2009-05-23nakedcapitalism.com

"Recent data suggest that the rate of economic contraction in the global economy is slowing down and we are closer than six months ago to the trough of the recent severe global recession. But while the rate of economic contraction is now lower than the free fall and near-depression experienced by many economies in Q4 of 2008 and Q1 of 2009 the recent optimism that “green shoots” of recovery will lead to the recession to bottom out by the middle of this year and that recovery to potential growth will rapidly occur in 2010 appears to be grossly misplaced."



Comments:

tvsterling at 08:54 2009-05-24 said:
I beg to differ on one point raised. The global economy is not naturally boom-bust in nature. The controls put in place during The Great Depression were crafted out of hard experience to tame the boom-bust cycles. They were not perfect but they made a repeat panic MUCH less likely. The foolish & greedy financial sector grew impatient with the pace of steady, reasonable & sustainable growth. They used their power to repeal the safeguards & the rest is history. The global economy TENDS to be cyclical but with wise & prudent controls cycles do not degenerate into boom-bust roller coaster rides. Even now the same greedy faction (a mere 5% of Americans) are trying desperately to preserve their undemocratic power base & thwart a return to sound fiscal policy. I don't know about the fake recovery; it seems quite plausible but not inevitable IF we return to proper controls on the financial sector & NOT FORGET this second lesson about what happens when greed not reason rules our lives & economy. Proper controls mean AT LEAST a return to ALL of the Great Depression reforms AND STICKING WITH THEM. In the present complex & interconnected world total free enterprise is no longer possible. The decline of the middle cla$$ over the past 35 years coincides EXACTLY with the demonization of the unions & the accompanying dis empowerment of all American workers. Don't even get me started on the use of Free Trade politics to complete the destruction of the middle cla$$. Permalink

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