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Every recession in history has generated this same category of article - every generation feels that their recession is special because "things have changed now

Every recession in history has generated this same category of article - every generation feels that their recession is special because "things have changed now!" Maybe this one is different - that's a possibility. But I wouldn't bet my money on it.

gph 11y ago
To be fair, the world is constantly changing. I don't know if that means each recession is special so much as unique. Just looking at the last major recession in the 70s, things did change quite a bit from there. Manufacturing and distribution of goods started to form into the global supply chain we have today, that was certainly a unique development in our world based on changing technologies. It's not that much of a stretch to expect similar unique changes to the global economy today due to changing technology and consumer habits.
- nevinera 11y ago
  It is, and eventually, we will probably run into a real game-changer.. but I'm mostly concerned for all the people that are saving money in index funds. Every recession, the news and the discourse are about how this one is special, and how the causes of this recession run so deep. People are not good at remembering that we had those same conversations last time and the time before - they get a gut feeling that 'this is the big one', and they pull their money out of the market during the recession and put it back in after everything's ok, essentially tossing a major fraction of their life savings overboard. What people seem to never consider is that when we actually move out of an expansionist economy, the effects will be much broader than "our stock returns are not so good anymore"; their inability to retire at 65 would be the least of their concerns.
  - anti-shill 11y ago
    but the casino aspect of the economy has grown stronger and more pervasive over time. Look at a chart of the 10 year US bond. The interest rates have plummeted over the last 30 years. These low rates have intensified the casino aspect of the stock market. The rates were lowered after the crashes of 2001-2002 and 2008-2009. But the rates cannot be lowered any more. Why? They are at zero, effectively. That is different.
    - nevinera 11y ago
      The point is that there are always differences - each recession is a snowflake, with distinct causes and circumstances. That doesn't impact the fact that they all behave pretty much the same way at the large scale, and it shouldn't affect your decisions about the market (unless you are an expert, and inordinately good at avoiding various cognitive biases). Gloom and Doom sells papers, and it always has.
      - mrdodge 11y ago
        There is nothing about growth that is guaranteed. Perhaps thinking that the entire world can adopt western style institutions and would become good consumers was too optimistic.
    - kruhft 11y ago
      > But the rates cannot be lowered any more. Why? They are at zero, effectively. They could always go negative: http://www.global-rates.com/interest-rates/libor/swiss-franc/swiss-franc.aspx
      - ersii 11y ago
        Another example - Sweden's National Bank: http://www.riksbank.se/en/ http://www.riksbank.se/en/ (See the Repo rate).
    - forgetsusername 11y ago
      >These low rates have intensified the casino aspect of the stock market. So, are you making the claim that the stock market is less stable today than it was 100 years ago?
hga 11y ago
There's even a relevant book with that this phrase as its title, This Time Is Different: Eight Centuries of Financial Folly (http://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691152640/ http://www.amazon.com/This-Time-Different-Centuries-Financia...).
ArekDymalski 11y ago
As always: it all depends on how meta/abstract approach someone uses. On certain level of abstraction each crisis seems to follow the same mechanism (and any possible differences can be explained on even higher level of abstraction). And when you analyse things on the more detailed level you notice that "this time it's different", but of course "any possible differences (...) higher level of abstraction". Ans doth approaches seem to be equally valid in their specific contexts and applications.
mslot 11y ago
Our economy has reached a point where it's becoming so harmful to the environment it exploits that it's causing a mass extinction, an event that hasn't occurred for 250 million years. On the timescale of a few decades, things are becoming very, very different.
- shoo 11y ago
  yup. we're putting CO2 into the atmosphere at a ridiculous and ever-increasing rate. 40 gigatons of CO2 last year -- that's around 5 tons of CO2 / (person * year), assuming a fantasy version of the world where we're all contributing an equal amount of pollution. it's not just "the economy", it is (people) * (polluting affluent lifestyles). that said, it doesn't help that the people with the bulk of the wealth and political power are the ones that perceive they have the most to lose if the status quo changes. it also doesn't help that it is very difficult to stay focused on longer-term problems, while society tends to focus on playing the game for short term wins. invest, speculate, profit. it'll be an interesting few decades. hopefully we realise that ideas that served us well in the past are context-dependent, and the context is changing.
- blisterpeanuts 11y ago
  Mass extinctions have occurred with much greater regularity than every 250 million years. The ice ages come in pulses, to use the geological term, and both the warming and cooling trends have inflicted vast changes in the species inhabiting the planet. As far as CO2 emissions, the EPA's own statistics suggest a static-to-downward trend since the early 2000s in the U.S. (http://www.epa.gov/climatechange/ghgemissions/gases/co2.html http://www.epa.gov/climatechange/ghgemissions/gases/co2.html). We're barely above where we were in 1990, despite an increase in population from 250 million in 1990 to 319 million today. 3rd World economies will eventually follow suit, as they adopt the cheap new green tech that we're getting. The trend today is toward more efficient vehicles, cheaper and more available solar for houses, a massive switch in electric power plants from coal and oil to inexpensive natural gas which emits less carbon. Technology, Chinese mass production of green energy products like solar panels, American fracking of natural gas, all will conspire to reduce the carbon emissions. The trends are heartening.
- 11y ago

gph 11y ago

To be fair, the world is constantly changing. I don't know if that means each recession is special so much as unique. Just looking at the last major recession in the 70s, things did change quite a bit from there. Manufacturing and distribution of goods started to form into the global supply chain we have today, that was certainly a unique development in our world based on changing technologies. It's not that much of a stretch to expect similar unique changes to the global economy today due to changing technology and consumer habits.

