The former economist at Merrill Lynch, David Rosenberg, has joined the America Doomed crowd and declared that America is in a DEPRESSION. AD has predicted that eventually people would wake up to the fact that this is no ordinary recession, double dip, whatever — there is only one word for it — D E P R E S S I O N. Rosenberg points out that there were up blips in the 1930s Depression, just as there are now. He also notes that it is essential to accept the fact that this is a depression in order to address the problems.
Likewise, Derek Shearer, former US ambassador and Professor at Occidental College, seconds Rosenberg declaring that there are serious problems in the short term but the next two or three decades are not going to be happy times.
There are a couple of things that neither Shearer or Rosenberg note in their analysis — extremely important things. First, what will be the ending or solution to the depression look like. In the 1930s, it wasn’t until World War II that America went back to work in mass and the depression ended. Wars in the 1940s were largely man power intensive — millions lost their lives. However, that is not likely today. Technology will continue to displace workers and make the depression worse and last longer. When will people start realizing that there is no recovery in this depression — at least not in traditional terms — that is, jobs for people based working for for-profit companies. Meanwhile, technology and overseas outsourcing will continue to eliminate jobs at a dramatic rate.
The second item that Shearer and Rosenberg failed to note is that capitalism has failed — miserably failed. Any solution to the depression has to include fundamental changes in the economic system. This change in the economic system has to allow for people to do the work that is needed in America even though it is not profitable. The entire country needs to be viewed as a vast work force to work on critical problems for the benefit of everybody.
Much of this work is not profitable in the traditional sense and will never be interesting to capitalism. But, it has long been neglected and more and more critical to the survival of America. It is providing health care for the people who don’t have it — not profitable at all. It is providing child care so people can work or paying people to stay home and care for their own children. It is paying people for producing free software that benefits everybody. The problem in America is not that there is not enough work, the problem is that the work that needs to be done cannot be monetized — made profitable.
Until America recognizes these two critical elements, there is no way that the depression will end. In fact, it will just get worse. Also, people with jobs that are doing fine will reject the notion of a depression. Even in the 1930s nearly 2/3rds of the people had jobs. An uncle of mine told me stories about the depression and how he was one of the lucky ones with a job — to him, the depression was not a big deal. This is the case with many in America today and the reason that the depression will get much worse as more and more people loss the ability to support themselves, including many of recent college grads with excellent education who are unable to find work.
One public policy that should be immediately implemented is unlimited unemployment. Every person who is unable to find a suitable job, should receive unemployment compensation. The current system cuts people off resulting in abject poverty. All people need some income. As the government taxes those with money to pay for those unable to find jobs, they will recognize that the unemployed represent a valuable labor pool that can be deployed with jobs across America — jobs that do not have to be profitable.
There are alarms of epic portion to America sounding today but, sadly, the politicians are not paying attention — they will eventually.
America is Doomed.
[...] many of recent college grads with excellent education who are … See original here: David Rosenberg — Economist — Declares Depression Share and [...]
“Let them eat Lobster”!!! Michelle Antoinette
When I first read this entry, I was reminded of Jon Krakauer’s Into Thin Air. It is a marvelous case study of how selfish individual ambition can indirectly lead to a collective disaster for all unknowing participants. I find Krakauer’s book an excellent metaphor for our country’s mentality toward current economic conditions and how there is a blindness and a lack of respect exhibited to the face of extreme danger.
Here we are all striving to reach the summit of our goals. The oxygen of our economy is thinning as we march on. For the unemployed and underemployed, we are already suffering signs of hypoxia. The oxygen bottles we need for stimulus are all but empty. The safety nets of our climb have been carelessly neglected or dismantled. And off in the distance looms the darks clouds of a perfect storm whose ferocity is the stuff of nightmares.
In terms of how we can recover from the current DEPRESSION, the outlook is ominous. The economist, Joseph Schumpeter, implied the need for “creative destruction” in order to have a sustainable long-term economic recovery. As the admin has already alluded to, technology has already displaced, disrupted and destroyed much of the traditional means of recovery. The level of creative destruction that needs to take place will be unprecedented as weakened economies can no longer sustained out-dated business models with protectionistic policies in the face of global competition. To exacerbate the problem, there is no innovation taking place as Americans repackage old products and services in an never-ending downward spiral of deceit and designed obsolescence.
The bottom line is there will be NO recovery if we try to do it under current established models of capitalism. If we attempt a recovery under the traditional modes of capitalism, we will turn into a zombie nation (a mindless, slow decay) as we feed on the dead carcasses of old businesses until there is nothing left.