PuroFreak:

I hate to change the subj here, but I was reading a news story and this conversation popped into my mind... the line

"At the other end of the scale, you could look at a country like Japan, where there's an almost pathological work ethic, and their economy's been in the crapper for, what, nearly 10 years now?"

That line came to mind when I read :

TOKYO — Japan's economy slid into a recession for the first time since 2001, the government said Monday, as companies sharply cut back on spending in the third quarter amid the unfolding global financial crisis.

The world's second-largest economy contracted at an annual pace of 0.4 percent in the July-September period after a declining an annualized 3.7 percent in the second quarter. That means Japan, along with the 15-nation euro-zone, is now technically in a recession, defined as two straight quarters of contraction.

That hardly sounds like and economy that has been in the crapper for the past 10 years... First recession since 2001 and they are the 2nd largest economy in the world... Not bad for a little island we nuked the living *** out of! haha

kuzi16:

true. but every free market economy, nay, EVERY economy has its ups and downs. The free market system can correct itself. It does not need a government agency to correct it.

kuzi16:

and just by the way goods/services work nobody nor any government can correct an economy. only the people can do that. If people dont wanna buy stuff then they dont wanna buy stuff. An outside entity holding up a company is just tossing money into the money hole. it creates artificial supply, demand, or an artificially high or low price. All of these things can do more harm than good.

urbino:

kuzi16:

true. but every free market economy, nay, EVERY economy has its ups and downs. The free market system can correct itself. It does not need a government agency to correct it.

I don't think you'll find many histories of the Great Depression, written by professional economists, that agree with that statement. The problem presented by the GD was precisely what was previously thought to not be possible in a market economy: a persistent equilibrium at high unemployment.

urbino:

kuzi16:

and just by the way goods/services work nobody nor any government can correct an economy.

I'm not sure what that first sentence says.

Amazingly, doing nothing often seems to be the correct response. The Depressions of 1907 and 1920 were both over within a year, even though the Federal government did virtually nothing in response.

However, as economist Arnold Kling explains while reviewing Randall E. Parker's Reflections on the Great Depression, a collection of interviews of economists who lived through the Great Depression:
A number of myths that are popular in conventional histories of the Depression are punctured in Parker's book. For example, the Wikipedia echoes many textbooks in saying, "A fundamental misdistribution of purchasing power, the greatly unequal distribution of wealth throughout the 1920s, was a factor contributing to the depression." None of the economists interviewed by Parker cites this so-called causal factor.

kuzi16:

not that i dont believe you but would you mind linking me on that? again, not so much because of proof but because i wanna read the entire article.

thanks for the info.

Luko:

Just keep in mind if you do, you're pissing off a dude who shaves with a sword.

rusirius:

kuzi16:

not that i dont believe you but would you mind linking me on that? again, not so much because of proof but because i wanna read the entire article.

thanks for the info.

It's from an AP article... http://finance.yahoo.com/news/Japan-slides-into-recession-apf-13588804.html

Luko:

Just keep in mind if you do, you're pissing off a dude who shaves with a sword.

kuzi16:

the manner that goods are traded; how the markets are; the existence of goods and services have a nature. that nature is to find a price that people are willing to pay for them. the government cant set a price on gold because that will great a false high price or false low price. a government is an ineffective way to control the economy.

kuzi16:

it was an artificial equilibrium. the government was "holding up" the country via social programs.

kuzi16:

the great depression lasted longer in the US while in other countries it didnt last as long. part of the reason this happened is because other countries cut taxes and the US raised them to "help the little guy"
we got out of the great depression because people went back to work to support the war machine.

urbino:

I'm not sure why people seem to think WWII wasn't a massive gov't spending program that interfered in a huge way with all kinds of markets.