Sunday, July 11, 2010

Will "The Third Depression" be a second "Long Depression"?

On June 27, 2010 New York Times columnist Paul Krugman created some controversy with his short essay, “The Long Depression” – oops, that’s “The Third Depression”, link here

Kurgman argues that we are entering a period like the prolonged “depression” that followed the Panic of 1873, and even the Great Depression gave us short-lived but unsustainable upturns. His lays the blame on “policy”. Too much emphasis on controlling deficit and debt, not enough on making sure people get back to work.

True, the backs of this situation seem to be on the ordinary worker, with official 9.7% unemployment and a Congress snubbing resuming extended unemployment benefits.

What’s worse for much of the workforce is that automation has gutted some steady jobs like in manufacturing, financial services and even information technology, whereas jobs paying less and previously offering less benefits, as in personal care, increase. That’s because of demographics. In general, people may not be able to sustain the “independence” of the last three decades or so.

Salon (in a “How the World Works” piece by Andrew Leonard) is referring us to “Big Picture” for an image of a New York Times 1911 article on “The Recovery from the Great Panic of 1873”, here. “The Long Depression is hot!” Loenard warns, link here.

What then follows is social instability, an outgrowth of what I have called “quantum ethics” (my BillBoushka blog yesterday).

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