[books] The Post-Catastrophe Economy: Rebuilding After the Great Collapse of 2008Author Eric Janszen – Cheapnikeshoes.co

How Bad Will The Current Recession Get According To Eric Janszen, We Could Be Facing An Unemployment Rate Of Over Percent Half Of All Retail Stores Boarded Up Skeletons Of Unfinished Buildings In Our Cities And Tax Revenues Down By Percent, Leading To Big Cuts In Government Services Meanwhile, Inflation Will Keep Rising As The Fed Is Forced To Devalue The Dollar Because Foreign Countries Won T Lend To Us Any Sounds Grim, But The Good News Is That This Crisis Will Open The Door To A Saner Economic Future If We Recognize The Opportunity To Correct Decades Of Bad Policy America Can Wean Itself From The Debt Financed Growth Of The Past Thirty Years And Restructure To Grow Based On Old Fashioned Savings And Investment Janszen Shows That The Key Is Not Big Government But Deploying Our Unique Capacity For Innovation Through Private Public Partnerships He Calls For A Modern New Deal That Develops Twenty First Century Industries Such As Biotechnology, Alternative Energy, And Nanotechnology And He Shows How Our Financial Markets Can Adapt To Make It Happen This Is An Essential Book For Everyone Who Is Struggling To Understand Our Current Predicament

10 thoughts on “The Post-Catastrophe Economy: Rebuilding After the Great Collapse of 2008

  1. says:

    We really got ourselves into a mess We need to get out of it if we want to be the world s global super power Although the book is a great read in American macroeconomics, it is somewhat technically difficult to read for a novice like me.As a result of increase in global competition and the 70 s stagflation and increase in oil prices, Although this is a great, some of the concepts are way above a lay reader like me.America created the FIRE economy as the answer in which the issuance of credit fueled by foreign creditors became our economic engine over production and savings As a result of Reaganomics, government is now beholden to the forces of the FIRE economy influencing the government to keep the status quo by its lobbyists and campaign funds from its trade organizations.How did we get here Dollar was taken off the gold standard and became the international currency of choice so the international demand for the dollar created an inflation of its value divorced from GDP Because the international markets want the dollar so much, there remains to this day infusion of cheap cash that allows interest rates to be depressed thus allowing easy credit to the American public The American public bought into this economy by advertisers who appeal to the american emotion in order to sell credit For their part, the FIRE economy democratized credit so people who pay back their debt but are at a high risk of not being to pay their debt have to pay high interest rates FIRE economy also pushed for financial deregulation that gives them funds by encouraging American take out loans so they can have interest for those loans And of course, decreasing taxes so Americans can pay interest on their loans instead of save More and companies went into the credit card business since the interest that they had to pay in borrowed funds was lower than the consumers In fact, this is probably how GM and Chrysler lost its money because they went into the financing deal a lot faster In the end, credit risk pollution in which high risk debt was spread throughout the financial system to decrease the risk of the debt that was aloud b c of financial deregulation made the system insolvent when high risk debt could no longer be repaid which currently caused this current Great Recession He warns that we are now in the process of stagflation in our quest for a productive economy and no one can do anything about it especially not the government The features of this new reality are a shift from private debt to government debt in an effort to get the economy going As a result, he foresees a weakening dollar and a stagnant economy due to govt borrowing crowds out private borrowing Since the private sector shrinks in comparison to the public sector, there will be persistent unemployment, flat or falling wages due to increase competition for jobs , and rising commodity and energy prices.Janszen s solution to the problem although I think the change will be gradual is an increase in knowledge industry and innovative entrepreneurs with wide ranging policy prescription such as the creation of the public private infrastructure bank Kerry Hutchinson bill , gear the educational system into creating innovative entrepreneurs, allowing high skilled immigrants who study here to stay here in order to create a workforce in line with the knew economy, lower taxes and insurance burden for start up entrepreneurs Although it would be probably be preferable to do a wholesale change of the economy right now, I do not think politicians as well as the public has the appetite for such drastic measures because the FIRE economy is the American economy right now.FIRE economy was run by cheap oil from the strong dollar led by the dollar becoming the international monetary reserve and ease in oil extraction and cheap credit due to the decrease in interest rates in 80s and financial deregulation of the 90 s.Because of the easy credit American consumerism was fueled by, the only way out of this mess is wholesale bankruptcy He states any attempt to prop up the FIRE economy by the federal government only prolongs the inevitable of decline by shifting the debt from private sector to the public sector Although he does state that TARP was the right move b c it prevented massive deflation, the unfortunate result is increase monetary supply that leads to a weakening of the dollar The weakening of the dollar causes other countries to question the wisdom of the dollar as the international monetary gold standard of choice In the US, he states the weaker dollar leads to stagnant wages and increase of priced due to inflation.Aside from the weakening dollar, he predicts a peak cheap oil phenomenon which makes it less profitable for oil companies to extract oil from the ground given American consumers declining purchasing power During this period, every attempt to expand the US economy will come up to a wall of fixed supply so prices of everything will continue to rise ad nauseum until a recession hits us so prices will decrease again Although there is natural gas and oil in US soil, economics will dictate whether or not it will get extracted because it is expensive to extract it from the ground Because oil companies are not sure whether the American public with its declining purchasing power will buy oil at the price that is needed for American land exploration and production, they will prefer Americans becoming energy efficient so there profits will not be cut Thus, the wholesale adoption of a environmentally friendly policy is really due to economics of scarcity rather than a general concern for the environment He state that government should hasten the transition toward the new economy instead of looking back to the past of the FIRE economy by throwing money and increasing the deficit by propping up the FIRE economy Confounding factors to peak cheap oil phenomenon is dollar devaluation and oil producing nations keeping their oil for themselves instead of exporting it Saudi Arabia in order to keep a unelected govt in power.The only way forward is to include tax cuts and capital gains tax to small business as well as spending on infrastructure cheaper transportation, communication, and energy costs thus, hastening TECI economy by having private public partnership such as the infrastructure bank that Kerry Hutchinson is proposing The bank has to have transparent global access in competition to increase efficiency in its completion and decrease costs Human capital investment is also important to reform our schools in order to have the workforce of the future which includes raising standards, increase access to quality education, and apprenticeship programs Another important aspect of human capital investment is to allow immigrants who come here for higher education to stay in the US thus immigration reform.His main thesis is that energy efficiency is going the industry of the future because economics dictates it due to decrease production of oil and increase international demand He states it can be done by 1 Telecommuting2 Riding public transportation3 LED lighting4 Lighter cars running on diesel hybrid fuel a.Hydrogen fuel cells are less energy dense than diesel fuel thus limited in range and expensive to produce b.Electric cars are limited by its battery capacity which Boston Power, a new company started by a Swedish immigrant, is trying to fix by making battery capacity that is unlimited thus allowing the last bridge that makes electric cars feasible as well as renewable technology to be the main power source5 Building electricity power plants closer to its source to reduce waste as well as a switch to Pebble based nuclear reactor which is a safer, simpler, and efficient form of nuclear energyAlthough it behooves America to get rid of being in the FIRE economy as its primary economic force, unfortunately it would be politically suicide to get rid of it wholesale because promising voters a stagnant economy for a rosier 10 year future down the line Carter tried this tactic in truth telling in his presidency combined with the FIRE economic PAC funding political campaigns make this politically unpalatable The financial oligarchy influences everything from politics to the FED monetary policies What he greatly fears is foreigners having a vested interest in US politics in order to recoup their investment in Treasury Bonds For instance right now, we are really relying on China to keep our heads above water Economic bubbles are driven by 1 Asset price inflation monetary policies2 Noneforcement of security and banking regulation due to FIRE lobbyist with the result over leveraging of not only financial banks but commercial banks and companies as well which in turn threatens the entire system when money cannot be repaid3 Media selling and marketing the bubbleSP macroeconomics and why stocks are a bad bet for investment right now1 We see right now that stocks are not rising and sales are down but companies have all this cash that their sitting on He states that companies have a surplus in cash reserves b c of cost cutting measures which means laying off people Although unemployment is high, he states that per capita income is rising due to the fact companies are paying people they do have to work harder.2 Personal Consumption expenditures are not rising so the economy will not rise either3 Median Duration of Unemployment companies are not hiring so there is no money to consume4 Government spending the only reason why SP prices are rising is that govt is continue its policy of asset price inflationThe volatility in the stock market right now due to economic stagnation makes commodity trading the area in which assets will increase in price lucky for Gabe Further signs that the dollar is in trouble of ceasing to be the defacto global monetary currency is the price of gold rising When money devalues apparently gold price increases The issue with the dollar losing its preeminence as the world international currency it currently enjoys is that with its decline, the US global military hegemony will decline with it because we can no longer borrow foreign currency in dollars He states with the decline of global American hegemony, we might world wide political instability.

