Anyone who doubts the potential for a Depression needs to read the newspaper. No, don’t bother with the front page or the business section – skip over to the part that matters. A quick glance at the ads taken out by retail stores shows an amazing number of deep sales, running 50 or even 75 percent off on everything. They’re doing this because the stores are unusually, unreasonably quiet. That’s the defining characteristic of any market failure, whether you’re looking at it from the strip mall or the Capitol Mall. It’s the unusual quiet that comes from everyone staring at each other, shrugging their shoulders.
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Economics and commerce, all built from scratch.
Was it so Great?
President Obama has gotten his first bill through, an $825B package of tax breaks, local government aid, and unemployment extensions. They call it an “Economic Recovery” bill because the term “Stimulus” is a bit passé now. What’s clear about it, however, is that this bill is designed to do little more than avoid Depression and turn it into an ordinary Recession, no matter what they call it.
What’s in a name? A little, and a lot.
Renno!
In the city of Saint Paul, there are 2200 plus vacant homes, and the inspection staff at the city agree that they are probably counting about half of the total. That means about 4% of the units are vacant in the City overall, and a lot more expected to hit foreclosure. As bad as this is, I’m quite sure that Saint Paul has a better handle on this than most cities across the nation, and is far ahead of any suburb.
What does this mean for the future?
Cultural Property
Globalism, as a concept, has many strange facets that can each dazzle and blind in their own way. The basic principle is that the people of the world are somehow coming together and forming a single marketplace. Since the start of this thing called “civilization”, however, a marketplace has been the center of social life and the two have not been easily distinguished. Culture and commerce are ultimately, the same thing right down to the bare bones like contract law and the principles of incorporation.
Keynes to Success
The Federal Government has thrown its entire weight into preventing a Depression through a program of dedicated spending. The original bailout/stimulus of $700 billion is being matched by a project budget deficit of $1,100 billion for 2009, plus whatever President Obama proposes and untold amounts of money loaned by the Federal Reserve. All together, the total debt of $11 trillion is already similar to the size of our total economy, but we have been told that the additional borrowing is necessary to keep the economy running.
One question is rarely asked: What happens if it doesn’t work?
