The Millennium Recession of 1998-2001
Shelton Garner
in the US started sometime this week. It's due, of course, to the
Asian economic crisis, but it's the mentality of the national media
that's finally taken a turn for the worse.
Although USAToday has been trying to single-handly cause a recession
by itself with all of its nervus-nelly articles about how The End was
near for the last year or so, it's not been until now that it really
looks like we're experiencing the Quiet Before The Storm.
I guess it had to end sometime, but when the next recession starts to
actually begin in any quantitative form late this year, it's really
going to hurt since we've gone so long without one. What's worse, with
the Y2K Bug just around the corner, it could be a _long_ recession.
Add to that the costs associated with fixing the Y2K Bug and it ain't
going to be pretty. The only thing that's preventing the recession
from becoming a depression (at least in my view) is fundamental
strength of the US economy (despite the risks associated with the Y2K
Bug) and the birth of the Net economy.
One thing that's going against us is the high probability that someone
like a Forbs or a Buchanan might actually become president in 2000,
since the natives will be restless due to deepening of the recession
after the Y2K Bug strikes. The Republicans will want to everything but
what is necessary to get OUT of a recession once they get total
control of the government. I suppose we'll have to leave it to the
voters in 2002 to send them a message about such things (but I'm
starting to express my own personal fears about stuff here more than
what I know for sure is going to happen.)
On the upside, the Net economy has gotten old enough that it'll likely
prosper at the expense of the old-style economy. And there is a good
chance that by about 2001 we as a nation will be in a much better mood
to spend as we finally _officially_ enter a new millennium. 8-)
lee
L. Shelton Bumgarner -- Keeper of the Great Renaming FAQ
Nattering Nabob of Narcissism * http://www.nottowayez.net/~leebum/
ICQ#: 9393354 * "Given two unrelated technical terms, an Internet
search engine will retrieve only resumes." -- Schachter's Hypothesis
YoYo
>While the stock market is booming right now, I fear the next recession
>in the US started sometime this week. It's due, of course, to the
>Asian economic crisis, but it's the mentality of the national media
And isn't it just like Lee to assume that journalists are the arbiters of
the economy.
>Although USAToday has been trying to single-handly cause a recession
>by itself with all of its nervus-nelly articles about how The End was
>near for the last year or so, it's not been until now that it really
>looks like we're experiencing the Quiet Before The Storm.
Really? Every time I hear actual numbers about the economy, it's growth
up, employment up, inflation down. Doesn't look like much of a storm to
me.
(And who in their right mind would take economic advice from USA Today?)
>I guess it had to end sometime, but when the next recession starts to
>actually begin in any quantitative form late this year, it's really
>going to hurt since we've gone so long without one. What's worse, with
>the Y2K Bug just around the corner, it could be a _long_ recession.
>Add to that the costs associated with fixing the Y2K Bug and it ain't
>going to be pretty. The only thing that's preventing the recession
>from becoming a depression (at least in my view) is fundamental
>strength of the US economy (despite the risks associated with the Y2K
>Bug) and the birth of the Net economy.
First of all: There is no recession. A recession means an economic
contraction - that is, negative growth in GDP. This hasn't happened, and
there's no indication that it's going to any time soon. Yes, we will
probably have a recession at some point, for business cycle reasons if
nothing else, but there's no concrete data that suggest it's anywhere on
the immediate horizon.
>One thing that's going against us is the high probability that someone
>like a Forbs or a Buchanan might actually become president in 2000,
>since the natives will be restless due to deepening of the recession
>after the Y2K Bug strikes. The Republicans will want to everything but
>what is necessary to get OUT of a recession once they get total
>control of the government.
That's absolutely ridiculous. Republicans are very big on tax cuts which
are known to stimulate growth. Republicans are also very big on balanced
budgets, which keep intrest rates down, which means more money in supply
(another stimulant) and lower real prices on big-ticket items (another
*structural* stimulant). Republicans are also very big on deregulation,
which is also a structural stimulant.
