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Thu Apr 2, 2020, 09:31 AM

For the first time in my life, I think a depression is conceivable

When I began writing about economics in the early 1970s, I made a private vow that I would never use the word “depression” in describing the state of the economy. The economists and politicians who occasionally did so were, I thought, engaged in partisan hyperbole. Their game was to scare people into thinking the end of the world was at hand or to pressure Congress to enact a favored piece of economic legislation.

Well, times change. I revoke my vow.

It’s not that I’ve concluded that we’re already in a depression. But we could be. For the first time in my life, I think it’s conceivable. This obviously would be a big deal. It implies permanently higher levels of unemployment (though joblessness would still fluctuate), greater economic instability and a collision between democracy and the economic system.

Since World War II, business cycles have been — with a few notable exceptions — mild and relatively brief. From 1945 to 1990, there were 10 recessions averaging about 10 months each, according to the National Bureau of Economic Research (NBER), an academic group that dates recessions and recoveries. Some slumps were severe. The monthly postwar unemployment rate peaked at 10.8 percent in late 1982; gluts of workers and products put an end to double-digit inflation.

But even the harshest postwar recessions were tame compared with the Great Depression of the 1930s. There are at least three characteristics that define the Depression and set it apart from postwar recessions.

https://www.washingtonpost.com/opinions/our-economy-may-be-sliding-toward-a-depression/2020/04/01/fba28736-7457-11ea-87da-77a8136c1a6d_story.html

Decades of Republican political and economic policies are now coming home to roost. They've been yearning for a return to the past, but it's the 1930s instead of the 1950s.

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Response to Zorro (Original post)

Thu Apr 2, 2020, 09:38 AM

1. How long before America collapses from the debt the repugs have accumulated?

Or do you think that is possible?

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Response to Ferrets are Cool (Reply #1)

Thu Apr 2, 2020, 09:44 AM

3. I don't think America "collapses"

But I do think there's going to be a tremendous reset of our economic system and Republican policies of unfettered capitalism.

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Response to Zorro (Reply #3)

Thu Apr 2, 2020, 09:56 AM

5. I sure hope so!

I have never been a fan of American corporations being "persons". They need to go back to being companies, and all tax loopholes need to be closed so they pay their fair share of taxes. Give me time and I'll come up with more on this subject.

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Response to Zorro (Original post)

Thu Apr 2, 2020, 09:43 AM

2. they want to go back alright...not the 1950's...the 1850's (n/t)

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Response to Moostache (Reply #2)

Thu Apr 2, 2020, 02:18 PM

9. Yeah. 1850. The richest of them can afford slaves. The Fugitive Slave Law could be resurected.

Slave masters in the red states would have full support for the return of slaves that had the audacity to ghost.

And with the border wall, they couldn't escape to Mexico.


Bring on 1850.

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Response to 3Hotdogs (Reply #9)

Thu Apr 2, 2020, 06:51 PM

10. Let's make a deal.

If the South secedes this time, we leave them alone.

Those are evil electoral votes selecting evil persons.

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Response to Zorro (Original post)

Thu Apr 2, 2020, 09:45 AM

4. It is more than possible, and it depends what Washington does to provide relief to the public until

the health crisis is resolved



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Response to Zorro (Original post)

Thu Apr 2, 2020, 09:59 AM

6. i suppose anything's "conceivable", but it's highly unlikely.

and since "depression" doesn't have a precise economic definition (economists think in terms of "contraction" and "expansion" ), i suppose anyone's interpretation of a lengthy recovery could be deemed a "depression".

that said, there's every reason to think this could be one of the shortest contractions on record. the sharpest, no doubt, but also the shortest. so much has shut down so quickly, it's hard to imaging further contraction continuing for anything like the 4 solid years of contraction 1929-1933.

that's not to say unemployment returns to normal any time soon, just that the economy will likely start to expand (from its much lower level) as soon as there's any scope of break in the covid-19. this may be localized as some countries feel they have it under control and will allow limited parts of their economy to start to return to normal. well, that means more economic activity than the previous month, so that's expansion.

and obviously, any effective treatment or vaccine will speed things along.

don't get me wrong, the surreal conditions could continue for month and months; but on the other side, things should come back up to nearly normal fairly quickly, and that rapid uptick feeds on itself.

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Response to Zorro (Original post)

Thu Apr 2, 2020, 10:07 AM

7. I think a depression is very near

To many huge mistakes from trump and Moscow Mitch and the GOP. People have zero confidence in either one of these two crooks. They will try to force people back to work before it's safe, you're health be dammed. They could care less about your health.

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Response to duforsure (Reply #7)

Thu Apr 2, 2020, 10:31 AM

8. Long-standing structural problems; debt, inequality, infrastructure,

republicon policies, economic and political cycles, will all contribute. This bear market may do really serious damage.

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Response to Zorro (Original post)

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