Portion below; whole thing (LA Times via Marxmail) here: http://www.latimes.com/news/nationworld/nation/la-na-losingfaith16-2008jul16,0,1516735.story
A similar pattern of hopes raised and hopes dashed shows up in global trade and retirement investing.
Americans entered the new century convinced that "we had a new economy built on services and information technology that would let us win globally," said Harvard economist Robert Z. Lawrence.
"The whole premise of globalization in the year 2000 was that it worked well for us and the other developed countries but that the developing countries would need help," Lawrence said.
Today, virtually all those optimistic assumptions have been turned on their heads.
"We've seen unprecedented growth in the developing countries, while the developed countries are being led into a slowdown by the United States," Lawrence said.
"We've found out that instead of services and information technology, it's all about oil and other commodities" that are not the nation's strong suit.
Finally, when it comes to investment, especially for retirement, recent years have brought unsettling disappointments as the stock market has failed to regain and maintain the peaks that it reached in 2000.
An investor who put a dollar in a broad market index fund early in this decade not only would have made no money by today but would have lost a little of his initial amount.
That's a far cry from the 1990s, when people told pollsters that they expected to make 15% annual gains indefinitely.
Historians watching the nation's current economic and financial troubles say that just because Americans don't throw up their hands about markets and rush to an opposite pole, such as socialism, it doesn't mean that change isn't underway.
As UC Davis' Rauchway pointed out, the devastating panics and depressions of the late 19th century eventually resulted in the progressive reforms of the early 20th century and, later, the New Deal of the 1930s.
Today, Americans are not ready to throw out markets altogether, said economist Litan, but "what people may be demanding is New Deal lite."
No comments:
Post a Comment