Different opinions from a number of sources.
I happened across this editorial today. He
definitely is not a member or lurker here.
Thought you might find this original and somewhat misguided.
Michael
For fair use education/research purposes.
The link:
http://www.buffalonews.com/248/story/398549.html
The article:
It’s not a depression
Robert Samuelson - Washington Post Writers Group
Updated: 07/24/08 6:36 AM
WASHINGTON — The specter of depression stalks America. You hear the word repeatedly. Are we in a depression? If not, are we headed for one? The answer to the first is “no”; and the answer to the second is “almost certainly not.” The use of “depression” to describe the economy is a case of rhetorical overkill that speaks volumes about today’s widespread pessimism and anxiety. A short history lesson shows why.
The Great Depression of the 1930s — the last time the term rightly applied — was industrial capitalism’s worst calamity. U. S. unemployment peaked at 25 percent in 1933; it averaged 18 percent for the decade. From 1929 to 1933, 40 percent of U. S. banks failed. People lost deposits; businesses and consumers lost access to credit. Over the same period, wholesale prices dropped a third, driving farmers and firms into bankruptcy. Farm foreclosures, shantytowns (called “Hoovervilles,” after the president) and bread lines followed.
This was a social, as well as an economic, breakdown. Our present situation bears no resemblance to this. In June, unemployment was 5.5 percent, slightly below the average since 1960 of 5.8 percent. It’s true that banks and investment banks have suffered large losses. But on the whole, the banking system seems fairly strong. Although profits in the first quarter of 2008 were down 46 percent from 2007, they totaled $19 billion even after $37 billion set aside for loan loss reserves. Overall corporate profits are still running at a near-record annual rate of $1.5 trillion.
The paradoxical thing about today’s economy is its strength. No kidding. Consider all the hand grenades lobbed at it. Higher oil prices. The housing implosion. Large layoffs in affected industries: autos, airlines, construction, mortgage banking. The “credit squeeze” triggered by losses on “subprime” mortgages. Despite all that, the economy hasn’t collapsed. It’s merely weakened. Output in the first quarter of 2008 was actually 2.5 percent higher than a year earlier.
To be sure, there are parallels with the Great Depression. People fear what they don’t understand or expect. In the early 1930s, no one really knew why the economy had deteriorated so rapidly. Similarly, much of today’s bad news was generally unpredicted: the higher oil prices; the losses on subprime mortgages; the collateral damage to financial markets; the sharp run-up of food prices.
People fear what’s next. They worry whether complex financial markets and a globalized economy are unstable. These are legitimate anxieties. Economist Nouriel Roubini of New York University believes additional losses at banks and investment banks are being disguised by lax accounting practices. If so, things might get worse.
Still, parallels are limited. With hindsight, economic historians ascribe the Great Depression to a passive Federal Reserve, which didn’t stop bank panics and allowed a dramatic drop in the money supply to worsen deflation. Today, no one can accuse Ben Bernanke’s Fed of being passive. It has sharply cut interest rates and, with the Treasury Department, performed repeated acts of artificial respiration on financial markets (rescuing Bear Stearns and, recently, Fannie Mae and Freddie Mac). Indeed, some observers — including me — wonder whether the Fed’s aggressive policies to avoid an economic downturn might unwisely sanction higher inflation.
We are relearning an old lesson: The business cycle isn’t dead. Prosperity’s pleasures breed complacency and inspire mistakes that, in time, boomerang on financial markets, job creation and production. Just as expansions ultimately tend to self-destruct, so downswings tend to generate self-correcting forces. People pay down debts; pent-up demand develops; surviving companies expand. The Great Depression was an exception. The present economy would have to get much, much, much worse before it warranted the same appraisal.
OldMan 
, that I feel confused as to whether to believe "this is it" this time for real or just another false alarm. I just don't know anymore. 
