You hear a lot of debate about whether or not it's possible for this economic downturn to be as deep as the Great Depression.
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54 comments:
it's called progress, steve.....
the great leader FDR made sure through his progessive stewardship of gov't that things will never ever be worse than the Great D.
We are headed for bad times, very bad times.
Look for an increasingly chaotic resource distribution system in America, a tripling of unemployment, heightened ethnic/racial relations, a mass plummeting of consumerism (which means even more unemployment), and the eventual balkanization and disintegration of the USA as we know it.
More than a 'financial crisis' this is a massive 'crisis of confidence' which will shake the USA to its very core, even more than the War Between The States or the Great Depression.
I wouldn't call what is happening the '2nd Great Depression' or the 'Greater Depression,' more like the 'Great Disintegration.'
This could potentially be MUCH worse than the Great Depression because the stakes are much higher.
The population of America is at least double what it was in the 1930s, and thus the potential for chaos and breakdown is MUCH higher.
Similarly, the world population was only around 2 billion back in the 20s-1930s, but has since exploded to near 7 billion in our time, meaning the strain on resources is much greater.
Starry-eyed optimists.
Humans have not had a world-wide economic system for very long. Only from the time of Afonso de Albuquerque, the Portuguese Mars, has it even been theoritically possible to have a world-wide dark age.
Sustained bad government can lead to worse than the Great Depression. Leon Blum, Stanley Baldwin, FDR, Herbert Hoover -- all clueless as to what to do about the Great Depression. So, a barbarian arose to solve the problem. If the barbarian had WON, then the whole world, including the United States, including all we hold dear, would have descended into a new Dark Age, made more sinister and more protracted by the lights of perverted science.
Um, I'm expecting it to be bad and quite possibly worse than the Great Depression. Not only worse economically, but politically as well.
I moved all my money out of US dollars and am glad that I'm not currently living in the US - don't really want to be around when the shit hits the fan.
On another site there was a link to the _real_ great depression in 1873, next to which 1929 was an inconvenience.
According to the author, the current situation is much more like 1873 than 1929.
http://chronicle.com/temp/reprint.php?id=477k3d8mh2wmtpc4b6h07p4hy9z83x18
People lack imagination and things that happened in another time and place don't seem possible in America. But they are possible.
Howsabout about "We're heading for an economic Black Death!!!111!!!"?
Why does everybody assume that the Great Depression marks the all-time rock-bottom worst that human economic history will ever witness?
Because they weren't around to see how quickly the civilized world vanished after the murder of Aëtius, and how it took a millenium to put the thing back together again.
List of countries and territories by fertility rate
en.wikipedia.org
IQ and the Wealth of Nations
en.wikipedia.org
The GD was the first of its kind - an economic downturn brought on by a surplus of production. Never before in human history had it been an option to produce too much. There was always a shortage of something - clothing, food, shelter. So the GD was something entirely new. Farmers paid to leave fields fallow and dump milk down sewers. Workers paid to build stone walls by hand in the middle of nowhere. So the assumption is that as long the productive capacity still exists in our society, the GD is as bad as it can get.
Of course if the productive capacity itself was in jeopardy, because of war, or peak oil, or lower average IQ, or some other disaster, then the GD might look awfully humane by comparison.
Well said
It is always a bit odd for me to read words like "systemic risk" in mainstream media articles and then realize the articles' authors keep missing the point complexity scientists have been saying for years when they came up with the term- that the conservation of risk is as fundamental to our world as the conservation of energy (that they are in fact really one and the same thing).
Risk can never be eliminate within the system and centralizing things only shifts it from lot of small events to a few larger ones or a single big one.
Very good question, Steve. There are some so-called mainstream economic thinkers who believe we're headed toward a "Greater Depression." One such thinker is John C. Whitehead, former Chairman of Goldman Sachs and Rockefeller family confidante.
Of course the US is also (obviously) much richer than it was in the 30-ies.
I am Lugash.
This Great Depression could be far worse than the last Great Depression. In the 1930s there were millions of small farms where you could exchange a day's labor for room and board. Now that doesn't exist. We'd better hope that the powers that be know to get the soup kitchens going early, or there will be blood.
I am Lugash
"You hear a lot of debate about whether or not it's possible for this economic downturn to be as deep as the Great Depression."
Up here in Canada unemployment is at a 30 year low, interest rates are low, the banks are solid as a rock, the government is in surplus, and demand for our vast resources will continue. It is exceedingly difficult for me to buy the hype.
Even considering USA's different circumstances, does it not strike you as odd that interest rates are so low? When supply of a good decreases, the price tends to increase. If interest rates are market determined then interest rates would rise and credit would still be available to those who are willing to pay a bit more for it. What is this soft headed Canuck missing in his analysis?
