re: ECONOMY. One consolation is that all countries of the world are in it together

[Rosa Luxemburg]

at least we are not alone.

"Got to look on the bright side of life"

[Earth_First]

1. Problem is, we're one of the major contributing factors...

Once everything settles out and the dust clears, we very well may be on our own once the turnaround ocurrs.

[Hello_Kitty]

2. True, but other countries set themselves up to rely on the U.S. consumer

While at the same time clamoring for more and more outsourcing of jobs and industries from here. What did they think was going to happen once stagnant U.S. wages crashed into the wall of maxed-out credit? As recently as a year ago some countries were talking about "decoupling" from the U.S. Well, we see how well that worked out.

[Rosa Luxemburg]

3. an interesting point!

[Warren Stupidity]

4. India and China not so much.

Although we may yet drag them down with us.

[anigbrowl]

5. Quite the opposite

If we were in recession and other parts of the world were doing well, it would suck a bit for us but it would also mean that there were markets hungry for our exports (yes, we still make and export quite a lot of things) and also eager to invest some of their capital here to take advantage of lowered equity or property prices, much as Japan did in the early 80s. The fact that everyone is going down together is what makes this current economic situation so dangerous, because it limits the possibility of a rebound.



If you imagine a really simple analogy of a handcar, in normal times one side goes up as the other goes down, and as long as the weight isn't distributed too unevenly the car keeps moving along, just as individuals, regions or whole countries often experience mild recessions but their trading partners take up the slack. Normal economic activity is cyclical - although the back-and-forth pumping requires constant effort, it's pretty sustainable compared to propelling with a rocket or rolling down a steep grade. But if the handle breaks in the middle then the whole thing stops.

[Rosa Luxemburg]

6. if the handle breaks then what?

[anigbrowl]

7. As I said, the whole thing stops

Not to push the analogy too far, but that point you either try and repair the handle or get off and push, which is a much less efficient kind of propulsion.

The reason that it's poor consolation to see all economies having the same problem is that such an emotion is based on drawing comfort from seeing that others are suffering along with you. Instead of being sad that one's own economy is doing badly but feeling comforted that there are new opportunities to be found elsewhere (and that what goes around comes around), deriving some happiness from the fact that everyone is miserable leads to a 'beggar my neighbor' mentality in which mutual failure is preferred to any kind of disparity, even the cyclical kind. In short, such an attitude is suicidal and unhealthy.

Of course, there is a silver lining, which is that when everyone is having the same problem it's easier to make big structural changes, so we might get a more global approach to regulation and significantly improve our long-term stability (if we can get it past people yelping about one world government, new world order, and so on, and who think that anything too international is an evil plot).