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Tuesday, October 02, 2007

The Worst Recession in 25 Years?

Maybe so. Incidentally, for those who wonder why I apparently changed my tune--I did a forecast for a bank client over the summer, and that's when I came across all this data that made me very pessimistic about the future. So I still disagree with people like Paul Craig Roberts who say that "Bush's free trade policies" are wrecking our economy, but I do agree that the economy is in trouble.

4 comments:

  1. I don't disagree with you about the nefarious effects of loose money, or the current state of affairs.

    I like to take a front row seat in life: In the 1990s I was a technology stock trader and during the latest bubble I was a southwest florida real estate appraiser. I'm still an appraiser, and thankfully I'm doing FHA work these days. The market is horrible.

    Here on the Gulf coast, I have observed that pawn shops are full-up on construction equipment. I note that car sales have crashed. About a year ago I wrote a very crappy review about a restaurant from which I never had a meal, because they were so busy they thought my business didn't matter. After promising me a table pronto, they thought my 5 year old son would like to spend an hour at the bar. It was packed. Just last week, I told the wife I'd like to try the place again, because I've heard so many good things about the food. Friday night, 8 pm, and 50% empty... Oh yeah, wealth effects... they can only be worse in California these days.

    I think the Fed can shred the dollar and get things moving, but I don't think they can avoid a recession this time. Even Easy Al thinks the odds are something like 50/50 (NB, A Zappa Song... though Easy all has publicly reduced the odds) that we're going into a recession.

    I'm not so upset about intervention. I agree with Keynes when he said "In the long run we're all dead." I'd like to see Florida real estate rip again, and I'm all for the Feds expanding FEMA to cover wind. When it comes to self-interest, it doesn't pay to get too intellectual.

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  2. Anonymous11:01 AM

    Well put. I also am not too upset about intervention and frankly the alternatives were none too rosy.

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  3. Woody9:37 PM

    Yes, anonymous, we should consider the alternatives.

    Creating or fomenting an economic depression is kind of like doing poorly on an intelligence test. It's easy to create an economic meltdown. It takes hard work to keep the system in motion.

    I know the intellectuals will come out in defense of adjustment periods, and necessary pain, and all that. The rest of us humans know we only have 75 year +/- life expectancies, and more than half of that is gone...

    If we're going to make normative arguments, it's hard to argue against the desire to live well.

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  4. Anonymous3:52 AM

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    ReplyDelete