nevinera 11y ago
It is, and eventually, we will probably run into a real game-changer.. but I'm mostly concerned for all the people that are saving money in index funds. Every recession, the news and the discourse are about how this one is special, and how the causes of this recession run so deep. People are not good at remembering that we had those same conversations last time and the time before - they get a gut feeling that 'this is the big one', and they pull their money out of the market during the recession and put it back in after everything's ok, essentially tossing a major fraction of their life savings overboard. What people seem to never consider is that when we actually move out of an expansionist economy, the effects will be much broader than "our stock returns are not so good anymore"; their inability to retire at 65 would be the least of their concerns.
- anti-shill 11y ago
  but the casino aspect of the economy has grown stronger and more pervasive over time. Look at a chart of the 10 year US bond. The interest rates have plummeted over the last 30 years. These low rates have intensified the casino aspect of the stock market. The rates were lowered after the crashes of 2001-2002 and 2008-2009. But the rates cannot be lowered any more. Why? They are at zero, effectively. That is different.
  - nevinera 11y ago
    The point is that there are always differences - each recession is a snowflake, with distinct causes and circumstances. That doesn't impact the fact that they all behave pretty much the same way at the large scale, and it shouldn't affect your decisions about the market (unless you are an expert, and inordinately good at avoiding various cognitive biases). Gloom and Doom sells papers, and it always has.
    - mrdodge 11y ago
      There is nothing about growth that is guaranteed. Perhaps thinking that the entire world can adopt western style institutions and would become good consumers was too optimistic.
  - kruhft 11y ago
    > But the rates cannot be lowered any more. Why? They are at zero, effectively. They could always go negative: http://www.global-rates.com/interest-rates/libor/swiss-franc/swiss-franc.aspx
    - ersii 11y ago
      Another example - Sweden's National Bank: http://www.riksbank.se/en/ http://www.riksbank.se/en/ (See the Repo rate).
  - forgetsusername 11y ago
    >These low rates have intensified the casino aspect of the stock market. So, are you making the claim that the stock market is less stable today than it was 100 years ago?

hga 11y ago

There's even a relevant book with that this phrase as its title, This Time Is Different: Eight Centuries of Financial Folly (http://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691152640/ http://www.amazon.com/This-Time-Different-Centuries-Financia...).

ArekDymalski 11y ago

As always: it all depends on how meta/abstract approach someone uses. On certain level of abstraction each crisis seems to follow the same mechanism (and any possible differences can be explained on even higher level of abstraction). And when you analyse things on the more detailed level you notice that "this time it's different", but of course "any possible differences (...) higher level of abstraction". Ans doth approaches seem to be equally valid in their specific contexts and applications.

mslot 11y ago

Our economy has reached a point where it's becoming so harmful to the environment it exploits that it's causing a mass extinction, an event that hasn't occurred for 250 million years. On the timescale of a few decades, things are becoming very, very different.

shoo 11y ago
yup. we're putting CO2 into the atmosphere at a ridiculous and ever-increasing rate. 40 gigatons of CO2 last year -- that's around 5 tons of CO2 / (person * year), assuming a fantasy version of the world where we're all contributing an equal amount of pollution. it's not just "the economy", it is (people) * (polluting affluent lifestyles). that said, it doesn't help that the people with the bulk of the wealth and political power are the ones that perceive they have the most to lose if the status quo changes. it also doesn't help that it is very difficult to stay focused on longer-term problems, while society tends to focus on playing the game for short term wins. invest, speculate, profit. it'll be an interesting few decades. hopefully we realise that ideas that served us well in the past are context-dependent, and the context is changing.
blisterpeanuts 11y ago
Mass extinctions have occurred with much greater regularity than every 250 million years. The ice ages come in pulses, to use the geological term, and both the warming and cooling trends have inflicted vast changes in the species inhabiting the planet. As far as CO2 emissions, the EPA's own statistics suggest a static-to-downward trend since the early 2000s in the U.S. (http://www.epa.gov/climatechange/ghgemissions/gases/co2.html http://www.epa.gov/climatechange/ghgemissions/gases/co2.html). We're barely above where we were in 1990, despite an increase in population from 250 million in 1990 to 319 million today. 3rd World economies will eventually follow suit, as they adopt the cheap new green tech that we're getting. The trend today is toward more efficient vehicles, cheaper and more available solar for houses, a massive switch in electric power plants from coal and oil to inexpensive natural gas which emits less carbon. Technology, Chinese mass production of green energy products like solar panels, American fracking of natural gas, all will conspire to reduce the carbon emissions. The trends are heartening.
11y ago