I hope there is a recession. Lower prices, better drivers (accidents seem positively correlated with GDP growth), friendlier merchants who want your business...I see little downside here.
There's a very good chance that the depresssion we are now entering will be worse than that of the thirties.
Remember this fact. One of the iconic economic catastophies of the Great Depression was the bank failure. In the thirties hundreds of banks failed and destroyed the prospertity of Americans. Yet at the same time just across the border in Canada no banks failed.
The reason was just a set of somewhat different banking regulations. The point is not that Canadians were so much wiser. The point is that in very similar cultures small economic policy differences can make a huge social differences. Another lesson from this example is the realization that American "experts" can be very wrong.
The Obama administration seems intent on administering a set of very questionable policies. At least in the thirties there was a more or less united front against poverty. Today many of the most "progressive" elements in the left want America to be poor. Kerry and Gore for example want to raise gas prices so as to encourage
fewer cars on the road which means fewer jobs, less commerce, etc.
A party and an administration that wants to shut down the coal industry is a very scary steward of the economy at this time. A lot of the left believe that American prosperity is unclean and unfair. They dream of a bucolic pastoral America where all citizens are pure and poor.
So yes, with ideas like these on the ascendancy, it is very possible for this depression to be much worse than the Great Depression.
The Russian economic collapse in the 1990s must be the most dramatic post-war deflation in a developed economy.
The Great Depression is the worst event in American economic history that anyone remembers, partly because the government actively intervened to make it worse, and there were natural conditions which made it worse for farmers at the time, too.
Germans still look at the hyperinflation of the 20s and its aftermath as their benchmark for bad economic times. I'm sure that in some distant future, North Koreans will look back at the early 2000s as their benchmark, while Cubans will probably look at the early 90s (when the subsidies from Mother Russia dried up) as their worst time to compare to.
True, the Donner Party and the Siege of Leningrad are grimmer "worst case scenarios".
http://en.wikipedia.org/wiki/Cannibalism
What's beyond the Great Depression? Mad Max?
Because nobody has come up with the terms The Greater Depression and The Greatest Depression to describe other economic disasters.
Semantics.
Civil Rights, anti-Semitism, homophobia, inclusion, diversity, racism, integration, vibrant, multicultural, freedom, justice, equality, Democracy, terrorism.
When you have the right word it makes life so much easier to understand.
Nobody's left from the Panic of 1873, which may have been worse.
Well, it was pretty bad, Steve. I don't know if the Great Depression was the worst in US history because I don't know how it compares to severe 19th-century depressions, like the one in the 1890s.
Perhaps comparisons to pre-1900 depressions are not particularly relevant because:
1. The economy and society of the industrial world is so different from the agrarian societies that preceded it that there's little to compare.
2. We measure things much better now and lack the numbers to make direct comparisons.
Presumably, the worst depressions in history resulted in widespread starvation, near-total social dislocation, and the collapse of civilizations. Americans are not going to starve in large numbers (although 1930s-style hunger and malnutrition are possible), we possess the means to hold our society together by force if necessary, and western civilization probably has another century or so of life left in it.
That's my guess, anyway ...
-Money is a good.
-The supply of said good (credit) is said to have declined
-When supply of a good declines, price tends to increase
-And yet the price of money - interest rates - has....fallen? This makes zero sense. Is there some law restricting loans to financial institutions that I'm not aware of? Can't the Gates Foundation\Warren Buffet\China\The Sheiks lend out some of their $25 billion at a rate people are willing to pay?
I'd be willing to pay good money to see a high quality answer to the above questions.
The recession Warren Harding inherited was even more severe than the Great Depression. Nobody remembers it because it was licked within a year. The Great Depression, on the other hand, lasted over a decade.
Great observation, Steve. In the 1930's America had an overwhelmingly white population, and the blacks and low-IQ whites were resigned to living simple lives, not fooled into thinking they had all kinds of economic "rights" at odds with their ability to contribute value to the nation's capital ... in the 1930's a dumbass coalition of blacks & single women wasn't deciding elections and calling all the shots ... in the 1930's the American government wasn't bigger than the manufacturing sector ... etc.
The game is up. At least we have a thriving porn industry here. I have a large penis, so there will always be work for me.
Before the "Great Depression" periods of economic adjustment were called "panics". As with non-economic panics, they didn't last and sanity returned in short order.
Hoover's three-year panic was itself quite an innovation, but it took the genius of FDR to stretch it to twelve and to sell it as success as well. Really, we have Tōjō to thank for ending it.
