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What they addressed at the end of the article is the key point to me. There are reduced nations left to fuel the worlds economic engine in a recession. Previous

What they addressed at the end of the article is the key point to me. There are reduced nations left to fuel the worlds economic engine in a recession. Previously events like 2008 we had India, Middle Eastern and Chinese economies doing massive development, so while the western countries went to recovery mode, the could benefit and hold themselves a bit better from these other nations growth. Today if we hit a trade/financial crisis its likely to spread across the major global economies. African areas and India seem to have ongoing growth potential but I dont see them coming to the rescue. And should a major economy like US have a crisis this could have a global impact compounded further by; 1) The massive global debts being accumulated at personal and state levels pretty much everywhere. This is setting ourselves up for potential contagious failure of our systems. Not just inter country finance but imagine there was significant defaults and how that would spread to pension funds and back into the economy. Small business lending etc. Our globalised and finance heavy economies dont have adequate circuit breakers. Further 2) I suspect developed nations urbanisation will make any significant downturn harder on the masses than previous recessions. In the 1920's you had 30%+ of people on farms. Now you have something like 2%. Back then people could more easily tighten belts and become increasingly self sufficient over a few hard years. Today it would be a significantly more difficult position for the government to manage, both by volume of people that would need full support and back to their indebtedness. This could spell real trouble if the wheels fall off. And given history, the wheels will fall off occasionally. Anyway, I'm not trying to scare or convince people to buy bunkers. I do feel we should demand better long term governance from politicians vs this 'whats gets me in next term' politics we see today. With the tribalism and instant gratification of today's politics it doesn't seem to offer the best hope. But really who knows...

