Ed,
Nouriel Roubini is good at diagnostics. He goes on eloquently,
paragraph after paragraph, in describing what's wrong (pretty well
everything, one infers) but then ends up at the end of his article
with as lame a mixture of platitudes and remedies as any of the
current crop of economists and politicians.
In short, he has no idea of what is actually going on -- or he is in
complete denial about it. He doesn't realize that what we have today
is a mammoth version of one of the normal sorts of trade cycles that
always used to happen throughout history in this region or that
caused by over- or under-production, or surpluses or deficiencies of
resources. They all caused grief to this or that section of the
market place and, when foolishness was exposed and debts were purged,
their economies revived soon enough.
In our case we are not suffering from a shortage or over-production
of goods, nor from a shortage or over-production of resources (not
yet anyway) but from an over-production of credit. In the past,
credit has always acted like oil in a machine -- a necessary but
relatively minor part of the whole. Today, private, corporate and
public credit and its counterparts (private, corporate and public
debt), amounts to a very large part of the whole 'machinery' because
governments themselves have been credit providers increasingly all
through the past century (by printing money), particularly since
crucial decisions in currency foolishness were taken, such as Bretton
Woods (1944) and Nixon releasing the dollar from the discipline of
gold-backing (1971). To continue the analogy, the real 'mechanical'
parts of today's machine (money that is saved and then invested) can
hardly operate because there's too much oil (credit and debt) sloshing around.
But, essentially, today's impasse is no different from the past.
Governmental foolishness must be acknowledged and credit and debt
purged from the system. It was partly done in the 2008/9 crisis, but
evidently not sufficiently so. There's a lot more to go yet. How long
will the present Great Recession last? Even some politicians and
economists are talking in terms of ten years. Probably more like a
lifetime, unless America and the Eurozone agree to China's proposal
to establish a stable world trading currency that can serve as the
discipline to prevent more money-printing by governments.
Keith
At 21:57 17/08/2011, you wrote:
Thanks for posting, Sally. For another gloomy piece on the economy,
global this time, see what Roubini (Doctor Doom) has to say at:
<http://www.project-syndicate.org/commentary/roubini41/English>http://www.project-syndicate.org/commentary/roubini41/English
Ed
----- Original Message -----
From: <mailto:[email protected]>[email protected]
To: <mailto:[email protected]>[email protected]
Sent: Monday, July 11, 2011 4:25 AM
Subject: [Futurework] NYTimes.com: Economy Faces a Jolt as Benefit
ChecksRun Out
[]
<http://www.nytimes.com/>
The New York Times
E-mail This
<http://www.nytimes.com/adx/bin/adx_click.html?type=goto&opzn&page=www.nytimes.com/yr/mo/day/business/economy&pos=TopRight-EmailThis&sn2=92c9e17e/c394674&sn1=3c2ea8ec/5ea3ad3e&camp=foxsearch2011_emailtools_1629903b_nyt5&ad=tree_88x31_NP_may19&goto=http%3A%2F%2Fwww%2Efoxsearchlight%2Ecom%2Fthetreeoflife>
[]
This page was sent to you
by: <mailto:[email protected]>[email protected]
BUSINESS DAY | July 11, 2011
<http://www.nytimes.com/2011/07/11/business/economy/as-government-aid-fades-so-may-the-recovery.html?emc=eta1>Economy
Faces a Jolt as Benefit Checks Run Out
By MOTOKO RICH
About 20 percent of personal income comes from government payments,
and as programs are trimmed, reduced consumer spending could slow
the recovery.
[]
[]
<http://www.nytimes.com/ref/membercenter/help/copyright.html>Copyright
2011 <http://www.nytco.com/>The New York Times Company |
<http://www.nytimes.com/ref/membercenter/help/privacy.html>Privacy Policy
----------
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2011/08/
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
