Since 1929, we have learned so much about economics
Times have changed since 1929. We have made great strides in economic understanding and the ability and willingness of govts and their alliances to work together.
Yes we’ve had other financial woes, but during this pandemic, we’ve also shown a willingness to adapt in a way that has never been done before.
Yes the DOW and the markets have been playing see-saw, but that happens whenever people get worried.
BUT because of the pandemic, businesses were willing to find ways to have their employees work from home wherever possible. Restaurants went to take out and delivery instead of mostly eat-in models.
And we do still have essential services, like health care, grocers, car parts and maintenance and utilities whose employees are pretty much guaranteed employment. By law.
We have tech support services to help us thru the transition to home-work.
And as far as the environment goes, this pandemic may actually have done us a favour. To the point where govts might actually be encouraged to push businesses to continue work from home plans where possible. And this time, they might just comply. If their employees show they can be trusted to actually work.
So our system is shifting to meet the needs of this pandemic in a way that has the future actually looking better for us.
And who knows? All the cooperation for Covid 19 plans of action between govts and businesses might actually reduce the war machine.
If we can stay the course…
Because if we don’t, what we will have is wave after wave of pandemics and the population of the world will be desimated. With no way to protect the critical people. And we might end up back in earlier times, having to rebuild from cottage and farm industries to the tech and war machine world we have now.
So yes, there needs to be change. But this isn’t the first time the entire world has had to shift it’s course to survive.
Who in this will you be? The one who gives up; or does everything they can to buck the people trying to see us thru this; or someone who does their best to struggle thru and will see the better future this world could have?
For now you are being asked to wash up and limit your travels. For now you are being asked to tough it out.
The army isnt at your door because of riots or rising criminal behaviours. There is no martial law.
We still have food and gas. We can still stay in touch with our loved ones. And the govts and banks are fighting to stabilize the economy. And the pandemic. Instead of each other. Well for the most part.
A bit of common sense is all we need to ease the transitions we need to make. We can do that, can’t we?
….. What Is a Recession?
In a recession, gross domestic product contracts for at least two quarters. But that’s not all. There are many more economic indicators that signal a recession. That’s because GDP growth will usually slow for several quarters before it turns negative. That’s in response to sluggish consumer demand.
….. What Is a Depression?
A depression is an extended recession that has years, not quarters, of economic contraction. It’s more severe than a recession. Unemployment reaches 25%, housing prices plummet 30%, and prices fall 10%. The devastation of a depression is so great that the effects of the Great Depression lasted for decades after it ended.
The best way to find out if we are in a recession or a depression is to understand where we are in the business cycle. The recession follows the peak of the business cycle. It’s signaled by irrational exuberance and asset bubbles.
depression on the scale of that in 1929 could not happen exactly the way it did before. Central banks around the world, including the U.S. Federal Reserve, are more aware of the importance of monetary policy in regulating the economy.
……. from the weforum
In a bewildering raft of financial measures around the world, the European Central Bank launched new bond purchases worth 750 billion euros ($817 billion). That brought some relief to bond markets and also halted European shares’ slide.
The U.S. Federal Reserve rolled out its third emergency credit programme in two days, aimed at keeping the $3.8 trillion money market mutual fund industry functioning. The Bank of England cut interest rates to 0.1%, its second emergency rate cut in just over a week.
China was to unleash trillions of yuan of fiscal stimulus and South Korea pledged 50 trillion won ($39 billion).
U.S. economist Irving Fisher argued that price instability (inflation and deflation) was the cause of most economic turbulence and could be averted by astute central bankers. Keynes agreed with this but thought it was not enough. One of his main observations was that although an individual is perfectly rational in wanting to hunker down and hoard his money during tough times, everyone’s hunkering down at the same time only makes things worse. Government needs to step in and avert such downward spirals by temporarily spending much more than it takes in.