FDR's coalition, which was basically everyone with a grudge against Yankees, was fundamentally incoherent and crumbled after his death. Obama's coalition-- anti-something, for sure-- is not that strong to begin with. It takes hard work and perseverence to stretch economic failure that long, and this country will not give BHO the chance.
Oddly, this post has devolved in an End of Days hysteria.
Why do people get so much pleasure from imagining that Apocalypse?
It appears that the posters are hoping that the sinners are adequately punished for their sins.
Lugash's comments on the availability and ubiquitousness of the small family farm allayed some of the poverty.
There are none today except for the Amish. The Amish will do swimingly well--of course they may need defense forces to protect themselves. They are going to be cleaned out if not.
The biggest difference Steve, is Culture. Back then, most men, and they were mostly European, were trained in uprightness.
NOT today.
Imagine Katrina.
Now figure in collapse of the American Econonmy---It is going to be 100x Katrina repeated all over America.
America has become a nation of barbarians. There is no civilization going on in America. The Young Generation are a bunch of whiggers, dumbed down and idiots. It is going to be Mad Max with crossdressers and goths going around killing. It is going to be open season on whites. All hell will break loose.
"What is this soft headed Canuck missing in his analysis?"
The risk of invasion from the south.
"List of countries and territories by fertility rate
en.wikipedia.org
IQ and the Wealth of Nations
en.wikipedia.org"
It all seems pointless compared to that, doesn't it?
I used to think it was hopeless, then I read this book
The price is absurd, but I got it from my university library. There will be soon be forms of geneitc engineering that could raise a population's IQ by 15 points a generation. And if the West won't do it, China will.
"in the 1930's a dumbass coalition of blacks & single women wasn't deciding elections and calling all the shots ..."
Blacks, Hispanics, Asians, single women, married women, whites in urban areas, white under 30 46% of white males..."
This Depression is going to be worse, much worse:
1) high beginning debt level
2) lack of wealth creating jobs
3) demographic collapse of retiring/dying Boomers
4) overbearing government regulation
5) low social capital
We can only avert a total social meltdown by canceling all debt. All American debt, across the board. Cancel it all now, before the whole economy goes down with it.
Yes, it will wipe out most of the banks, but that is exactly what we need.
CancelOurDebt.blogspot.com
Up here in Canada unemployment is at a 30 year low, interest rates are low, the banks are solid as a rock, the government is in surplus, and demand for our vast resources will continue. It is exceedingly difficult for me to buy the hype.
Considering the vast importance of the US to the Canadian economy, you better hope it is all hype. There is no way a deep recession here can fail to have profound effects up there.
"What is this soft headed Canuck missing in his analysis?"
"And yet the price of money - interest rates - has....fallen? This makes zero sense."
What you both are missing is that interest rates are NOT determined
by market forces. Governments actively intervene to set interest rates.
"Look for an increasingly chaotic resource distribution system in America, a tripling of unemployment, heightened ethnic/racial relations, a mass plummeting of consumerism (which means even more unemployment), and the eventual balkanization and disintegration of the USA as we know it."
In the long term, unfortunately, yes. The demographic trends are awful and demography is destiny. But in the short term - in the next year, decade, 20 years - not necessarily. The current decline of Western Civ. is not unlike the decline of the ancient Greco-Roman world. That was also caused by demographic change and it was very gradual. It literally took centuries. In 50 years or so the US may look the way Brazil does now, but modern Brazil is still a somewhat functioning country.
Lucius Vorenus mentioned Aetius here. Well, Aetius lived in the 5th century AD, but the ancient world's scientific and cultural peak occurred in the 4th century BC. From then until the absolute Dark Age trough before Charlemagne (8th century AD) there was more than a millenium of gradual decline. Nothing especially important happened in Aetius's time. There is no single event, person or even century on which you can pin the Greco-Roman civilization's death.
After Alexander's conquest half of Greece's population moved east and an untold number of Middle Eastern slaves moved into Greece. In the subsequent mixing of cultures and genes the things that made Greeks and their culture so special were gradually lost. Then Romans picked up Greek knowledge for a while, without contributing much to it. Their conquests allowed them to import millions of slaves into Italy to do manual labor. The cycle of decline that Greece went through after Alexander was repeated with the Romans several centuries later. By the way, immigration restrictionists like Steve have a pretty famous intellectual pedigree here. The dying Roman republic's most vocal opponent of extending citizenship to foreigners was none other than Cicero. Unfortunately he and those like him lost that political battle.
Back to my point: these sorts of declines are gradual and the current sharp financial downturn may turn out to be an atypical temporary swerve. We'll probably get out of it in a few years and then resume our slow societal decline.
