I skimmed it. At least the author is trying not to be a pansy about the economy. I wish I could say the same about a lot of nervous nellies and chicken littles on FR.
This recession is a good thing.
It always sucks when people lose jobs, but this economy has been a house of cards since the late nineties. Prices became artifically inflated due to extreme borrowing.
This recession is bringing prices back down to earth. Exhibit A is oil. Exhibit B is real estate.
Where to start?
Why is it that the world looks to America for leadership in this crisis, but in another breath blames America and capitalism for causing the crisis?
Nobody ever mentions the record cost of oil, and all energy as a major contributor to the decline.
Russia, Venezuela, Iran only became significant players in world politics because of the high price of oil. It was a matter of time before the oil barons extracted the breaking point to shut down consumer based economics. The oil producers shot themselves in the foot for being so greedily capitalist. Even though they say they dispise capitalism, they sure like to make lots of money.
Europe has not produced much of anything tangible for many years. There has been little growth. Probably because of the socialist economics they have been practicing.
Now America is on the verge of becoming a practicing socialist economy. Stagnation will allow another nation to rise as an economic giant. Or the crisis could bring out new ideas and new technologys that might jump start our economic machine. But it’s not looking good with the nationalization of banks, government healthcare, and economic hardship in the name of saving us from the weather.
Personally, I believe the author is dead on target here and I also believe the majority of American voters haven't a clue how to manage anything more than ask the federal government to run everything.
If we can somehow salvage what's left our capitalist structure, this author is correct and we'll emerge from this stronger and even further in the lead. But, if on the other hand we allow these insolent children to run things into the ground I believe we may also be witnessing the sun setting of the great experiment.
Mead is fundamentally wrong. As the saying goes all happy families are similar, but dysfunctional families are all dysfunctional in their own ways.
This recession is like no other of the industrial age. Those were all overcome via expanding productivity, expanding populations, and expanding consumption. All the claims of American exceptionalism is hopeless optimistic delusion. The dinosaurs thought they were all fine and dandy until a comet with their name on it smacked into the earth. There are no more productivity increases to be wrung from industrialized states, no more growth in Europe as the population begins to decline, and no more consuming from Americans as they have already consumed far too much.
His worst case prognostication for China is exactly what is happening to America. The U.S. financial system has imploded and U.S. banks are all actually insolvent having sustained losses of upwards of 3.6 trillion dollars. The collapse of asset and real estate prices are crushing the American middle class as they had no savings to begin with and were relying on a false model of perpetual asset appreciation to finance their retirements. Home prices down and falling for the next several years, 401k’s down 40% and continuing to fall. In addition to a massive bulge in approaching retirees and tens of trillions more in unfunded future entitlements that the politicians promised but will not be able to deliver. Retirees will be eating cat food were cat food not so prohibitively expensive.
America’s growth since the 80’s and it’s high standard of living have by financed by two factors, foreign borrowing enabled by dollar hegemony and a consumption push based off of future earnings. The Federal Reserve is busy destroying the credibility of the dollar as we speak and the future earnings have proved ethereal, though the liabilities remain. Abandon all hope.