FussyZeus 9y ago
Going along with everything you've said, the fact that the wealthy now control such a vast share of assets and capital is a super not-good thing in the event of a hard recession. Honestly our situation now looks so much like the Roaring 20's, a certain segment of the population getting a shitload of everything, while everyone else goes hungry (and famously, the roaring 20's tapered off nicely and we all came out better- oh no wait, it was the Great Depression and we had to participate in a World War to get out of it). Income Inequality and Lack of Social Mobility are a cancerous tumor growing inside the United States and many other developed countries too. This shit is a powder keg and the wealthy need to realize that if they keep pushing to get that next dollar, eventually all their money isn't going to keep the pitchforks at bay.
- LeifCarrotson 9y ago
  > we had to participate in a World War to get out of it I'm not sure that "participation in a World War" was what got us out of it, nor is that an admissible tool to correct a recession. WWII did kick-start a lot of valuable developments, and it allowed the government to write a lot of checks and take out a lot of loans to inject money into industry, I'll grant. But I'm curious what you think would have happened had the Nazis not come to power in Germany, and Japan not taken Manchuria.
  - FussyZeus 9y ago
    It's a booster shot of capital first into industry and agriculture, then into the hands of the wives of soldiers, then into the soldier's themselves when they got back. It's not a great tool at all, I'm not saying it's a good thing, the fact that a war is fantastic for the economy is common knowledge, or at least I thought. It's a shitload of Government spending that's directed from all sides of the political spectrum (mostly) and often isn't questioned at the time, so you get the capital shot without the hangover of the political divide like we have now. Things are objectively easier when your enemy is as well defined and totally evil as the Nazi's.
    - Quenty 9y ago
      That being said, War is really bad for quality of life. Every tank, missile, bullet, could be used to improve a consumer’s life instead. And every life lost, building destroyed, et cet is potential economic assets. Economics that are good on paper isn’t really the end goal.
      - FussyZeus 9y ago
        I don't disagree, but you asked me how the war got us out. That's how it did.
      - chii 9y ago
        > Every tank, missile, bullet, could be used to improve a consumer’s life instead but just because no war happesn doesn't mean that the consumer's life gets improved. THe bullet money would've been spent elsewhere similarly to a war, to benefit the few rich.
JumpCrisscross 9y ago
The United States exported $2.2 trillion of goods and services in 2016 [1]. That's 12% of our $19 trillion GDP [2]. Moreover, because we run a trade deficit, net exports subtract from our GDP [3]. The reason why where the American economy goes, so does the world, is American consumption. Americans buy. As a result, foreigners end up with claims on American assets. Those claims are an outward transmission channel for economic shocks [4]. The same is not true in reverse. China crashing wouldn't be nice for us. But it's less dramatic to America if China crashes than vice versa. [1] https://fred.stlouisfed.org/series/IEAXGSA https://fred.stlouisfed.org/series/IEAXGSA [2] https://fred.stlouisfed.org/series/GDPA https://fred.stlouisfed.org/series/GDPA [3] https://fred.stlouisfed.org/series/A019RE1A156NBEA https://fred.stlouisfed.org/series/A019RE1A156NBEA [4] https://www.econstor.eu/bitstream/10419/60730/1/635889102.pdf https://www.econstor.eu/bitstream/10419/60730/1/635889102.pd...
- dragonwriter 9y ago
  > Moreover, because we run a trade deficit, net exports subtract from our GDP No, net exports add to GDP, its just that the value is negative. (Or, equivalently, the positive number of net imports is subtracted from GDP.) > The reason why where the American economy goes, so does the world, is American consumption. Americans buy lots of stuff. As a result, foreigners end up holding lots of claims on American assets. Those claims are the transmission channel through which American shocks reverberate abroad [4]. The same is not true in reverse. No, the mechanism isn't the same, but there is a reverse mechanism; foreign shocks dry up the flow of capital into the US from abroad (and potentially leads to disinvestment), which reduces production possibilities in the US. It's the flip side of the way US shocks affect the rest of the world, but the net effect is similar (though the domestic conditions which can magnify or mitigate it are different from a demand-driven shock.)
  - JumpCrisscross 9y ago
    > foreign shocks dry up the flow of capital into the US from abroad In 2015, foreign direct investment into the United States was around half a billion (EDIT: trillion) dollars [1]. Between 2003 and 2014, inward foreign portfolio investment trended around $1 trillion a year [2]. Losing a significant fraction of this would hurt, but it's well within the capacity of the economy, with monetary support, to absorb. The American economy just isn't very dependent on foreign capital. Like apple pie, we prefer our problems home made. [1] https://www.bea.gov/scb/pdf/2017/08-August/0817-new-foreign-direct-investment-in-the-united-states.pdf https://www.bea.gov/scb/pdf/2017/08-August/0817-new-foreign-... [2] https://www.federalreserve.gov/econresdata/notes/feds-notes/2016/international-portfolio-investment-holdings-of-long-term-securities-in-the-enhanced-financial-accounts-20160805.html https://www.federalreserve.gov/econresdata/notes/feds-notes/...
