stocking shelves at stores or construction, are not outsourced and that is not likely to change in the immediate future. Furthermore, even if production is outsourced, American workers are still required at docks, in trucks and trains, etc. to move the products to the markets.
  3. Productivity per worker, or efficiency or whatever you call it, is not equal in all countries. Focusing on exclusively worker pay without taking into account greater productivity per worker is a false comparison, and one that doesn't favor labor in advanced countries.
  4. Look at Germany--they are a modernized, first-world country with a thriving manufacturing sector. It can be done.
 
The argument that employees are receiving more benefits than is necessary for the company to function and prosper is a shaky one at best. Funny story: the real average growth rate in family incomes (taking into account all people, but largely the poor, working, and middle classes since it's population-weighted) since the 1980 has been stuck around 1%. The same figure for your hedge-fund managers, CxOs, directors, etc. has been enormously higher, roughly quadruple that. CEOs used to make about 40x the average worker back in the good ol' Truman and Eisenhower days, but now that figure is more like 200x.

So if your argument is that "people are demanding too much money for the job they are doing", isn't your focus misplaced?



So many things wrong with this:
  1. Only if you assume profits will remain constant--workers are not demanding a shift of both wages and profit margins upwards, they are demanding a greater share of the profits.
  2. Some unskilled labor, like stocking shelves at stores or construction, are not outsourced and that is not likely to change in the immediate future. Furthermore, even if production is outsourced, American workers are still required at docks, in trucks and trains, etc. to move the products to the markets.
  3. Productivity per worker, or efficiency or whatever you call it, is not equal in all countries. Focusing on exclusively worker pay without taking into account greater productivity per worker is a false comparison, and one that doesn't favor labor in advanced countries.
  4. Look at Germany--they are a modernized, first-world country with a thriving manufacturing sector. It can be done.

I didn't say the workers were demanding to much for the company to prosper, I said they are demanding more than their job is worth. Unskilled labor is just that, unskilled. This means that any Tom, Dick, or Harry can come in off the street and do the job. If it is a job that anyone can do then in my opinon the job is worth maybe a little over minimum wage.

I also never said that all unskilled jobs were being outsourced, I said they are either being outsourced or automated. Your example of the shelf stocker is a clear example of this. A few months ago on the radio, it was discussed that retail chains are starting to seriously research the viability of automated shelf stockers and cashiers. So if that pans out that will become yet more unskilled jobs that will be unavailable to people.

Face it, as technology advances all unskilled labor will either be done by workers in poor countries or will be automated. So the people who live in the nations that can afford automation will have to find something else to do; something that can't be outsourced or automated.
 
Given the escalation of Eurozone problems and the impending housing bust in China, I'm updating my probability of a major US recession in the next 18 months from p=.1 to p=.25.

Thanks, Italy.
 
I didn't say the workers were demanding to much for the company to prosper, I said they are demanding more than their job is worth. Unskilled labor is just that, unskilled. This means that any Tom, Dick, or Harry can come in off the street and do the job. If it is a job that anyone can do then in my opinon the job is worth maybe a little over minimum wage.

First, that's just semantics. Then I'll rephrase my last question so hopefully you will respond to it: are CxOs, directors, and hedge fund managers demanding more then their jobs are worth? Suggesting there is any sort of absolute dollar value on labor when the dollar itself is just an arbitrary construct for exchange is something I find utterly ridiculous.

I don't know what you think modern American manufacturing plants look like, but any Tom, Dick, or Harry can't come in off the street and be able to do the job. Jobs that you seem to think are unskilled in modern manufacturing simply aren't. The unskilled positions that I have been focusing on (construction, agriculture, even stocking) are fields where automation has reduced the need for labor, but in no field has that demand been eliminated, nor is it likely to happen in decades.

I also never said that all unskilled jobs were being outsourced, I said they are either being outsourced or automated. Your example of the shelf stocker is a clear example of this. A few months ago on the radio, it was discussed that retail chains are starting to seriously research the viability of automated shelf stockers and cashiers. So if that pans out that will become yet more unskilled jobs that will be unavailable to people.

They are starting to seriously research it? So when will this be implemented? Oh wait, we don't even know if it will pan out yet? Note my prior use of the phrase 'in the immediate future'. Right now, we still have a use for the people who lost their jobs to the recession. Recession != Rip Van Winkle.

Face it, as technology advances all unskilled labor will either be done by workers in poor countries or will be automated. So the people who live in the nations that can afford automation will have to find something else to do; something that can't be outsourced or automated.

Believe it or not, physical proximity is still a factor. Is there any equivalent to what you mentioned above in construction or agriculture? A completely automated farm, requiring zero human input besides one guy tapping away at a computer? Completely self-assembled buildings? How can you completely outsource the construction of a skyscraper to China? Do they make the skyscraper, lean it over on a barge and float it across the Pacific, and then you erect it in the US?

Given the escalation of Eurozone problems and the impending housing bust in China, I'm updating my probability of a major US recession in the next 18 months from p=.1 to p=.25.

Thanks, Italy.

:vomit:
 
Of course it will be worse, and 2012 could very well be connected.
The main cause are indoctrinated matematicians-economists who are 100% sure of their wrong predictions, example below.

What I mean is that it could be avoided, but it will not be because we're 100% sure that it won't happen.


No.

Defining a "Depression" as a drop in demand (PQ) by one-third or U3 unemployment rising beyond 15%...the Fed simply wouldn't let that happen. We'd be on QE20.

And I do claim to be 100% sure.


(EDIT: more conventionally, "Depression" is a drop in output of 10%, though there's no hard definition. I use one-third because that's how large the drop was in the 1930s.)
 
Of course it will be worse, and 2012 could very well be connected.
The main cause are indoctrinated matematicians-economists who are 100% sure of their wrong predictions, example below.

While recession may happen, Depression is unlikely.

I will make a bet with you.

U3 unemployment will be at or below 15% for all months between now and June 2013.
 
I'm not inclined to bet on my own ruin and sit and let it happen, if you are, go ahead.
 
Seems like everyday Americans have changed. They spend less money they don't have & are less likely to take risky loans.

I think the spending and borrowing habits of Americans tend to be generational. My parents lived through the Great Depression, and they were thrifty almost to a fault. After what they experienced, they realized how fragile prosperity can be. It wouldn't surprise me if people who are children and young adults today will be much more conservative with their finances than their parents.
 
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