Should we start calling this economic situation a depression?

Big questions, and they'll take some thinking about.

First, in times of hardship, the appeal of the hard-right is always greatest and they are a bigger threat. I don't buy into the scenario that is being drawn here, but the threat is there.

Second, what is "Europe" in this regard? I can see a re-trenching of a smaller Europe and, in particular, a Franco-German alliance. The UK has remained outside the Euro adventure anyway.

Could we be in for worse to come? Undoubtedly, we could. It isn't certain, though.

Who are "we"? All of us. If Americans think that this something happening "over there", forget it. We are interdependent these days. Arguably, this is happening as the result of poor regulation in the USA financial services sector. We rely on eachother for markets and our financial systems are tightly interwoven.

I have no crystal ball. However, I do see some more focus on national interests (understandably) and less appetite for shared risk in broader coalitions. There are some strong economies in Europe and their citizens won't take well to their own strength being undermined by the weaker economies.

While we still have even weak growth, we have hope. However, that growth is fragile, debt is still an issue and there are still bubbles to burst (derivatives, anyone?).

It's a concern, for sure. I wouldn't predict a rise of new Nazis just yet, unless it is in Eastern Europe .. and I don't have enough of a handle on the politics there to comment sensibly.

 

it seems to me that there's been continuous crisis since 2008 when the derivatives fiasco burst on the scene, followed by 3 years of sustained ideological and political paralysis that's affected the whole of the neo-liberal set. in the united states, as a function of the intellectual monocropping of the past decades, this does not exactly surprise--but it's a bit more surprising in europe--though when you think about it, much of the e.u. is and remains neo-liberal and the institutions---like the imf---that are being called upon to perform a function kinda magically like what it was set up to do under bretton woods except without the coherent legal and other institutional frameworks....

the problem is redolent with historical echoes, but it's obviously not clear if they'll be more than echoes since, like it or not, we live in an open-ended world simply because we're in the present and the past never really repeats even if people tell you the opposite. the echoes follow from the fact of paralysis in conventional democratic institutions and ideology in the context of a worsening crisis....the possibility exists that organizations with predelections for states of emergency could try or try to grab power and that assent could be given to it (as we've seen in the states, even in soft form, assent can be manufactured for truly insane objectives--iraq anyone?----and around entirely dysfuctional political ideologies--washington consensus, trickle-down, free-market neo-liberal cowboy capitalism for example)

and that is an alarming prospect. i think in the states, at least, the right has committed suicide politically and is not in the position to mobilize broadly, in significant measure because they are locked inside the same set of sentences that created this mess in the first place, so they cannot plausibly be taken as outside of it, so they cannot seriously present themselves as riding in to the rescue. far right parties in europe may be another matter, but at this point--as the edito suggests---it's not more than a "may be"....

it is an unnerving situation, however.

i'm concerned about the eu in the shorter run because it's in a fragile state and i frankly dont have much use for the centre-right nitwits that are running the show in either france or germany. they've made a mess of things to now with their unwillingness to face down the banking system. but we'll see.

at work. bloody job, getting in the way of my leisure soap-boxing...

 

It isn't anywhere close to a depression. When half the people can't afford gas for their cars that they are selling for 20% of their current value. When people are starving and only eating in soup kitchens. When companies are going out of business because there are no customers.

There were still crowds on black Friday, 91.4% of people are working (although I still and have said in the past that this unemployment calculation is wrong), and the dollar still buys stuff. Farmers had a good year last year, even though I can't figure that out. The weather was horrible (floods and droughts, late starts to plant, and storms)

And the stock market is still at 12,000.

I'm not saying things couldn't be better. But to compare now to the fake and artificial bubble caused by government and financial institution debt...

But, I don't know enough about European politics to discuss that part of the article.

 

It weakens the term if we even consider this a depression.

http://www.boston.com/bostonglobe/ideas/articles/2008/11/16/depression_2009_what_would_it_look_like/

 

You need to define a depression. Is it the prolonged nature or the depth of the economic woes? This one is not horrible by historic standards (and I'm not by that minimizing how harrowing it is for those who have lost jobs, homes, savings, etc. - I'm just noting that there have been much worse and more widespread downturns in US history). It is, however, very long-lived. I'm concerned we might be at a new equilibrium that could last indefinitely, unless there is a shock to the system that will wake it from the doldrums.

 

BG, I think I'd need to do some research to get you numbers, but my recollection is that there was a depression in 1837-39 or so (which cost Martin Van Buren his presidency), and another one in the late 1870s that never completely went away until around (I think) 1894 or so. Those are real depressions, obviously, both deep and prolonged. My point about the current downturn is that it wasn't as deep as those; deeper than most of the other post-WW2 downturns but more prolonged. It's a depression only by comparison to, say, the downturn in '91-92 or '00-01.