cm2187 9y ago
And even in the 2008 crisis, the chinese economic engine was largely boosted by the money printed in china and the ensuing local credit boom (exports have otherwise collapsed which would have hit them hard). I don't think this trick is repeatable in the short term.
subterfudge44 9y ago
Falling birth-rates of middle-class/upper middle-class in USA coupled with strong government hatred for Asian immigrants is likely to result into serious economic issues for USA in next 10-15 years. As the society fails to generate highly productive people all that debt is going to become a problem.
perseusprime11 9y ago
I think Africa is a great opportunity and we are not scratching the surface. Imagine the world dynamics if 100% of Africa is highly educated.
- mythrwy 9y ago
  There are lots of great opportunities in the world but in many cases the block to realization is local culture and behaviors. Violence, corruption, tribalism, cultural bigotry, religious zealotry.... Eduction is only a small part of the answer and hard to implement with the above.
- peoplewindow 9y ago
  People have been trying to turn Africa into a great opportunity for far longer than I've been alive. It never works. There's something more fundamental there that's causing problems than lack of education. That said, I believe the most important stats are moving in the right direction there.
  - wavefunction 9y ago
    >There's something more fundamental there that's causing problems Exterior interests in the natural resources of Africa and interior factions willing to undertake any inhumanity if it means personal enrichment, which suits those exterior interests just fine.
  - namlem 9y ago
    African economies have been doing better than ever. A number of countries in Africa are experiencing high growth rates.
  - kamaal 9y ago
    >>There's something more fundamental there that's causing problems than lack of education. Its called average quality of 'human resources' and a phenomenon resulting from it called 'human capital'. The former is a long drawn phenomenon that takes several decades, may be even a >100 year effort to make it happen. That involves of course investing in at the level of the whole nation a lot of effort to build a peaceful society and a political framework that helps you run education and general reforms, to build a nation of people with chops to be at the top of any human endeavor. Human capital is a resulting phenomenon that emerges from such a inertia. The US is the peak of holding the largest amount of human capital. Human capital is the greatest of all natural resources you can have. No natural resource comes close to the value human resources are.
mos8 9y ago
> I do feel we should demand better long term governance from politicians Do let us also know what we should demand from you.
seem_2211 9y ago
I think you've got a really underrated point about the farm population. We've generated enormous wealth and an amazing quality of life by specializing our skills and the global economy to a massive degree. But we've also got a system that leaves skilled workers vulnerable if they are "no longer required." Reading books before say 1950 and it's incredible to see the diversity of skills that individuals had. Now we're in a hyper-optimized economy where we get a handyman to do basic home maintenance tasks, or we get our oil changed by the dealership, rather than doing it by ourselves. And from an economic perspective, it makes sense - especially if you are able to earn a lot of $$ per hour. But it also makes us a lot more fragile. We've ruined our waistlines with our diets, we're wrecking our mental health and concentration skills with our social media / internet usage, and the average person has disastrous finances. I don't know how we fix this, but I often think about how I can protect myself and my standard of living if things get worse. I think we all should do this, and we should proactively do things to ensure that we've got some level of individual buffer for when things go bad.
- jogjayr 9y ago
  Compared to the 1950s it's also far easier for the average individual to learn how to do basic home maintenance, change their own oil or cut their own hair. It's not all doom-and-gloom.
  - FooHentai 9y ago
    >Compared to the 1950s it's also far easier for the average individual to learn how to do basic home maintenance, change their own oil or cut their own hair. With apologies for flipping back around to the doom and gloom, the picture for all three examples there is more complex. I get that your core point was the availability of information via the Internet, but in opposition to that the subjects at hand have generally become more complicated in themselves. This was illustrated to me recently when I picked up an old binder publication 'home car repair and customization' from a garage sale. It was from the sixties, and what was most interesting about the content was just how much more aspects of a car's maintenance and customization could be performed by a home handiman. Drastically more than is possible on modern cars. Paint jobs, upholstering repair/replacement, trim fabrication, structural repairs. All of them were in there and could be tackled with a relatively low density of information. About 75% of the whole publication was useless, at a fundamental level, if applied to modern vehicles. Now, the reasons for that are varied and some of them are not net negatives. The reason most can't work on structural components of their cars today is at least in part due to safety improvements, for example.

