Recession

[smurphy]

OK folks we are nearly three years into the worldwide recession. And the outlook is still pretty bleak. So what do you see as the underlying causes of the recession(honestly shouldnt we be calling it a depression after 3 years)? What do you see as the effects of this recession? And most important are the powers that be doing an adequate job at remedying the situation or are they a liability?

OK my experience as an Irishman will probably be different to everyone elses but from my viewpoint the causes are....


Neoliberalism: YouTube - an experiment of neoliberalism This approach which is popular among many world leaders has led to many of the sub causes. Mainly deregulation(banks going wild), reckless Keynesian-esque fiscal policy(indiscriminately pumping money into the economy) and greater amounts of inflation(meaning you money is worth less even more).

Unionisation: I am not talking about your average union. I am talking about these bloated behemoths who have no qualms about holding the economy hostage if they do not get their way. For example, in Ireland, the union SIPTU is a conglomerate of several unions and has over 200,000 members in a country with just under 4 million people. Because of the influence and power they have they can fight to maintain their members income levels even if the government cannot afford them. So basically unionisation is the protection of the few to the detriment of the many when it gets to the national level.

And unique to mainly EU countries............... interest levels: EU wide interest levels are set by the European Central Bank in Frankfurt. And the ECB is under the thumb of the French and German governments. So the interset levels set must always be to maximise growth/minimise contraction in these countries regardless of how it affects other member states. This is why we are seeing bailouts in several european countries. It also doesnt help that there is a single currency which Greece/Ireland/Portugal are obliged to stay within. The problems would be a lot less severe if they had their own currency and could devalue or even if they could set their own interest levels. A case where a bit of deregulation is needed.

Bondholders and Shareholders: The people governments go out of their way to protect(well, them and bankers). The speculation by both these can lead to dangerous dynamics in the marketplace like unsustainable growth or devastating contractions. And to make things worse if they make a bad investment governments have shown(by pumping money into banking blackholes and reckless fiscal policy) that they will be protected from taking too much of a financial hit. Speculation by these people was definitely a contributing factor to the recession.

OPEC: Only recently a factor. I dont need to tell you about rising oil prices at the moment. This leads to dangerous levels of inflation which means that any chance any economy had of stabilising is well gone. It is in OPECs interest that oil prices inflate so quickly and the sad fact is that they can increase prices on a whim. And even worse they are essentially a cartel(pretending to be an oligopoly). And cartels are supposed to be illegal.

And the effects.........

Obviously high unemployment, deflation, dangerous levels of inflation but also

: Reduced social mobility

: Highly reduced birthrate(it will be a problem as the population on average gets older)

: Loss of essential services funded by governments

: Psychological effects(Recession fatigue)

I dont think I am qualified to judge how the powers that be have done regarding this crisis in general. I cant judge Obama as I am not an American. So the Irish hierarchy is fair game even if everyone else isnt. During this recession and actually for a few years before they have been nothing but a liability. The one trait needed by this government, that they show some backbone and resolve, has been horribly lacking. Nevermind that a lot of the TDs(ministers of parliament) have dubious at best business dealings. Irish politics is cronyism at its worst. And the newly elected government just prove, that the more things change the more they stay the same. The outlook for Ireland just gets bleaker and bleaker.


So what do you make of the recession? Whose fault is it? Who is the worst affected? Do you agree with what your government has done to remedy the situation?

[Sinister]

Well so far, the U.S. has responded in a combination of ways, but mainly two, from what I can see. One, Mindless Optimism/Outright Lying, which is a PR favorite lately. Two, considering hyperinflation and spending more money.

These tactics are so outrageously stupid that I...kind of half wonder if they might work just to spite the obvious. (You know, kind of like someone telling you that if you pour enough gasoline on a fire it'll put it out.) But they're responding in kind of a Charlie Sheenesque way, that is, ego-maniacal and contrary to the truth.

Of course I don't see all and I'm sure they must have some sort of ****ing contingency...t'would inspire courage to prove they DO have a some sort of initiative. I've been told they plan to implement QE3, though I've also been told it will not be called that. What will be the ramifications? *shrugs* Idk, could be another Y2K scare. I doubt it, though.

-Sin