Re: 1929 deja vu

From: Michael S. Lorrey (
Date: Thu Apr 27 2000 - 09:04:57 MDT

John Clark wrote:

> Michael S. Lorrey <> Wrote:
> > and prices were far below profitable levels for many if not most farmers
> >(i.e. production exceeded demand).
> That's just natures way of telling farmers that you're making too much of something,
> if you ignore natures advice you go broke, as well you should.

Sure, thats a given. Then what happens?

> >And how quickly do you think it would take for them [oil workers] to go into another
> >line of work?
> I don't know. Perhaps it could happen quickly, or perhaps it would take a long time to teach
> them how to make Mr. Fusion machines, if so the fusion industry would be handicapped by
> a labor shortage and the demise of the oil business would be delayed.

You are a) assuming Mr. Fusion Inc would want to hire union workers, and b) need to hire anywhere
near as many people to produce machines that produce the same power demands as the former energy
industry. If it takes a while for all this to happen, then the excess workers can find other lines of
work in relative order. If it happens fast, the economy can't take up the slack that fast, which has
been my central point. When industries are made obsolete in less time than it takes to train a person
for a new career, you will have the makings of a severe recession, if not a depression.

> >Take a look at Russia right now. Its been 10 years since their defense industry
> >collapsed (about 50% of their entire economy)
> From an economic viewpoint defense is a drain not a fundamental source of wealth,
> it's like paying millions of people to build pyramids or dig holes and then fill them up again.

>From an economic viewpoint, defense spending is an excellent incubator for research and development.
Perhaps R&D is now faster here in the US with the stock markets financing R&D now, but the USSR was
certainly getting more technological infrastructure developed before 1990 than in the few years

> >Any new industry is not going to be burdened, and will not want to be burdened by
> >unionized employees.
> Maybe, but most "new economy" companies are not unionized and their employees
> don't seem to be suffering much. But I don't want to talk about unions, it's just too dull.
> >They will automate as much of their manufacturing as possible.
> If you're saying that eventually machines will be able to do everything better than
> human beings then I agree, but is that really your point, we were after all talking about
> 1929.

In the 20's, farms were mortgaging their farms based on relatively high prices due to large exports
of grain, and they were using the money to buy tractors, harvesters, chemical fertilizers, irrigation
systems, etc. As a result, farm production went up. When grain shipments to europe got cut off, and
interest rates rose, food was left rotting on the docks and in the fields, prices collapsed, and
farmers could not recover their investment. The automation of farms in the 20's is analogous to
automation of manufacturing today.

> > Would you have invested in CISCO telephone wire routers if you knew that
> >another technology was 12 months down the road that would give you 100x
> >the capability for the exact same price?
> In the real world the company is still managing to find plenty of customers, I grant you that the
> technology isn't improving by a factor of a hundred every year, the amount of information
> CISCO can send down a line is only doubling every 9 months but the end is not in sight.

Sure but answer my point. If such a situation occured, and CISCO couldn't answer with similar
technology at the same price, their stock would tank, right?

> >I noticed you deleted my explaination for why they'd be screwed no matter how much
> >they wanted to and were capable of building an aircar.
> It is my habit to delete as much irrelevant quoted material as I possibly can, unlike certain
> people I could name.

Ouch John.... been taking lessons from Lee I see.

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