Thank You Ed.It's Called The " Peace Dividend ".
I've never fully swallowed the notion that WAR can turn around an economy,without a quick and decisive absolute victory,and then some.
Only WWII has ever demonstrated this to be somewhat true.Since they were in a depression, it could only have gotten better anyway.IMO.Look at Israel these days.What a mess their economy is in,and they are looking for a massive loan guarantee this week I believe.
They are being pressured by The US ( Colin Powell - A Man I have deep respect for )to get their act togeather and seriously engage the engine to travel the road-map of peace.
The elections are over.Other excuses are wearing thin.No way they will get much sympathy without addressing and the peace process.
PEACE PAYS!!
The gods must be crazy
By Charles Stein, Globe Columnist, 1/28/2003
My son has been studying Greek mythology in school, and I've been reading a little over his shoulder. What impresses me most about the fables is the role of the gods. When they are in a good mood, they can make life wonderful for the mortals below. But when they get angry, they can make life miserable in a hurry.
There are days I think the United States must have done something to anger the gods, especially the gods who look out for the economy. How else can you explain the stunning reversal of fortune we have experienced in the space of just a few short years? Since the late 1990s, the following has happened:
The world political situation has gone from calm to menacing; the economy has gone from robust to sluggish; the stock market has gone from soaring to sinking; the dollar has gone from strong to weak; the federal budget has gone from surplus to deficit; energy prices have gone from low to high; and medical costs have gone from rising slowly to rising quickly. I could probably list a few more turnabouts, but I have limited space.
Assuming the gods aren't really to blame, one has to look elsewhere for answers. The simplest answer is probably the best one: An economic boom has given way to an economic bust. The boom of the late 1990s was a whopper by almost any measure, and it has resulted in a pretty powerful bust.
''A lot of the elements are self-reinforcing,'' said Mark Zandi, chief economist at the Pennsylvania forecasting firm Economy.com.
On the way up, the growing economy benefited the stock market, the dollar, and the budget situation, to name just a few. On the way down, everything is working in reverse. Confidence is part of the chain reaction. When things were going well, we had the feeling anything was possible. Now that so much has gone wrong it is hard to imagine that we will ever get back on track.
Not everything fits neatly into the boom-bust equation. Some of the pluses in the 1990s may have been nothing more than plain old good luck.
''We had a royal flush,'' said economist Nicholas Perna of Perna Associates in Connecticut. ''How often does that happen?''
The peaceful international situation in the 1990s may have been the result of the West's victory in the Cold War, or it may have been the equivalent of a string of sunny days: a pleasant but unsustainable interlude. The years of tranquility allowed the United States to cut its defense budget, a bona fide peace dividend. The defense budget is growing again in response to Sept. 11, Iraq, and North Korea. Uncertainty is also on the rise, a major drag on the economy.
The moderation of health care costs in the mid 1990s also may have created a false sense of security. Rising costs are once again pinching consumers, corporations, and state governments, much as they did in the bad old days. The recent surge in energy prices is another big negative. It is too soon to say whether expensive oil represents a temporary spike, or something more ominous.
The 1990s wasn't a period of perfection. On the economic side there were a string of international crises: Mexico in 1994, Asia in 1997, Russia in 1998.
''Nasty things happened during the boom, but growth was so strong that we were able to shrug them off,'' said Nariman Behravesh, chief economist for Global Insight, an economic consulting firm in Lexington. In today's slower-growing world, said Behravesh, the economy is like a sick man: more vulnerable to each new illness that comes along.
Booms don't last forever and, mercifully, neither do busts. Like all slowdowns, this one is laying the groundwork for the next upturn. Interest rates are low, office space is cheap, and government policy, the combination of tax cuts and spending increases, is providing much-needed stimulus. Eventually, all these forces should allow the economy to regain its strength andbegin another expansion.
In the meantime, I'm thinking of making some kind of sacrifice to the gods. In these uncertain times, we don't need any more enemies than we already have.
Charles Stein is a Globe columnist. He can be reached at stein@globe.com. |
