So everyone is aware of our current state of economy, or lack there of rather. We are all searching for answers to when is the bottom going to hit, are we in a depression, is it just a recession, what will happen to the dollar? More importantly, we also asking about our security in our jobs, our homes, and simply the status of our lives. Lets not broach the subject of OctoMom and her affect on economy yet, we'll get to that later. Currently, I am tired, oh so tired, of seeing the governemnt, organizations, and individuals, asking economic historians what to do!
Why is that? Well simply that our society has never, and I mean NEVER, experienced a similar situation. Why? There are so many different problems in today's current economy its hard to even start. First of all, there has never been a housing bubble as what we saw burst. This housing bubble was a main source of income and investment for many individuals and companies out there. When you take away such a large source of funding, entire industries collapse, as you can see. The banks, the home builders, the suppliers, the auto companies, small businesses that service homeowners, and luxury retailers are suffering. Electronics has been hit unbelievably hard, but maybe people have realized that having 5 flat screen tvs is unnecessary. Maybe not. Secondly, we are only now just seeing the extent of the baby boomers and social security, this is unprecendented. Baby boomers are retiring now, and with social security already stretched to the max...those same baby boomers are not leaving their jobs. Which means those like myself, a new graduate, can't find a job. Leaving more and more people out of work and unemployed, or underemployed. Not that I have anything against baby boomers, but as a society we need to understand this. At one point, we told them that they could retire at 60, then when they hit 60, we said no, you have to be 62, now it is 67, they will never be able to retire...So jobs are only open to those that have experience, not education. Besides which companies get perks by having employed the elderly...
So the classic model won't work...DUH..Of course it never did really since there is never 100% employement (meaning that everyone who wants to work is working) And Keynsian theory
doesn't apply either at this point. LR and SR supply and demand aggregates are so skewed at this point, that you can compare them to even the years of the great depression or after WWII. So, please, everyone stop wasting our valuable and hard earned money going to economist to figure out based on past trends where the economy is going. This is new, this is unprecendented, and one day models will be based off of it. Until that day however, we simply need to ride it out and accept that other than assumptions and theorys that are unfounded and have very little be based on, we are on our own.