7 Reasons Why we need a "Good Depression" Now...Or Face A Great Depression Later

Discussion in 'Economy' started by Trajan, Jul 5, 2011.

  1. Trajan
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    Trajan conscientia mille testes

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    some hyperbole? certainly, his theme is harsh but wearily realistic.


    I have made the point before and will make it again, a seminal work on 'great powers' by paul kennedy-
    The Rise and Fall of the Great Powers - Wikipedia, the free encyclopedia

    a 'great nation's' success/survival does not entirely rest on its victories or lack of success of its military power, it rests on its ability to muster via the power of finance the ability to create and maintain its power.

    Ex; Japan didn't 'lose' ww2 after the A bombs dropped, its lost after the first 6 months of the war when Togo and its military junta would not pursue peace. It never had the money and resources to fight us long term even with the greater Asian 'co-prosperity sphere' at its back and Yamamoto knew it......



    Paul Farrell's 7 Reasons Why we need a "Good Depression" Now...Or Face A Great Depression Later

    1: Capitalism’s now a lethal soul sickness, needs a reawakening

    What’s the real problem? Not the economy, not markets, nor even politics. Yes, our economic pains are real. But they’re just symptoms. Something’s structural wrong. Since 2000 endless bad news: Greed, deceit, stupidity, corruption, unethical behavior, lack of moral conscience.

    The real problem’s deep in our character, the “mutant capitalism” Jack Bogle warned of in “The Battle for the Soul of Capitalism.” Sadly, that battle was lost. With it we lost our soul, our moral compass. America’s character is measured by our net worth.

    2. We’re already in the early stages of a Great Depression

    Comparing today with the Great Depression is common sport. In a Newsweek special “Seeing Shades of the 1930s,” Dan Gross wrote: “Wall Street, after two terms of a business-friendly Republican president, self-immolated on a pyre of greed, incompetence and excessive optimism.” Today’s “new normal” economy means high unemployment for years, inflation driving prices, rising interest rates, more debt, chaos.

    We are destroying ourselves from within. Former U.S. Comptroller General David Walker warns that “there are striking similarities between America’s current situation and that of another great power from the past: Rome.” Three reasons “worth remembering: declining moral values and political civility at home, an overconfident and overextended military in foreign lands, and fiscal irresponsibility by the central government.” We are becoming more vulnerable to external enemies.

    3. Good Depression exposes our self-destruct bubble-thinking

    Before the 2008 crash, “Irrational Exuberance” author Robert Shiller warned in the Atlantic magazine that “bubbles are primarily social phenomena. Until we understand and address the psychology that fuels them, they’re going to keep forming.” Housing inflated 85% in the decade: “Historically unprecedented … no rational basis for it.”

    Bubble thinking is an toxic virus that infected everyone. Shiller warns of another coming: “We recently lived through two epidemics of excessive financial optimism … we are close to a third episode.”

    4. Good Depression will stir outrage, force real reforms

    Writing in the Wall Street Journal, Jim Grant, editor of the Interest Rate Observer, wrote: “Why No Outrage? Through history, outrageous financial behavior has been met with outrage. But today Wall Street’s damaging recklessness has been met with near-silence, from a too tolerant populace.” Grant worries that Wall Street will run “itself and the rest of the American financial system right over a cliff.”

    But we only went to the edge in 2008. Today, a rebellious “throw the bums out” hostility is blowing a new kind of bubble: Three years ago we did not have Tea Party, union fights, the Arab Spring and Greek austerity riots, all signs of an dark angry future sweeping across America.

    5. Good Depression forces Wall Street to think outside the box

    In a powerful Bloomberg Markets feature, “No Easy Fix,” we’re told Wall Street’s “profit formula has hit a wall.” Their “money-making machine is broken and efforts to repair it after the biggest losses in history are likely to undermine profits.”

    Even Mad Money’s Jim Cramer openly admits hedge fund managers are pocketing megaprofits at capital gains rates while laughing at the stupidity of a broken political system that gives hundreds of billions in tax breaks to the richest, then takes taxes off the table as our middle class is dying under massive unsustainable deficits. Soon angry mobs will “fix” Wall Street.

