>Doug Henwood declares:" Yeah, but people have been saying things
>like this for 30 years. Know the enemy, man."
>^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>Saying things like what? 30 years ago the US wasn't facing twin
>deficits approaching one trillion dollars. The financial sector was
>at the service of a powerful industrial one instead of being the
>leader of the economy as it is now..The economy was generating solid
>high wage jobs instead of low wage retail/service ones. Dollar
>hegemony was just beginning and the US currency reigned supreme
>.There was not serious competition from China and SEA for global
>resources, especially oil. This is a different kind of oil shock
>with farther reaching consequences. There were not asset bubbles
>whose deflation create serious disadjustments in the economy,
>etc,etc. So, honestly I don't know what do you mean by this
>statement. Also, do you subscribe to the type of logical reasoning
>such that because it rained yesterday it follows it'll rain tomorrow?
I feel like I've typed these words so many times over the last 10-12 years that I should make a macro. But here goes again.
People have been forecasting some sort of bone-crunching crisis for the U.S. economy, and the broader world economy, for several decades. They point to rising debt, financial market instability, or whatever the problem of the moment is. And that crisis has failed to materialize. It could yet someday, I'm not denying that. But its repeated failure to materialize should prompt some reflection on why it hasn't, and why the propensity to predict it persists. On the first, I think the prophets of doom underestimate the skill and power of state bailout managers (and also fall for the temptation to see every problem as a crisis). On the second, it's wishful thinking: on the left, anti-capitalists hope for a crisis so that the masses will turn to them for rescue; on the right, Austrian anti-statists hope it'll mean the end of deficit spending and activist central banks.
Since whenever I say that, several objections immediately arise, let me address them pre-emptively: yes, I know that lots of people live in insecurity and misery - that's standard operating procedure for capitalism. And yes I know that the run of good luck might not go on forever. But look at Japan's "crisis" of the 1990s - it wasn't much fun, but it wasn't the 1930s either.
Doug