Re: 1929 deja vu

From: Michael S. Lorrey (
Date: Fri Apr 28 2000 - 10:04:44 MDT wrote:

> In a message dated 4/28/00 5:33:05 AM Pacific Daylight Time,
> writes:
> << When industries are heavily invested in current technologies to increase
> production, and market demand suddenly drops by a large margin, you will
> wind up with many bankrupt companies (whose market value has evaporated)
> and many displaced employees. The high enemployment and the loss of
> capital value both can cause severe economic turmoil if that industry is
> a large enough sector of the economy.
> >>
> Michael,
> Your point is well made. I don't want to pull a "gotcha" on you but
> normally that doesn't happen. Henry Ford made his first auto around 1905 and
> as late as 1945 I saw horses being used for everyday transportation of goods.
> By that time they were used infrequently but it took that long to phase them
> out.
> I am trying to come up with a massive change in a major industry and the
> closest I can come is the switch from vinyl records to CDs. However that
> seemed to take five or ten years and it doesn't qualify as a major industry
> in my mind.

Most major disruptions where markets are drastically altered up to this point
have typically been due to government action, like the ending of grain exports,
the imposition of the luxury tax on boats, the firing of all air controllers,
Clinton's ending of logging on federal land in the pacific northwest.

These are all examples that only impact a few sectors of the economy, but when an
area is very dependent on one sector, it can be devastating. As anyone in Oregon
what the logging bans were like on the economy of Oregon. The logging ban was
essentially a deal cut between Clinton's election campaign and Weyerhauser as a
scheme to make Clinton look like he cared about the environment, while
Weyerhauser, the largest private landowner in the Northwest, was able to get the
government to put all of its independent competitors out of business. Many towns
had 50% unemployment or higher as a result. It took a few years for many of those
people to find new lines of work, and many are still unemployed.

Any disruptions caused by new technologies making old industries obsolete, such
as will be caused by portable fusion, nanotech, etc. will dwarf those described

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