FussyZeus 9y ago

Going along with everything you've said, the fact that the wealthy now control such a vast share of assets and capital is a super not-good thing in the event of a hard recession. Honestly our situation now looks so much like the Roaring 20's, a certain segment of the population getting a shitload of everything, while everyone else goes hungry (and famously, the roaring 20's tapered off nicely and we all came out better- oh no wait, it was the Great Depression and we had to participate in a World War to get out of it). Income Inequality and Lack of Social Mobility are a cancerous tumor growing inside the United States and many other developed countries too. This shit is a powder keg and the wealthy need to realize that if they keep pushing to get that next dollar, eventually all their money isn't going to keep the pitchforks at bay.

LeifCarrotson 9y ago
> we had to participate in a World War to get out of it I'm not sure that "participation in a World War" was what got us out of it, nor is that an admissible tool to correct a recession. WWII did kick-start a lot of valuable developments, and it allowed the government to write a lot of checks and take out a lot of loans to inject money into industry, I'll grant. But I'm curious what you think would have happened had the Nazis not come to power in Germany, and Japan not taken Manchuria.
- FussyZeus 9y ago
  It's a booster shot of capital first into industry and agriculture, then into the hands of the wives of soldiers, then into the soldier's themselves when they got back. It's not a great tool at all, I'm not saying it's a good thing, the fact that a war is fantastic for the economy is common knowledge, or at least I thought. It's a shitload of Government spending that's directed from all sides of the political spectrum (mostly) and often isn't questioned at the time, so you get the capital shot without the hangover of the political divide like we have now. Things are objectively easier when your enemy is as well defined and totally evil as the Nazi's.
  - Quenty 9y ago
    That being said, War is really bad for quality of life. Every tank, missile, bullet, could be used to improve a consumer’s life instead. And every life lost, building destroyed, et cet is potential economic assets. Economics that are good on paper isn’t really the end goal.
    - FussyZeus 9y ago
      I don't disagree, but you asked me how the war got us out. That's how it did.
    - chii 9y ago
      > Every tank, missile, bullet, could be used to improve a consumer’s life instead but just because no war happesn doesn't mean that the consumer's life gets improved. THe bullet money would've been spent elsewhere similarly to a war, to benefit the few rich.

JumpCrisscross 9y ago

The United States exported $2.2 trillion of goods and services in 2016 [1]. That's 12% of our $19 trillion GDP [2]. Moreover, because we run a trade deficit, net exports subtract from our GDP [3]. The reason why where the American economy goes, so does the world, is American consumption. Americans buy. As a result, foreigners end up with claims on American assets. Those claims are an outward transmission channel for economic shocks [4]. The same is not true in reverse. China crashing wouldn't be nice for us. But it's less dramatic to America if China crashes than vice versa. [1] https://fred.stlouisfed.org/series/IEAXGSA https://fred.stlouisfed.org/series/IEAXGSA [2] https://fred.stlouisfed.org/series/GDPA https://fred.stlouisfed.org/series/GDPA [3] https://fred.stlouisfed.org/series/A019RE1A156NBEA https://fred.stlouisfed.org/series/A019RE1A156NBEA [4] https://www.econstor.eu/bitstream/10419/60730/1/635889102.pdf https://www.econstor.eu/bitstream/10419/60730/1/635889102.pd...

dragonwriter 9y ago
> Moreover, because we run a trade deficit, net exports subtract from our GDP No, net exports add to GDP, its just that the value is negative. (Or, equivalently, the positive number of net imports is subtracted from GDP.) > The reason why where the American economy goes, so does the world, is American consumption. Americans buy lots of stuff. As a result, foreigners end up holding lots of claims on American assets. Those claims are the transmission channel through which American shocks reverberate abroad [4]. The same is not true in reverse. No, the mechanism isn't the same, but there is a reverse mechanism; foreign shocks dry up the flow of capital into the US from abroad (and potentially leads to disinvestment), which reduces production possibilities in the US. It's the flip side of the way US shocks affect the rest of the world, but the net effect is similar (though the domestic conditions which can magnify or mitigate it are different from a demand-driven shock.)
- JumpCrisscross 9y ago
  > foreign shocks dry up the flow of capital into the US from abroad In 2015, foreign direct investment into the United States was around half a billion (EDIT: trillion) dollars [1]. Between 2003 and 2014, inward foreign portfolio investment trended around $1 trillion a year [2]. Losing a significant fraction of this would hurt, but it's well within the capacity of the economy, with monetary support, to absorb. The American economy just isn't very dependent on foreign capital. Like apple pie, we prefer our problems home made. [1] https://www.bea.gov/scb/pdf/2017/08-August/0817-new-foreign-direct-investment-in-the-united-states.pdf https://www.bea.gov/scb/pdf/2017/08-August/0817-new-foreign-... [2] https://www.federalreserve.gov/econresdata/notes/feds-notes/2016/international-portfolio-investment-holdings-of-long-term-securities-in-the-enhanced-financial-accounts-20160805.html https://www.federalreserve.gov/econresdata/notes/feds-notes/...

cm2187 9y ago

And even in the 2008 crisis, the chinese economic engine was largely boosted by the money printed in china and the ensuing local credit boom (exports have otherwise collapsed which would have hit them hard). I don't think this trick is repeatable in the short term.

