[ExI] "recession is going to end in about 6 weeks"

Brent Neal brentn at freeshell.org
Wed May 6 10:15:31 UTC 2009

On 5 May, 2009, at 23:08, Rafal Smigrodzki wrote:

> On Mon, May 4, 2009 at 1:21 PM, Brent Neal <brentn at freeshell.org>  
> wrote:
>> This represents about 30 seconds of Googling. Unless you think that  
>> the von
>> Mises Institute is too left wing for you, of course. :)
>> http://mises.org/story/2948
> ### Very nice article. How does it relate to the question of when the
> present recession would end?

It doesn't. It relates to your challenge about deflationary pressures  
during recessions. You asked for "proof." I spent 30 seconds Googling  

>> The question at hand is the one being talked about in the GI  
>> thread, though.
>> It is entirely feasible that these are the growing pains towards an  
>> economy
>> that where the wage-income link is weakened, something that the  
>> folks mired
>> in industrial age economics can't wrap their heads around. As we  
>> begin to
>> understand that ideas and memes  will often be more valuable than  
>> stuff,
>> there will inevitably be some rough spots as we transition from an  
>> economy
>> based on atoms, arranged just so and moved from point A to point  
>> B , to an
>> economy based on bits, arranged just so and moved from point A to  
>> point B.
>> (Where they would then be "minted" into the right sort of atoms,  
>> perhaps. Or
>> perhaps not.)
> ### How does that relate to the short-term economic forecast?

Because I think we're seeing what many folks (including Damien) have  
predicted - an economic disruption based on or exacerbated by the fact  
that people don't need more manufactured stuff than they already have  
and in fact are increasingly realizing that they will pay some  
marginal amount for LESS stuff. The short term economic forecast, as  
has been claimed before, is linked to a fall in aggregate demand.  
There are two routes that can be taken based on this - either try to  
prop up the manufacturing sector or to transition to a different type  
of economy.  We're, alas, doing the former, which I intuit will make  
the short term outlook much poorer. But, to economists and pundits  
completely immersed in industrial age economics, it appears to be the  
only option, so they are making a rational choice, in some sense. I  
disagree with that route though - I think that breaking the wage- 
income link more, recognizing that networks of people have an economic  
potential that is synergistically larger than the aggregate economic  
potential of their individual units, and using something like a  
reverse income tax - I prefer to think of it as a dividend, since I  
think it is more accurate - to compensate them for that value created  
will ultimately be the better solution to the current problem.

Its also, I think, a precondition for the Singularity, but that  
requires more explanation.


Brent Neal, Ph.D.
<brentn at freeshell.org>

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