Further, I don't think either Forbes or Buchanan stands a real chance of
getting elected, or even nominated. Although splashy, neither has the
backing of the party machine. Trent Lott is obviously trying to position
himself (though I think nominating him would be a huge tactical mistake),
and I suspect Dick Armey will make a run.
In any case, I think you've shown that you know as much about economics as
you do about technology.
--
----YoYo------...@tezcat.com------------and stuff------
"...but Tonto, he was smarter, and one day said, 'Kimosabe -
kiss my ass, I bought a boat, I'm going out to sea.'"
-Lyle Lovett
Shelton Garner
>Shelton Garner <lee_s_b...@yahoo.com> wrote:
>
>>While the stock market is booming right now, I fear the next recession
>>in the US started sometime this week. It's due, of course, to the
>>Asian economic crisis, but it's the mentality of the national media
>
>And isn't it just like Lee to assume that journalists are the arbiters of
>the economy.
What I'm trying to say is this--the mood of a nation plays a great
deal into how much people spend...the primary engine of the US
economy.
Now that it's REALLY obvious that the Asia is starting to hit us in
small, but growing ways, the press is going to attack consumer
convidence with about a bizillian articles about how bad things are
starting to get.
That, in turn, will actually cause the recession (or at least make it
worse) later this year.
>
>>Although USAToday has been trying to single-handly cause a recession
>>by itself with all of its nervus-nelly articles about how The End was
>>near for the last year or so, it's not been until now that it really
>>looks like we're experiencing the Quiet Before The Storm.
>
>Really? Every time I hear actual numbers about the economy, it's growth
>up, employment up, inflation down. Doesn't look like much of a storm to
>me.
Now, yes, but I'm looking downt the road...the influence of Asia is
only just now starting to hurt the West coast.
>
>(And who in their right mind would take economic advice from USA Today?)
It's just one of the media outlets I use to understand what's going on
nation-wide.
>>I guess it had to end sometime, but when the next recession starts to
>>actually begin in any quantitative form late this year, it's really
>>going to hurt since we've gone so long without one. What's worse, with
>>the Y2K Bug just around the corner, it could be a _long_ recession.
>>Add to that the costs associated with fixing the Y2K Bug and it ain't
>>going to be pretty. The only thing that's preventing the recession
>>from becoming a depression (at least in my view) is fundamental
>>strength of the US economy (despite the risks associated with the Y2K
>>Bug) and the birth of the Net economy.
>
>First of all: There is no recession. A recession means an economic
>contraction - that is, negative growth in GDP. This hasn't happened, and
>there's no indication that it's going to any time soon. Yes, we will
>probably have a recession at some point, for business cycle reasons if
>nothing else, but there's no concrete data that suggest it's anywhere on
>the immediate horizon.
I disagree. I belive a recession begins in peoples MINDS first, only
later to show up in any "quantitative way." Yes, things are going
gangbusters now...but Asia is beginning to have enough influence that
people might decide "Hey, maybe I don't need to buy that widget right
now."
And so on.
>>One thing that's going against us is the high probability that someone
>>like a Forbs or a Buchanan might actually become president in 2000,
>>since the natives will be restless due to deepening of the recession
>>after the Y2K Bug strikes. The Republicans will want to everything but
>>what is necessary to get OUT of a recession once they get total
>>control of the government.
>
>That's absolutely ridiculous. Republicans are very big on tax cuts which
>are known to stimulate growth. Republicans are also very big on balanced
>budgets, which keep intrest rates down, which means more money in supply
>(another stimulant) and lower real prices on big-ticket items (another
>*structural* stimulant). Republicans are also very big on deregulation,
>which is also a structural stimulant.
All of those things are true. But they can only go so far. If things
get REALLY bad, you need to "prime the pump" as they say -- the
government needs to spend money. And I'm just afraid a Republican
White House/ Congress won't want to do that.