    6. Good Depression will deflate America’s warring soul

    The American economy is a “war economy” driven by a egomaniac. I saw it firsthand as a U.S. Marine. Americans love being king of the hill, world’s cop, the global superpower. Why else spend 54% of our tax dollars on a war machine, 47% of the world’s total military budgets.

    Why? Our war machine generates such “spectacular profits that many people around the world” are convinced America’s “rich and powerful must be deliberately causing catastrophes so that they can exploit them,” warns Klein in “Shock Doctrine.” No wonder the GOP takes military spending, like tax cuts for the rich, off-the-table: The war industry is a major political donor.

    7. Good Depression now … avoids a far bigger depression later

    In “The Price of Liberty: Paying for America’s Wars,” Robert Hormats, undersecretary of state and a former Goldman Sachs vice chairman, traces America’s wartime financing from the Revolutionary War to present wars. He warns that today we’re “relying on faith over experience, hoping that sustained growth will erase deficits and that the ballooning costs of Social Security, Medicare and Medicaid will be manageable in the coming decades without difficult reforms.”

    Absent a brutal reset, we are on a historically predictable course says Kevin Phillips, Nixon strategist and author of “Wealth & Democracy:” “Most great nations, at the peak of their economic power, become arrogant and wage great world wars at great cost, wasting vast resources, taking on huge debt, and ultimately burning themselves out.” Yes, burned out, unprepared.

    So pray for a Good Depression earlier rather than later. Choose now and we can be prepared for whatever comes. Or a Great Depression will hit later, when we’re least prepared, the problems bigger, our faith weaker … don’t raise the debt ceiling.


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    Paul Farrell's 7 Reasons Why America Needs A "Good Depression" Now...Or Face A Great Depression Later | zero hedge
     
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    Last edited: Jul 5, 2011
  2. william the wie
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    william the wie Gold Member

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    Just catching up on the board as I take a break from writing this thread deserves a bump if for no other reason than to end the empire a little sooner.
     
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  3. Trajan
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    Trajan conscientia mille testes

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    thx WW.
     
  4. uscitizen
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    uscitizen Senior Member

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    I am not sure that we have learned a damn thing yet from this recession.
    I have seen no evidence yet that we have learned anything, all we do is blame something/someone.
     
  5. Trajan
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    Trajan conscientia mille testes

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    agreed.

    I still think we need the ultimate check, a balanced budget amend., not that a 2/3s requirement would be the end all benchmark either, if all the scoundrels across each aisle wouldn't work together they would, BUT it would be very difficult and there would be no place for any of them to run and hide.
     
  6. uscitizen
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    uscitizen Senior Member

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    yep, but first we need to acknowledge that WE have a problem. Not just THEY have a problem or that it just happened as a cycle of the economy.
    Kind of like alkies first step of recovery.
     
  7. Trajan
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    Trajan conscientia mille testes

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    oh sure. I have said so and say again, balanced budget amend.? good, I am in; raise my taxes, kill the bush cuts, I am cool.
     
  8. uscitizen
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    uscitizen Senior Member

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    Me too, but the majority are still following the self destructive blame games of their partys.
    Also raise the SS eleigability age and cut some frivolities from Medicare. Such as those electric scooters.
    Give em health care but the scooters are beyond health care. And get cheaper drug prices.
    sigh...
     
    Last edited: Jul 9, 2011
  9. william the wie
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    william the wie Gold Member

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    Just for Ss & Gs consider a national lottery with 100% payout supported by ads and product placement. In an hour 12 different lotteries at intervals 1, 2, 3, 4, 5, 6, 10, 12, 15, 20, 30 and 60 minutes. If American winners can take income only 30 year bonds at 4% tax free while the principle is written off never to be repaid and net ad revenue is returned to the country where it is generated minus a 5-10% collection fee the debt clock would start running backwards.
     
  10. flacaltenn
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    flacaltenn USMB Mod Staff Member Gold Supporting Member

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    Gee Thanx Trajan --

    I needed a good buzzkill... Now I have no motivation to even discuss it or get up in the morning..

    Think I'm gonna "turn on - tune in - and drop out". Anyone want to go to Woodstock?
     

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