<<Nobody knows. Nobody ever knows. This is a complaint that could be made during any recession, depression, or moment of economic uncertainty during the past 200 years. And after a period of self-flagellation (and other necessary economic retrenchment) we pick ourselves up and go forward. When? Where? Really, it's a total mystery. But it's not going to stop forever because you don't need to upgrade your computer as often.>>This is why I call this faith-based economics.Perhaps all economics is faith based. The bank that loans money to augment capital is doing so on faith. The large groups borrowing from the banks (and other agencies) are doing so on faith that they remain stable. And every single transaction between willing buyers and sellers have some element of faith (sure there is adequate due diligence, but there is no way to be so diligent that you are absolutely sure nothing can go wrong) that it is a fair deal.I have no doubt there will be innovation, but that doesn't mean it will lead to new and better jobs. History is complex on this: job losses from increased productivity have been mitigated by immigration, migration, high percentages of public employees, shorter work week, and of course wars.There may be doubt if those new jobs will be better, but there is no doubt that they will be different. And "better" is in the eye of the beholder - is sitting in a small cubicle better than working with ones muscles outdoors? Sure it is in some respects, but it is worse in other respects.We have seen a major new innovation over the last 25 years, and we can easily see how it has enabled increased productivity and will continue to do so. But job growth in this country after the dot.com recession (I don't take 9-11 as a real factor, just a brief psychological blow)The actual acts of 9/11/01 were "just a brief psychological blow", however the resultant actions were huge, both socially and economically. Try to remember that we spent about as much, or more, as the current "huge" stimulus package, on the wars that resulted from that "brief psychological blow". If the current stimulus package is to create 3.5 million jobs, wouldn't roughly that same amount of capital potentially have done the same?, despite record profits and officially high growth, was way below par and almost entirely fueled by borrowing and the housing boom/bubble. The Great Depression took WWII and a huge percentage of the population working directly or indirectly for the government to turn around, and building the interstate system after the war. Not only was there then a population boom, but there really was lots of new stuff out there for people to want, even if perhaps not necessary to meet basic needs. My concern is that this time it is different: aging population, productivity gains that affect not just manufacturing and farming, but services. And most of the new "stuff" is replacing old "stuff" to accomplish the same "needs." My mother-in-law just sent us my late father-in-law's 35 mm camera. I have a very good 35 mm camera (actually 2, if you count the one without auto-focus I used when I could see well enough to use it). I don't even know where to get film developed (I'm sure there are still places) and haven't used it for years. I remember trying to explain digital cameras to my late father-in-law, who couldn't understand how anyone would make money (this was before the craze among teens and preens sending self-porno over cell phones). My answer was, and is, once people decide they don't need a hard copy, there will be little money to be made once the camera is bought.I don't understand where you are going with this argument about 35mm cameras. The death of film spawned multiple new, and large, industries, or products (and much better ones than developing pictures with all those nasty chemicals nearby). There are tens of millions of inkjet printers in homes around the world, and those people buy hundreds of millions of those ink cartridges, and buy hundreds of millions of sheets of photo paper. There is even a pretty large hobby/professional scrapbooking industry (a wife of a coworker is really into that hobby) that uses self-printed digital photos as part of it. Plus there is another new industry, all those places that print those small photobooks (seems like every supermarket, drug store, etc does it, plus mail order from lots of places). That's how we print most of our photos - usually 3 photobooks, one for us, one for my parents, and one for my inlaws.The number of people working in financial services in recent years has been staggering—I consider this corporate feather-bedding (people extracting a huge percentage of GDP that does not become working capital).This is perhaps the biggest problem of all. To spend 10% or more of your capital simply to assist in allocating that capital is akin to an additional tax, not only on income, but on the capital itself! And it is a huge tax that is paid even before the capital has been allocated, and before it produces even a single dollar of income.This is the main reason why I am strongly advising my parents to sell their home in NY city as soon as possible. I think NYC will not recover very quickly from the decline of Wall Street, and that, because of its very high "cost structure", which is/was so dependent on large Wall Street compensation packages, it might enter a spiral of decline that could last for a very long time.
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