subterfudge44 9y ago

Falling birth-rates of middle-class/upper middle-class in USA coupled with strong government hatred for Asian immigrants is likely to result into serious economic issues for USA in next 10-15 years. As the society fails to generate highly productive people all that debt is going to become a problem.

perseusprime11 9y ago

I think Africa is a great opportunity and we are not scratching the surface. Imagine the world dynamics if 100% of Africa is highly educated.

mythrwy 9y ago
There are lots of great opportunities in the world but in many cases the block to realization is local culture and behaviors. Violence, corruption, tribalism, cultural bigotry, religious zealotry.... Eduction is only a small part of the answer and hard to implement with the above.
peoplewindow 9y ago
People have been trying to turn Africa into a great opportunity for far longer than I've been alive. It never works. There's something more fundamental there that's causing problems than lack of education. That said, I believe the most important stats are moving in the right direction there.
- wavefunction 9y ago
  >There's something more fundamental there that's causing problems Exterior interests in the natural resources of Africa and interior factions willing to undertake any inhumanity if it means personal enrichment, which suits those exterior interests just fine.
- namlem 9y ago
  African economies have been doing better than ever. A number of countries in Africa are experiencing high growth rates.
- kamaal 9y ago
  >>There's something more fundamental there that's causing problems than lack of education. Its called average quality of 'human resources' and a phenomenon resulting from it called 'human capital'. The former is a long drawn phenomenon that takes several decades, may be even a >100 year effort to make it happen. That involves of course investing in at the level of the whole nation a lot of effort to build a peaceful society and a political framework that helps you run education and general reforms, to build a nation of people with chops to be at the top of any human endeavor. Human capital is a resulting phenomenon that emerges from such a inertia. The US is the peak of holding the largest amount of human capital. Human capital is the greatest of all natural resources you can have. No natural resource comes close to the value human resources are.

mos8 9y ago

> I do feel we should demand better long term governance from politicians Do let us also know what we should demand from you.

seem_2211 9y ago

I think you've got a really underrated point about the farm population. We've generated enormous wealth and an amazing quality of life by specializing our skills and the global economy to a massive degree. But we've also got a system that leaves skilled workers vulnerable if they are "no longer required." Reading books before say 1950 and it's incredible to see the diversity of skills that individuals had. Now we're in a hyper-optimized economy where we get a handyman to do basic home maintenance tasks, or we get our oil changed by the dealership, rather than doing it by ourselves. And from an economic perspective, it makes sense - especially if you are able to earn a lot of $$ per hour. But it also makes us a lot more fragile. We've ruined our waistlines with our diets, we're wrecking our mental health and concentration skills with our social media / internet usage, and the average person has disastrous finances. I don't know how we fix this, but I often think about how I can protect myself and my standard of living if things get worse. I think we all should do this, and we should proactively do things to ensure that we've got some level of individual buffer for when things go bad.

jogjayr 9y ago
Compared to the 1950s it's also far easier for the average individual to learn how to do basic home maintenance, change their own oil or cut their own hair. It's not all doom-and-gloom.
- FooHentai 9y ago
  >Compared to the 1950s it's also far easier for the average individual to learn how to do basic home maintenance, change their own oil or cut their own hair. With apologies for flipping back around to the doom and gloom, the picture for all three examples there is more complex. I get that your core point was the availability of information via the Internet, but in opposition to that the subjects at hand have generally become more complicated in themselves. This was illustrated to me recently when I picked up an old binder publication 'home car repair and customization' from a garage sale. It was from the sixties, and what was most interesting about the content was just how much more aspects of a car's maintenance and customization could be performed by a home handiman. Drastically more than is possible on modern cars. Paint jobs, upholstering repair/replacement, trim fabrication, structural repairs. All of them were in there and could be tackled with a relatively low density of information. About 75% of the whole publication was useless, at a fundamental level, if applied to modern vehicles. Now, the reasons for that are varied and some of them are not net negatives. The reason most can't work on structural components of their cars today is at least in part due to safety improvements, for example.