Webmasters Own Reflections On History

The Perfect Storm For An Economics Meltdown
As any who have seen the movie The Perfect Storm knows it was caused by a number of factors which alone are not a problem but when all those events went together you ended up with "The Perfect Storm"

Are we looking at a the perfect storm conditions in economics terms

1. Although the subprime lending problems are mainly US but not only limited to , the amount of paper floating around the worlds financial institutions from US Subprime lending is enough that as the reporting season starts many more finance institutions around the world will be affected , the ripples have started to be felt over the last few months ( Bear Sterns US, Northern Rock UK, French Investment House, Countrywide US, Barclays UK, and a few other smaller ones worldwide.

Now this is before the big reporting season starts and is like the tip of the Iceberg

2. Highest number of mortgage defaults and bankruptcies US and Europe

3. Money markets becoming tighter within lending to each other world wide because many each is unsure of the true value of the others paper securities

4. House prices dropping but more importantly the number of properties on the market far exceeds the number of buyers by largest margin for 50 years , so an even bigger property devaluation has to come.

5. US and UK holding the largest debts in history ( partly through war in Iraq and Afghanistan ) but was also high prior to war

6. Major retailers already priming markets for lower sales projections due to tighter consumer spending

7. Continuing increase in Oil price which will feed through to the prices of everything else

8. Tightening of consumer credit

9. The dollar value continuing to drop


Now each one of these as a single driver of the economy on it's own would cause no more than a minor correction but if during the reporting season one or even two major US financial institutions report much worse figures causing credit to be tightened even further thus causing less money in the system and less consumer spending etc. etc. we could well see the perfect storm causing a major Economics Recession.

I am not a financial guru just study economics and history to base my own views on

steve




History Repeating Itself
One of the interesting things about working on a site about history is the reflection on society at the time some examples below


During the Prohibition years many newspaper articles talked about the rum runners and if you get the chance to read an old newspaper from those times and read the readers letters in the beginning you can see that society as a whole thought cracking down was a good thing in the beginning and as prohibition continued the changes in tone for support of prohibition changed

Another good example is reading readers letters from the time of the Vietnam War in the beginning most advocated what the US was doing due to the concerns over communism taking over in large parts of the world but over time as many good men died and no end could be seen to the war societies views changed and the readers letters from anti war outnumbered the pro war


As they say history has a tendency to repeat itself and so we have seen in the last few years since 911 , In the beginning the overwhelming support from ordinary people over the fight against terrorism was a testament to how strongly people felt but now we are seeing a very similar anti war sentiment not as strong as to the Vietnam war , this is not because of the body bags of soldiers being bought home being seen on nightly news but because a high percentage of the people do not believe the war can be won, and they are concerned for the brave young men and women that have lost their lives and who could lose their lives if the war continues to long




History reflected through advertising
As we are working on This Day In History one of the things that strikes me is how the adds as well as reflecting the obvious changes i.e. prices and engineering and technological improvements etc also reflect some other very important information

Below are just a few that have struck me this week

1 When I was a child my mother would search out any shop that gave Green Stamps with your purchase and when you look at adds from late 50's to early 60's you realise how prominent they were . If a shop or service gave green stamps it would be heavily featured in the Adds

2 Another interesting thing is how cigarettes were advertised Glamorous and at the same time safe ( how did they get away with this when studies were already showing smoking was related to Cancer )

3 The next is much more related to how technology has changed an add for Columbia records uses the words ( works on all talking machines if somebody said talking machine you would just look at them blankly )




One of the great things about working on a site like the people history are the facts that pop up and give such a clear indication of how quickly things can change not in the context of days or weeks but in the course of a couple of decades, an example is listed below that gives an example of transfer of power from corporations to unions

In the early 30's during the great depression years corporations like US Steel implemented pay cuts up to 30% on it's work force and unions like the Teamsters negotiated wages DOWN by up to 40% .

Supply and demand of to few jobs available to those to many people wanting jobs allowed this to happen


Now lets skip forward to the late 50's where the Unions had fantastic powers and were calling strikes for higher wages and better working conditions governments around the western world were forced to use some very heavy tools including taking control of whole sectors of business under government control to keep the economy running an example is taking back control of the railways

Supply and demand of many jobs available to those to people wanting jobs allowed this to happen ( full employment )

Many will say many of these problems are due to Unions but Unions are only a reflection of the power of the people in this case workers

Now lets skip forward to the new millenium if we look further afield we can similar supply and demand with workers changing some of the "third world countries" even today . A corporation decides to outsource it's work to India where labour is cheap and plentifull but over a few short years the supply and demand curve increases labour costs in that country so they find another country


History can be so interesting sometimes to research and attempt to understand