The New Republic

I am not sure I buy this pessimistic vision for a few reasons; one Asian increasing prosperity will open up new markets for goods and services, the people who say America doesn't make anything have never walked into a Chinese supermarket with a lot of produce coming from America, and if not coming from American the produce is made by American owned companies in Asia with a segment of the profits returning home. For a long time the US was the engine that drove the world economy, but now there are a few engines, Asia (including India), the US, Europe, and to some degree South America. Two; Demographics in the states. The baby boomers are going to start retiring in large numbers soon (the leading edge turns 65 next year) and this process will continue for the next 21 years (the 18 years of the baby boom and the 3 for increased retirement age) As they die off there will also be a tremendous amount of asset transfer as baby boomers had far fewer children than their own parents did. While we are living longer and healthier, we haven't extended ultimate lifespans much (the oldest people who have ever lived are still about the same as the oldest people who ever lived before) three; we are only increasing in mankinds productivity, making more with less this leaves the overall society wealthier, and with fair and progressive taxation (ie wealth transfer) we can have a stable and prosperous future.

- blackton

July 2, 2010 at 10:56am

Blackton -- Back in the early 90s, as a marketing professional, I was reading internal financial services industry reports predicting the Baby Boomers would retire with half the financial assets of the WWII generation. (Hence the industry's increasing desire to privatize social security -- the post war reality of decades of steadily increasing middle class investment in the market made possible by the WWII generation's steadily rising incomes, the proliferation of secure pensions, etc., etc., was coming to an end.) And those projections didn't take into account the kind of housing price collapse and stock market declines we've experienced recently. The truth is, the asset wealth of the baby boomers is unlikely to adquately cover the cost of the care and social services this huge cohort will require as it ages and declines. Plus, they, in concert with their even more conservative Silent Generation elder siblings, have for the last 30 years been doing everything in their power -- and their numbers makes for a lot of political power (that will likely persist for another 20-30 years) -- to ensure that "fair and progressive taxation" has not and will not apply to their earnings during their peak earning/high disposable income years. Unless we radically change direction -- and there is no indication that we can or will -- the baby boomer's children will most likely inherit the worst of all worlds (a world they are just beginning to experience) -- declining economic opportunities for themselves, ever more expensive and more privatized costs for things like education, security, energy, economic, cultural and social infrastructure for themselves and their children, AND an elder generation with both more need to financially depend on their children and less wealth to bestow on them than the WWII and Silent generations that came before them.

- esmense

July 2, 2010 at 7:44pm

I agree that the economic and psychological impact of the Great Recession is deeper than most employed opinion-leaders are willing to admit. Too many people have been kicked down the economic/social ladder through no moral failure of their own. Already, the American workplace has become more harsh and authoritarian. We're becoming a more stratified and poorer society comparable to Latin America. It will take a long time, maybe a decade, before we see significant recovery due to technological advancement (ex. cheaper solar energy) and structural adjustments (ex. a reallocation of resources away from suburban tract housing to hopefully more productive purposes, from highways to mass transit, etc.). Richard Florida explores this idea, in a more optimistic vein, in his new book "The Great Reset".

- amidut

July 2, 2010 at 8:39pm

How long are we going to read comments such as "Greatest since the Depression," and now, "The Great Recession," until we finally come out and admit that we are in the second "Great Depression?"

- skahn

July 3, 2010 at 9:29am

This article has described a good shorthand way for describing a depression vs. a recession; the article states: “…Most of the jobs lost during the current recession aren’t coming back. Fifty-two percent of currently unemployed workers lost their jobs for reasons other than temporary layoffs—a far higher share than in any other postwar downturn. This is not a cyclical downturn in the labor market. Returning to full unemployment will require many millions of new jobs in companies and even sectors that do not yet exist…” So we finally have convenient shorthand to describe the current situation. In a cyclical downturn jobs are lost by workers temporarily. But their positions and their industries remain. In a depression jobs, the industries, and the economic sectors in which they reside are destroyed, never to return. Future mass employment is dependent upon new demand created in new enterprises meeting new needs in new economic sectors that as yet, do not exist. Thinking of the great depression of the 1930s and WWII and its aftermath in light of the above proposition is instructive. WWII ended the depression by doing just that. It created millions of new jobs both directly by the technological revolutions that it spun off into new industries (think of consumer electronics and synthetic materials for just two); and by the physical destruction and war caused wearing-out of the industrial plants of all of western Europe & Japan; thus creating a generations worth of structural aggregate demand in output (for re-building) for the only relatively undamaged industrial physical plant then existing anywhere on earth, ours. The political upheavals of the war liberated a quarter of the world’s population that had been economically and politically enslaved in colonialism, and thereby further increased the structural aggregate demand for American industrial output. Its last technical/political economic blessing was the gift of atomic energy/weapons which spawned an arms race and further economic expansion to meeting the demands of global armament, plus the global climate of fear it induced created the political climate for political/economic reorganization in Europe that resulted in the creation of new structures which would be able to more efficiently expand and optimize this growth. Since this present economic collapse has as yet had no similar righting impulse of catastrophic war and subsequent economic reorganization we may have to come to the conclusion that only such a further catastrophe can bring about the depth and breath of change that our current economic collapse requires. And as for the Keynesian’s stimulus solutions, it is made clear in the above description that Keynesian stimulus is appropriate for cyclic downturns, for recessions, not economic collapses. Keynesian stimuli will not destroy economic sectors which need to be destroyed. It will not spawn the birth and growth of new sectors and enterprises within those sectors that need to be created. It will not force the removal and realignment of workers into new economic sectors, geographic locations and into jobs at higher or lower wage levels and into changed living/working conditions. Keynesianism will not destroy General Motors, scatter its employees to the winds, and return Indiana and Michigan to empty forest and pasturelands. It will not starve the former GM workforce into submission unto the new economic realities of future employment in the global economic order, where their wages are on average lower than Mexico, Honduras, Chad, or Sri Lanka.

- 12alainu

July 6, 2010 at 8:26am