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Politics : View from the Center and Left

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To: Mary Cluney who wrote (129242)	1/26/2010 11:23:27 AM
From: Katelew	Read Replies (1) of 541835

My opinion is based simply on having observed the financial markets and the business cycles for the last 40 years. And not as an academic but as a investor participant which gives one a very different perspective. And I could, of course, be wrong. The recession hasn't fully played out and going forward the demographics of the USA are extremely problemmatic. Overall spending is destined to decline simply because of the aging population and pending boomer retirements. But right now, today, what I see is a typical recession unfolding. If I had to come up with one reason why I always thought this recession would not become another Great Depression it would be this. In the Great Depression, scores and scores of banks failed, closing their doors and wiping out depositors completely. There was no FDIC insurance. Not only did people experience declining real estate values and stock prices, many of them completely lost their money in the bank. Small businesses in many towns literally couldn't make payroll and order inventory. The money was gone. The cascading effect of this across the country was devastating. In fact, some academics describe the period of the Great Depression as actually a series of rolling recessions. No part of the country was left untouched before it was over ten years later. I'm not even sure that this recession we're in is second to the Great Depression. There was a devastating series of recessions in the late 70s and early 80s throughout the manufacturing sector of the country with enormous loss of jobs and shrinking of wages. Some manufacturers went under completely while others relocated to the South where wages were lower. This multi-year event spawned the phrase the "Rust Bowl" (instead of the Dust Bowl of the 1930s). The phrase referred to the economic damage done to the manufacturing sector in the North and Northeast, where unemployment in some areas reached the 25% mark of the Great Depression

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