Timeline of events- Great Depression and Current Bubble

Once again a rather interesting blog about bubbles.

I found this one to be more interesting than most for three reasons:

1. It starts with an analysis of an analysis- the basic facts of The Great Depression come from analyzing a book written by John Kenneth Galbraith, covering the 10 years up to the crash.

2. This analysis also includes a timeline of about 20 years leading up to the current crash.

3. This analysis also includes a list of assets that the average citizen had then, vs the assets we have now, for surviving such a crash (with a definite survivalist bias).

It's that last bit that interested me the most- from my own distributionist standpoint, protectionism is a solution to that last problem- the fact that many people today live so far from the means of production that they are unable, in a time of decreased trade and decreased credit, to access the basic necessities of life.

An example, from his "Current Conditions that Galbraith could never have foreseen"


10. The U.S. claims to be competitive but much of this competitiveness is highly selective and thus illusory. Everything in the U.S.--labor, goods, buildings and taxes--is high-cost, overregulated (except for finance, banking and governance) and vulnerable to unpredictable lawsuits and officially sanctioned looting. Other than recent immigrants, non-U.S. employers find the workforce is often surly, unappreciative, narcissistic, entitlement-obsessed, unhealthy, poorly educated, unmotivated and more inclined to get-rich-quick schemes than actual enterprise or productivity.
The middle management labors under impossible demands to enrich stockholders next quarter and heavy turnover insures few stay in any job long enough to learn it effectively. Team cooperation is a doublespeak fraud imposed by "facilitators," creating a phony work environment where employees and managers alike pretend to care. This bogus environment breeds a looting, game-the-system mentality in which everyone is grabbing for all they can before retirement, restructuring, reassignment, resignation or getting fired.

This is why I saw this as being less CT than many survivalist blogs on the topic, and more behavioral economics based.

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Outstanding post and comments

I attended a talk given by Prof. John Kenneth Galbraith many years ago where he talked about that book, plus he expanded upon something he covered in his book, which didn't yet go by the name we recognize today: securitization.

Securtization first came into being - or at least popular usage - in the 1920s leading up to the Great Depression, then was stopped - most probably by FDR's New Deal programs and regs - not to return until the 1970s and 1980s, and with the "securitization of securitization" occurring in the past eight years.

This "securitization of securitization" was what Prof. Galbraith expounded upon during that talk, leading (by design) to an ever-increasing super-concentration of wealth in an ever smaller number of the economic elite, which predictably led to the Great Depression and has led to the present economic meltdown today.

With the Obama Administration (via Geithner, Summers, Bernanke, Altman, Edward Rosen, and others) opting for the re-securitization of that "securitization of securitization," we are highly likely due for the Greatest Depression.

I wish it were otherwise....

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when you see a site like this

consider quoting some relevant passage. You can also invite that person to cross post (but make sure it's credible!) by posting a comment on their blog.

But please the quality of EP content so far has been very high and let's keep it that way!

There are tons of sites devoted to "survival" of the impending x catastrophe and those are "CT" in my view, only people writing with well cited, referenced, insightful, original blogs please!

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"...people today live so far

"...people today live so far from the means of production that they are unable, in a time of decreased trade and decreased credit, to access the basic necessities of life."
You seem surprised--this squeeze has been apparent since at least 1990. But you are correct...we are screwed. No vaseline in sight!;-)

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I didn't mean to seem surprised

In Oregon we've had land use laws attempting to prevent this since 1972- and in the Portland and Eugene Metro areas, I've got to say it's largely failed, despite the robust farmer's markets.

Near as I can tell, we've been heading down this line since 1948 and the assumption the countries can replace war with trade (they can, but it just becomes a trade war with less pain spread out over more time, instead of big pain in a short time).
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Maximum jobs, not maximum profits.

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Maximum jobs, not maximum profits.