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The Crash of Sept 2008--One Year Later

Original post made by stephen levy, University South, on Sep 18, 2009

This is the one-year anniversary of the Lehman Brothers bankruptcy, the collapse of the stock market, considerable anxiety throughout the country and the beginning of a major federal government effort to prevent another Great Depression.

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Posted by stephen levy
a resident of University South
on Sep 20, 2009 at 12:52 pm

stephen levy is a registered user.

Friday's California job data were dismal and hopeful--a tale of two stories. California's unemployment rate reached 12.2% while job losses fell to the lowest level this year.

It is clear why residents are skeptical when economists say the recession is ending. For most residents the only reasonable measures of the economy are job growth and income growth.

Job levels are still declining although the rate of decline has slowed considerably. The decline in job loss and the slowing number of new unemployment claims are part of the evidence that economists of all political thinking use to say that the recession IS ending.

Still, any substantial job growth is at least six months away and thus the two stories of "still bad now, but going in the right direction" coexist.

And I still think it is remarkable that one year later we are talking about how soon and strong the recovery will be, not whether the nation and world are edging toward another Great Depression.

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Posted by Paul Losch
a resident of Palo Alto
on Sep 22, 2009 at 4:29 pm

Paul Losch is a registered user.

There seems to be a trend that has gone on for 20 or more years. When the US economy "recovers," quality jobs do not accompany the recovery.

I honestly do not know what to make of this. It is apparent the work that was done in the States now is done elsewhere, be it tech support in Mumbai or production of consumer products outside of Shanghai. Such jobs will not come back.

I have a potential customer who wants to know if I can make things in the US, and the answer is "no." I can finish them here, but the industry of which my company is a part has no production facilities any more in America. It is a dis-connect with this prospect, as we both are small companies and cannot revitalize something that can be made much less cheaply offshore.

So this whole notion that things are getting back to normal has an eerie quality to me. I am glad, as Steven points out, that the bleeding was stanched, things could have been much much worse.

But if I were to draw a graph, it would show a downward trend, with the crisis of last year being a huge downward spike, and the efforts by both the Bush and Obama folks, along with the Fed, and major countries on which there is an interdepence, creating an upward spike, but the longer term trend line is still heading down.

We really have to figure this out. And many of the polemics of late are so unhelpful.

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