A month ago, investors and analysts were somewhat chipper, with many predicting that the end of the "Great Recession" has arrived. There was some restrained celebration when the leading indexes hit milestones (e.g. DOW over 10,000 S&P over 1,000 and NASDAQ over 2,000), but it was halfhearted. Now panic is in the air again, and pessimists are everywhere predicting that we have left the Great Recession behind us only because we have traded it for the "Greater Depression".
I read an article that I wanted to share, and rather than put it out on MarketWatch (as I normally would) I decided to stick it here so that I can post something of substance on my first day as an independent blogger. So here it is:
The world has been slow to realize that we are living this year in the shadow of one of the greatest economic catastrophes of modern history. But now that the man in the street has become aware of what is happening, he, not knowing the why and the wherefore, is as full today of what may prove excessive fears as, previously, when the trouble was first coming on, he was lacking in what would have been a reasonable anxiety.
He begins to doubt the future. Is he now awakening from a pleasant dream to face the darkness of facts? Or dropping off into a nightmare which will pass away? He need not be doubtful. The other was not a dream: this is a nightmare, which will pass away with the morning.
For the resources of nature and men's devices are just as fertile and productive as they were. The rate of progress toward solving the material problems of life is not less rapid. We are as capable as before of affording for everyone a higher standard of life - high, I mean, compared with, say, 20 years ago - and will soon learn to afford a standard higher still.
We were not previously deceived. But today we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand. The result is that our possiblilties of wealth may run to waste for a time - perhaps for a long time.
The writing style may be a bit old fashioned, but with good reason. If you happen to already know me from other blogs you may already know that old fashioned appeals to me. Style aside, this is a poignant message and a very hopeful outlook in what appears to be a bleak time. "Man in the street has become aware of what is happening", "he... is as full today of what may prove excessive fears as... he was lacking in what would have been a reasonable anxiety [previously]."
I'm not predicting that the markets and business will bounce back right away, or even in the immediate future. But I don't buy into the hopelessness that is in the mind and the mouth of "the man in the street". This may be the first severe economic crisis in most peoples' lives, but it is by no means the first in history.
I bring the words of this writer because he certainly knew what he was talking about. How do I know? Because as appropriate and timely as this message is, it was not written in the year 2009, or even about the year 2009. No - it was written by a man named John Maynard Keynes, and he was writing about the year 1930.
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of course zero comments here- who wants to read more gloom?
ReplyDeletecome on squeak- lets hear the real deal!
- areivim
Haha - it was supposed to be uplifting. But oh well.
ReplyDeleteareivim, you got topics you'd like to see - just say the word!
squeak -
ReplyDeleteI'm looking forward to you making a post on whether the sun circles the earth or vice versa.
John Maynard Keynes should have read Alexander Fraser Tyler.
ReplyDeleteLOL!
ReplyDeleteKeynes does not require a democratic machine. His view is that man will always continue to use his ability to improve his standard of living. This would be true even in a dictatorship, though you can probably argue that the greatest and most rapid improvements occured in democratic, capitalist society. But even if improvement is less rapid it is still improvement. And setbacks are temporary.
Then how is that third world countried have remained third world countries?
ReplyDeleteThe standard of living in third-world countries now is better than it used to be.
ReplyDeleteIs that because of their own advances or because of the charity of other, more advanced nations?
ReplyDeleteThere are some who would argue that the "charity" of the more advanced nations is part of what is holding back the third-worlders.
ReplyDeleteMy mind has just been blown.
ReplyDeleteSo they're in the dependancy/bondage part of the cycle. And the only way to keep us out of there is by innovating, producing, and being self-reliant.