12th
OCT
Economic Cycles
Filed under Grown Up Stuff, Politics
I heard an interview with David Rothkopf about his article in the Washington Post, and he talked about how there is somewhat of a cycle to economic policy. That’s started me thinking about economic policy, and where we are going to go in the next few years.
The last time the US was in this bad of a financial situaion is when Reaganomics came in and turned the economy around. Reduced government spending and reduced government regulation were probably the two major initiatives of Reaganomics.
Before the early 1980s, the last major economic situation was the Great Depression, and it was FDR’s New Deal. A program highlighted by government programs like Social Security, TVA and Timberline Lodge, among other things.
So in the 1920s the economy tanks, and government regulation and social programs are credited with reviving the US (and world) economy. In the 1970s the economy tanks again, and the government de-regulates previously set regulations, and the economy is revived.
Once again we find ourselves in a failing world economy, that has been corrupted by corporate greed in the financial markets. I think we’ve probably hit the turning point in the cycle, and are about to head into a period of increased government regulation and social programs.
If history shows us anything is that governments come and go. The Roman Empire was going to last forever, but then it didn’t. I don’t want to sound like the world governments are going to collapse, because I don’t expect that to happen in my lifetime. I do think we are going to see some major shifts on par with the New Deal, though.
Tags: economy
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October 12, 2008 -
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The interesting thing about the New Deal is that most historians believe it did help some, but that we didn’t really fully recover from the Great Depression until WWII, when many jobs were created and the economy started focusing on the war.
Reply to this commentI don’t disagree with that assessment of the recover from the Great Depression. And anecdotally, I would say that is very true. I guess my point was that when the US goes through a major economic downturn the pendulum of economic policy tends to swing to the opposite end of the spectrum. I think we are all but guaranteed to see an increase in regulation in the financial sector.
Free market economics are good for the customer, up until the hyper-greed of Corporate America takes over, and companies stop following their guidelines, and start making stupid (read: highly risky) financial decisions, and the customer gets left holding the bomb.
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