  2. says:

    The author provides a great market analysis on the US and his take on the future seems very plausible, but although I m not an economist, whether or not the postcatastrophe economy actually comes into being, I believe it is going to depend on long term political and social trends Politicians will likely continue to manipulate the markets until it can t be done any major crash time then.

  3. says:

    Great book, I recommend reading it with Bailout Nation by Barry Ritholz, as they almost work together Barry s book goes technical about what happened, while this one touches on it, but hits on some very intriguing ideas like what has happened to the media, healthcare, universities and politics itself as as slowly taken over Keep in mind this guy was a venture capitalist who made his fame, very accurately, predicting markets so this is no lefty stuff or calls to socialism, just an honest, realistic look at what has happened and how we can save and strengthen our economy A good, simple, informative read with a pretty positive tone and is solution oriented Something I think we need badly going ahead.

  4. says:

    Great explanations of the 2008 economic crisis as predicted prior and what will ultimately be expected to happen in different scenarios No notable political bias here, which is great.I do think he spends too much time discussing what he thinks things will look like and details of energy that should be used, and what private public partnerships should be formed He makes his forecast almost from a point of certainty, and as that is uncertain it is just too much unnecessary detail While he may have researched energy sources, I don t think he can accurately predict which will be most efficient in each situation.I read this one in audio format.

  5. says:

    Fascinating insights regarding the state of of the economy, what lead to its collapse, and the best ideas I ve heard for fixing it I most liked the lack of partisan rhetoric it s written by an economist venture capitalist, not a politician or pundit The only detractor from enjoying the book are numerous typos throughout I can only assume Janszen was eager to get his book off the press so its predictions could be recognized as predictions and not retrospective commentary.

  6. says:

    Describes the separation between the financial economy and the producer economy or rather how the financial economy came to dominate the total economy Outlines in great detail how the financial economy ultimately failed during the 2005 2010 period and what must be done to fix the problem The problems with the transition are also describes, in parituclar the constrictions from not paying attention to peak oil transportation earlier on.

  7. says:

    He hit it dead on a the cure will become the disease there s only so much money you can print before inflation hitsb you need to create REAL value through technology, energy.c you can t let a financial system ruin a value base economy through greed.