Or I could be wrong.
Shouting Thomas says:
"Why do people get so much pleasure from imagining that Apocalypse?
"It appears that the posters are hoping that the sinners are adequately punished for their sins."
It's fun, isn't it? There is a whole sub-genre of "LA Apocalypse" where the destruction of Los Angeles is gleefully imagined in great detail.
"I'm just wondering: Why does everybody assume that the Great Depression marks the all-time rock-bottom worst that human economic history will ever witness?"
I've always thought of the collapse of the Roman Empire as the gold standard for economic calamity. Of course, there's no one date for it, but if you need to choose one: 410 A.D., the sack of Rome by the Vandals. Things were already going to hell by then (and had been for over 200 years), but after that things clearly were not going to get better.
We could do a lot worse than the gread depression, and I suspect that we will.
Econ Scrub,
It's called "Central Banking."
I'm just wondering: Why does everybody assume that the Great Depression marks the all-time rock-bottom worst that human economic history will ever witness?
I would assume because it was the most long-running, severe global downturn we have witnessed in modern times.
People also believe that our politicians are economists have enacted enough safeguards to prevent the "Even Greater Depression." Until this economic crisis hit, many thought a repeat of the Great Depression was impossible.
Of course, unless the miracles of technology can save us, the unspoken degradation of intellectual capital throughout the First World will probably lead to very protracted problems in the decades to come.
"After Alexander's conquest half of Greece's population moved east and an untold number of Middle Eastern slaves moved into Greece. In the subsequent mixing of cultures and genes the things that made Greeks and their culture so special were gradually lost. Then Romans picked up Greek knowledge for a while, without contributing much to it. Their conquests allowed them to import millions of slaves into Italy to do manual labor. The cycle of decline that Greece went through after Alexander was repeated with the Romans several centuries later. By the way, immigration restrictionists like Steve have a pretty famous intellectual pedigree here. The dying Roman republic's most vocal opponent of extending citizenship to foreigners was none other than Cicero. Unfortunately he and those like him lost that political battle."
A question.
Are the men at the top of our society importing, per capita, more foreigners and at a faster rate than the ancient exploiters did? Given how much has changed since just 1965, I would intuit yes and thus we will be destroyed much more quickly.
Or perhaps it is as Charles Murray said in Human Accomplishment: We began declining after the Renaissance. He even said the decline was very slow and hardly noticeable. By the 20th century, the West was declining faster, but still productive and with new ages entered: the computer and space age. His quantitative analysis ended at 1950, but he intuited that the decline continued and at an even faster rate.
Murray further wondered aloud whether the Protestant Reformation was a classic case of good intentions leading to bad results. When you put this together with Auster's belief that classical liberalism ultimately leads to radical liberalism, it does seem plausible that the reformation ended the Renaissance and started our decline. Or you could say the Lutherans were forced to rebel because the Church had gotten too rich and worldly and thus corrupt and therefore that marks the decline. Anyways, one could go on and on...
Perhaps societies, like objects, accelerate when they are in free-fall.
Murray's quote was, "A classic case of unintended consequences."
People had better prepare for what is coming. I want to be wrong, but my gut feeling is that we are headed for some very unpleasant times. In case nobody has noticed, the sale of guns has gone sky high. Better act now and avoid the rush.
It's fun, isn't it? There is a whole sub-genre of "LA Apocalypse" where the destruction of Los Angeles is gleefully imagined in great detail.
The final 10 minutes of The Day of the Locusts is a personal favorite.
I noticed the Weinstein Company has delayed the release of The Road. If we're lucky, it might get a DVD release. One wonders how a movie about white survival got made in the first place.
By the 20th century, the West was declining faster, but still productive and with new ages entered: the computer and space age.
I agree. I think a lot of people are misled by the continuing progress in science and technology into thinking that our society is not declining. It is.
As Newton famously said, scientists have the advantage of standing on the shoulders of their predecessors. Science is incremental. Artists, on the other hand, are under pressure to be completely original, to periodically reinvent things from scratch. Art is less incremental.
One didn't have to be MORE talented than Newton in order to build on Newton's work. One only needed to have been reasonably talented and born after Newton.
However, if you were a musician born after Mozart, you would have had difficulty building on Mozart's accomplishments. If one of your melodies resembled one of his, you were liable to be called a plagiarist. And the musical style in which Mozart worked was declared old-fashioned by the public soon after his death. It was popular for too long. Boredom is a factor in art, but not in science. A completely new style (Romanticism) had to be invented in response to that boredom, adding another reason why an up-and-coming composer born after Mozart couldn't build on Mozart's work too much.
