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Friday, December 11, 2009

Thoughts on the Recession

From the standpoint of production, the low point was right near the beginning of 2009, as illustrated by the above graphs.   (Click on them to enlarge.)  So production has been generally increasing during 2009, but total production is well below pre-recession values.   This of course means that U.S. industry is working well below capacity, and of course this means that large numbers of people are not working at all.

One way to correct that would be to share the work, i.e., to have large numbers of people working part time, or to simply reduce the typical work week to something well below 40 hours.   This would also correspond with a transition to a sustainable economy, rather than a growth economy.   Of course I am strongly in favor of such a transition, but at present this represents a minority viewpoint, and a very small minority at that.

What is actually going to happen is a slow return to excess production so that Americans can have lots of junk that they don't need and most people will again work 40 hours or more.   But that is not sustainable, so there will be another recession, likely worse than this one, and I would guess this will happen about 2014, where it will coincide with large numbers of baby boomers reducing their consumption levels.

That recession could be postponed for many years if green industries boom in a big way.


  1. Mitchell, I agree... writes similar. Another point made is that if Europe worked as many hours as we did, their carbon footprint would be like ours, huge.
    Remember that movie "Affluenza" on PBS? Or another favorite is "The End of Surburbia".

    ~ Karin
    Donate to PPA and Adult Literacy

  2. Mitchell, have you had a chance to review ?
    I've often wondered about the persistent 40hr work week after I read about the Kellogg's 6 hour day instituted in the 30's and lasting into the 80's.
    Seems like a practical and sustainable solution. How is it that we've gained so much in productivity over the years and yet have to increasingly work more and more just to stay in place? And where is my robot maid?!!?!?

  3. Limits on the freedom of individuals to work or of employers to set work hours would be dictated by whom? Why would I trust a government policy/bureaucrat to limit the hours I or my company can work? I need more hours to pay for taxes, health care, insurance, household expenses, etc. Should I be told that I need to cut back to some arbitary level of 'consumption'? Then, of course, there would be an enforcement clause that would punish me for being too economically productive. Freedom, folks. It doesn't mean freedom for me to do what you think is best for society and so force me to do. 300 million individuals making individual decisions is going to produce a variety of lifestyles, some of which you will approve of, some of which you won't. Tough. Are we to choose instead to be dictated to by a handful of politicians making these rules? Oh, that's right, they're politicians and only want the best for us, the 'little people' who need their guidance (enforced by the power of the state).

  4. It would be best if a reduced work week came about as a result of the American people deciding to enjoy life more and work less. No compulsion by the government would be required in that case. However, our current life style is not sustainable. If we don't change it voluntarily, and if the politicians don't compel changes, then we are headed for a very unpleasant collapse. For a serious treatment of this issue I recommend the 30 year update to Limits to Growth, published in 2004. This version is easy for a lay person to understand, and has data through 2000.

  5. Hi Mitch,
    Here's a link you may enjoy about Urban Sprawl:
    Knowing how such environmental factors will blend with the economics, politics, etc., of the day is a stretch for me, but clearly we have to be far more careful how we proceed.

  6. I have always thought the 'US STANDARD' of a 40hour/5day work week is too long. When I was single I only had Saturday to clean the apartment, do the major shopping, get a hair cut, see the doctor, or dentist, get the car serviced,go on a date or hang with friends. Do to the 'Blue Laws' in Georgia at the time nothing was open on Sunday and I did go to church at the time.

    After I got married I had to work more than 50+ hours a week on adverage at my job. The word at work was "If you work only 40 hours a week you probally wouldn't be around for very long".

    I made the big bucks and it felt good to see that big check, but everything cost more: taxes, eating out, prepared food, auto repairs, everything. My wife also worked so we could make ends meet. I think the reason everything cost so much in the Washington Dc. area was because there where so many two income families making more hours to make and spend more money. Supply and demand in action.

    And, look at the tax-payers expense when someone is layed-off.

    I am now retired at less than half my previous income and I love it. I would take a 20hour a week job if the work interested me. A little extra income would be nice to help support my grand kids (my son-in-law was layed-off for 5 months last year), but other than that who needs to be greedy.


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