>Further, I don't think either Forbes or Buchanan stands a real chance of
>getting elected, or even nominated. Although splashy, neither has the
>backing of the party machine. Trent Lott is obviously trying to position
>himself (though I think nominating him would be a huge tactical mistake),
>and I suspect Dick Armey will make a run.
Who is the best orgianized part of the Republican part? The kooks! The
far right, the "flat taxers" the "America Firsters."
All that has to happen is the economy go south and suddenly the kooks
have leaverage to take the White House.
>In any case, I think you've shown that you know as much about economics as
>you do about technology.
Yeah, I guess a company like Sprint would never decide to charge for
bandwidth, huh.
YoYo
>>>While the stock market is booming right now, I fear the next recession
>>>in the US started sometime this week. It's due, of course, to the
>>>Asian economic crisis, but it's the mentality of the national media
>>
>>And isn't it just like Lee to assume that journalists are the arbiters of
>>the economy.
>
>What I'm trying to say is this--the mood of a nation plays a great
>deal into how much people spend...the primary engine of the US
>economy.
Hm. Well, most people I know are ignoring the press in droves.
>That, in turn, will actually cause the recession (or at least make it
>worse) later this year.
People have been saying something like this ever since the last recession
which was - when? - 1983.
>>Really? Every time I hear actual numbers about the economy, it's growth
>>up, employment up, inflation down. Doesn't look like much of a storm to
>>me.
>
>Now, yes, but I'm looking downt the road...the influence of Asia is
>only just now starting to hurt the West coast.
Well, gee, you must have better prognosticating abilities than most
economists. All the indicators are still way up. Construction is booming,
which means that office space and houses will stay cheap, and just about
everything that makes for long-term structural growth is doing well. The
*only* fly in the ointment is Asia, and while that may have some impact on
the West Coast, I think the overall effect is going to be negligable.
This is just like HappyBouncNet. You're fabricating something so you'll
have "the next story".
>>(And who in their right mind would take economic advice from USA Today?)
>
>It's just one of the media outlets I use to understand what's going on
>nation-wide.
And that's why your understanding is so weak.
>>First of all: There is no recession. A recession means an economic
>>contraction - that is, negative growth in GDP. This hasn't happened, and
>>there's no indication that it's going to any time soon. Yes, we will
>>probably have a recession at some point, for business cycle reasons if
>>nothing else, but there's no concrete data that suggest it's anywhere on
>>the immediate horizon.
>
>I disagree. I belive a recession begins in peoples MINDS first, only
>later to show up in any "quantitative way."
You may believe that, but you're wrong. "Recession" is a word that has a
definition. What you've done here is move from the premise that there
*might* be a recession to taking at as given that the recession has
already begun. You've made something out of nothing.
>Yes, things are going
>gangbusters now...but Asia is beginning to have enough influence that
>people might decide "Hey, maybe I don't need to buy that widget right
>now."
Hate to break it to you, but what the Asian thing is going to mean for the
*vast majority* of Americans is cheap imports. American consumers aren't
going delay purchases just because some prices have gone down (With the
exception of people directly employed in the export sector). To the extent
that reduced demand for American products has an effect, it will probably
be to keep inflation down, which is a good thing, because it'll keep the
Fed from raising intrest rates, which will keep everybody confident about
the U.S. economy.
>>That's absolutely ridiculous. Republicans are very big on tax cuts which
>>are known to stimulate growth. Republicans are also very big on balanced
>>budgets, which keep intrest rates down, which means more money in supply
>>(another stimulant) and lower real prices on big-ticket items (another
>>*structural* stimulant). Republicans are also very big on deregulation,
>>which is also a structural stimulant.
>
>All of those things are true. But they can only go so far. If things
>get REALLY bad, you need to "prime the pump" as they say -- the
Where did you get this idea? The idea that you can spend your way out of a
recession has been largely discredited (remember how well it worked during
the Nixon and Carter administrations?) The reason is that defict spending
drives up intrest rates, which tend to serve as a *de facto* tax increase
on enterprises with debt financing (which is basically all of them). You
can stimulate short-term demand with spending, but the system tends to
turn on itself in subsequent periods.
