carey_jim

Wrong Great Depression Lessons Will Haunt Equities in 2009

I'm still in the middle of my personal own analysis of our current economic problems but my first conclusions are more optimistic than yours.

We are now facing similar dislocations that were faced during the 1930s because of technological advances, and not only because of inevitable human folly and mismanagement.

In the thirties, such technological innovations as mass electrification of factories, refrigeration, the use of trucks for distribution of goods, telephone service for the entire country, radios for the entire population, the electrification and mechanization of farms (electric milking machines) and many other revolutionary technological devices made work much more efficient, depressing prices, and made large numbers of unskilled workers unnecessary.

People think that the 40 hour work week was a great social advance when it was established in the United States by the Roosevelt administration in 1938, but it was really a social and economic necessity because there was not enough work during the Great Depression and work had become much more efficient.

The 40 hour week was a way of allowing workers to continue working, 'part-time' without thinking of themselves as part-time workers.

When we remember that there were basically no fringe benefits (pensions, health care, vacations, etc.) attached to jobs in the 1930s, we can understand that there was no downside to reducing the work week from 60 hours (typically workers worked 10 hours a day six days a week) to 40. In fact, businesses welcomed the 40 hour work week because they could hire more people and have a happier work force.

It is interesting in this regard to remember that Roosevelt said that one of his great regrets was that he was unable to reduce the work week to four days instead of five.

I think we are facing the same kind of problems with our modern technological innovations which center around communications and the ending of the brick and mortar stage of doing business.

There will be dislocations but I don't think we need to be as pessimistic as you seem to be about solutions. I don't have time to explore some interesting solutions now but I'll do so in the future.

The bottom line for Seeking Alpha is that new investment opportunities (and vehicles) might arise in surprising places and some older ones might either die out completely or become highly unprofitable.

2009 Economic Forecasts Ignore Demographic Shift

I have always been an agnostic with regard to the deflation/inflation argument and I only play the devil's advocate for the deflation argument because I think long experience with inflation has blinded us to the possibility of deflation.

One more cause of future deflation would be a change in consumption habits which you hint at with the title of your article. Advertisers have prodded Americans to 'shop till you drop' by an avalanche of advertising that seems normal to most Americans, but might appear absurdly excessive to future generations. The 'Shop till you drop' mentality might come to an end when the baby boomer generation has finally retired.

Economic Efficiency Cannot Be Calculated

Economic theories and ideologies are, in part, advertisements, propaganda and cheer leading for the powerful. Whatever you say about them, they are only models for the very complicated place we call the world.

I find it bracing to recall that George Washington, Thomas Jefferson, Benjamin Franklin, and other prominent Founding Fathers, all had prices on their heads and were condemned by the British Crown to death by hanging for the high crime of treason.

If Britain had won the first American Civil War (which the American Revolution is often still called in Britain) our illustrious Founding Fathers certainly would have been hanged (along with their theories of government.)

The Antidote to Economic Malaise: A Culture of Collective Mindfulness

I don't think it's a coincidence that Muhammed Yunus is a Muslim.

His approach is, basically religious, whatever name you give it.

Communism was a religion too, even though it was atheistic. It was a scientific religion, if you will, complete with hagiography, theology and devils and the French Revolution was its progenitor.

Islam, Hinduism, Judaism and Catholicism have all aspired to to control every aspect of life, including economic and political activity.

Social progress should move away from these failed ideolgies not back to them.

We should take the lessons of history. After all, we are only a few generations from the horrors of Stalin and Hitler who were both idealists.

What Happened to Demand?

As the Buddha taught 2500 years ago, almost all demand (desire) is delusional.

If the Buddha could see (and hear) the relentless exhortation to buy just about anything and everything on the planet and the attendant greed, envy and unhappiness .... he would probably feel vindicated in his philosophy.

Where has all the demand gone? Where have all the flowers gone? All a long time passing ..... gone along with the rest of the environment. A long time passing.

Speaking of passing, I'll pass on the junk food, the vacation to Las Vegas and the new Hummer and settle for a cold beer in front of a warm fireplace instead.

It's cheaper and warms the spirit. All I demand is to be listened to occasionally but that's probably too much to demand already.