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An interesting facet of this fiasco is that the poison of artificially low credit is also being touted as the antidote. I for one believe that we would have bee
by Prrometheus 19y ago
An interesting facet of this fiasco is that the poison of artificially low credit is also being touted as the antidote. I for one believe that we would have been better off if we let the economy slip into a recession in 2001 and coped with 7% or 8% unemployment, rather than causing a massive asset bubble and a gigantic financial mess.
- jdavid 19y agoi doubt we would have seen 7-8% unemployment. the US wines when unemployment reaches 4%. Typically in recessions large companies lay people off to protect share price and free up cash. It's just an excuse to shareholders to let go some of the spending. If companies were to cut spending in a boom time shareholders would speculate that something bad was going to happen. in recessions labor prices return to market value, and entrepreneurs like us can afford to hire talent. the best indicator of an economic down turn is a cut in R&D, and from what I can tell engineering salaries are still increasing right now. I think the thing to do, instead of bailing out homeowners with low interest rates is to provide a free education. we are in a full blown knowledge economy and EVERYONE will have to make the transition sooner or later.
- trevelyan 19y agoYou already have 7-8 precent unemployment and probably had it back in 2002. The reason you don't know this is because of the very specific US way of counting unemployment: someone who has not "actively" looked for work in the last 4 weeks is not counted. This is the reason countries in Europe tend to report higher unemployment than the United States does. Look to payrolls reports and the percentage of the population "working" for a better sense of the job market.