>Who is the best orgianized part of the Republican part? The kooks! The
>far right, the "flat taxers" the "America Firsters."
First off, I wouldn't consier flat tax folks "kooks". It's a good idea
that's gotten twisted into some kind of evil plot by your collegues in
the media. Of course, a national sales tax would be better. Second, you
can recognize the fallacy of your argument by noticing that 1) Buchanan
has yet to get past the New Hampshire primary with any meaningful support,
and 2) Whenever you energize your own fringe, you energize the opposing
fringe as well.
>>In any case, I think you've shown that you know as much about economics as
>>you do about technology.
>
>Yeah, I guess a company like Sprint would never decide to charge for
>bandwidth, huh.
That's one company out of how many?
Tony Finch
entirely dismiss what he says: There are worrying signs in the UK
economy at the moment, reminiscent of the recession 8 years ago, and
there is the prospect not only of y2k, but also of the new European
currency which could cause untold havoc to our funny-speaking
neighbours.
Tony.
--
F.A.N.Finch d...@dotat.at
fa...@demon.net +44-7970-401-426
"Plenty more letters in the alphabet"
YoYo
>Of course, this has been coming for some time and what isn't clear is
>how long it will take to get here, how long it will last, and how deep
>it will go.
This is the crux of the matter. I'm not saying a recession isn't
*possible*, I'm just saying I don't think it's all that likely in the near
term.
My main reason for thinking that has to do with the stock market. It seems
to me that the main reason for the current bull market - which persists in
the face of such blows as the Asian currency crisis - is that the Baby
Boomers, having paid off their debts from the '80's are saving for
retirement and consequently dumping huge amounts of money into the market.
As long as this is happening, capital formation is easy and fast, and
that's a huge stimulus to the economy. And it's a stimulus without the
weakness of debt financing. As long as capital is pouring in like that,
employment should stay strong, and demand should remain fairly constant.
I see two ways this could collapse. In the near term, everyone might
decide that stocks are overvalued. P/E ratios, after all, are at
historically unprecidented levels. If this happens, there'd be a huge wave
of selling/profit taking and all that easy capital could dry up, taking a
lot of jobs with it. The thing is, people have been saying the market's
overvalued for a good long time, and we haven't had a >20% correction in
over ten years. If people were going to get cold feet about P/E ratios,
they've had a long time to do it already. This leads me to believe that
stocks are not actually overvalued, but the benchmarks have actually moved
up. If so, this would be a sign of great structural strength.
In the longer term, when the Baby Boomers actually do start retiring,
we're screwed. New capital dries up, and probably a lot of selling starts.
Fixed incomes mean demand goes way down. Bad news.
But we've got what, 10-15 years before that starts happening. In the
meantime I'm seeing a *lot* of infrastructure development going on, and
that's always a positive sign.
My problem with what Lee was saying is that he seems to be taking it for
granted that a recession is already upon us. This is pure fabrication.
VaporThink, if you will, and very much in line with the kinds of idiocy
he's posted in the past.
Bruce Baugh
> Shelton Garner <lee_s_b...@yahoo.com> wrote:
> >What I'm trying to say is this--the mood of a nation plays a great
> >deal into how much people spend...the primary engine of the US
> >economy.
>
> Hm. Well, most people I know are ignoring the press in droves.
It varies a lot from one community/subculture to another. There was a
time when I was rare among my friends for more or less completely
ignoring the mass media, but with the rise of more channels of access
to direct data and specialized interpretation/commentary, more of them
do the same all the time.
--
Bruce Baugh
bruce...@mindspring.com
http://brucebaugh.home.mindspring.com/ - New sf by
S.M. Stirling, rolegaming, writers' tools