All of this is to say that if a cultural decline were to start, it would affect art before it would affect science and technology. Which is exactly what happened in the 20th century.
Romanticism, which followed Classicism around 1800 was still pretty cool, but after about 1900 all the new reinventions of art have been crap. There's nothing wrong with change per se. The main question is always "change to what?"
Of course, art tends to have more political potential than (hard) science, so it's more liable to be hijacked by um... evil-doers for political purposes. To what extent is modern art crap because of politics and to what extent is it crap because of an actual decrease in talent? Hard to say. Someone may mention the Flynn effect here as proof that talent hasn't been going down, but the Flynn effect mostly affects the lower orders of society. For whatever reason (better nutrition, heterosis, breeding with the formerly-upper classes?) the lower end of the IQ distribution benefits from the Flynn effect, but the top doesn't. If anything, the elite's IQ should have suffered over the last century. Outside of India with its caste system the elites no longer form endogamous groups. Unfortunately, the phrase "marrying down" sounds anachronistic nowadays.
Well, and the Idiocracy effect of varying birthrates must have been a huge factor. So yeah, continuing technological progress notwithstanding, the amount of talent at the top has got to be decreasing.
"Murray further wondered aloud whether the Protestant Reformation was a classic case of good intentions leading to bad results."
Come now. Don't you mean the invention of the printing press to mass produce Bibles, thereby reducing the role of an elite priest class to interpret it, was the beginning of the end?
Hey Michael Farris,
The author of the piece you mentioned is a typical PC college professor who (sobs) warns of rising protectionism and immigrant "scapegoating" in the coming depression. He ruins his article with that tired leftist pabulum.
" TGGP said...
The recession Warren Harding inherited was even more severe than the Great Depression. Nobody remembers it because it was licked within a year. The Great Depression, on the other hand, lasted over a decade."
Good point. Maybe FDR purposely prolonged it in order to max. governmental control over the population. Nothing like having serfs to rule over. I bet Obama can better handle fear-stricken ex-SUV drivers than prosperous raucous Republicans.
I agree that on our present course recognisable Western Civilisation is likely to last another 80-100 years, with likely a transitional period of 100 or so years after that before the world is clearly in a new paradigm, likely a full dark age. The closest analogy to to today is Rome in the early 3rd century AD, not 410 AD - systems are ossifying, the culture is hollowing out, demographic decline is accelerating. OTOH there are worrying signs that we are declining much faster than Rome.
An important metric is the (in)ability of civilised armies to defeat smallish tribal groups, of the kind that destroyed Rome. Modern equivalents include gangs and militias as well as actual tribes.
For instance, the US Navy clearly has the theoretical military capability to eliminate Somali piracy, yet is in fact unable to do so. The world's sea lanes are no longer safe for civilisation. As with Vietnam, the 'political' reasons why are less important than this brute fact. For the first time in over 200 years the West is unable to guarantee the safety of the seas.
Travis said:
"I noticed the Weinstein Company has delayed the release of The Road. If we're lucky, it might get a DVD release. One wonders how a movie about white survival got made in the first place."
Because it's by Cormac Mccarthy. And I hear the music is by Nick Cave. Couldn't be a better combination. I look forward to that!
An important metric is the (in)ability of civilised armies to defeat smallish tribal groups, of the kind that destroyed Rome. Modern equivalents include gangs and militias as well as actual tribes.
For instance, the US Navy clearly has the theoretical military capability to eliminate Somali piracy, yet is in fact unable to do so.
We're not talking about lack of "ability" here. The Navy and the Army absolutely have the ability to destroy, utterly, land- and sea-going barbarians. What is lacking is the will to do so. Give the Navy the order, and in less than a month there will be no more pirates in the Indian Ocean.
Naturally, I do not expect The One to issue such an order...
anon:
"We're not talking about lack of "ability" here. The Navy and the Army absolutely have the ability to destroy, utterly, land- and sea-going barbarians. What is lacking is the will to do so"
Without the necessary will, there is no ability. In this case I expect the US Navy and Marines are in fact perfectly able and willing to eliminate piracy. It's the legal framework that makes it impossible, just as the Aztec's religious framework left them unable to defeat Cortez.
The religio-moral-legal-political framework of any society is at least as important as its physical resources. The Western religio-moral-legal-political framework has now ossified to such an extent that it is consistently unable to deal with a wide variety of emergent threats. And this seems to be getting worse.
Of course the world's largest private security firm, Bush-Cheney Inc. (otherwise known as Halliburton) Is now offering private security on tanker ships.
Kindly read up on your Hagel gentlemen;
thesis-antithesis-synthesis.
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