Friday, June 5, 2009

Not out of the woods...

Lately, if I happen to be in a room where a news program is blaring from a nearby television, I hear all sorts of happy chatter about the economy - both in the US and globally. However, as I've gone to making sites like Calculated Risk and Naked Capitalism regular reads, I've learned to trust my gut a bit more regarding such happy chatter: namely, the economy sucks and it is really not going to get better any time too soon.

Most recently, via Naked Capitalism, I ran into an article entitled A Tale of Two Depressions. The basic upshot of the article is that the current global economic downturn is not only comparable to that of the 1930s, but can be considered arguably worse. I'd also note that whatever indicators exist to suggest that things have stabilized a bit, take those indicators with a few grains of salt. Although history does not repeat verbatim, it's instructive to remember that 1) signs of stabilization early on in the Great Depression of the 1930s were followed by further deterioration, and 2) too many policy makers seem hooked on this generation's version of Social Darwinism (known today as neoliberalism) to offer effective measures to counter the effects of the depression is having on those most vulnerable. Instead, we see massive bailouts for the very institutions that caused the current mess in the first place, while more people find themselves out of work, displaced, and/or at risk for starvation as whatever safety nets that had been put in place in the US and a few other portions of the planet that were set up following the previous depression have been dismantled or are in the process of being dismantled.

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