Project for Philosophical Evaluations of the Economy |
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Looks like a recession is imminent or Schumpeter, yet again.
Q&A between Noah denkt™ and its Alter Ego, first drafted on Jan 22, published on Jan. 25, 2008
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Question from Alter Ego of Noah denkt™ (Q): It looks like your predictions finally come true and a recession in the U.S. is in deed
inevitable now.
Answer from Noah denkt™ (Nd): Yeah, it looks like it.
Q: And don’t you feel vindicated now?
Nd: Somewhat, but not too much.
Q: But hey, you really have reason to celebrate. After all your steadfastness in this is paying off?
Nd: Well, it is nice to know, that the market somewhat comes around to acknowledging the truth. But neither can we celebrate the
fact that a recession might be on the way, nor do we believe that the worst is over yet.
Q: What do you mean?
Nd: Well, as we told you before, the brunt of the correction will not come in this downturn but it will be in one of the recessions after
this one that the real pain will kick in.
Q: So you do not think that the coming recession will be a difficult one?
Nd: No, not at all, because the FED and the government will do anything they can to counter this downtrend. And besides that China
has also not yet come undone. So there is enough reason to believe that this next recession will be relatively easy to bear. (see
Comment below *** (later insert))
Q: But it is the one after that, that is causing you concern, correct?
Nd: Yes, that one, or the one after that.
Q: And why is that?
Nd: Well, as we told you before, and as we are glad to tell you again, this attempt to counter the explosion of a stock market bubble
by dramatically lowering interest rates cannot be the answer to the underlying economic problem. For too much does this reaction
to the existing bubble burst already lay the foundation for the following one, that one could now still hope to thereby avoid the bigger
pain that eventually will come.
Q: And what is this underlying problem that needs to be fixed in order to hope for more sustainable conomy?
Nd: The most important thing that needs to happen is a revision of the simple-minded greed logic that is dominating capitalism
right now. After all, there are still too many people in leading positions who to this day believe that any profit is a good proifit. And so
it really does not come as a surprise that we are running from one fashion bubble to the next.
Q; So, in you opinion, the underlying cause for the ongoing bubble bursts is a superficiality on the part of the capitalistic players?
Nd: That’s right. In fact, we believe, that is due to the near totalitarian nature of our corporate capitalism, that we have these ever
faster finishing boom-bust-circles. And so it is only natural that we cannot limit the distress.
Q: Well, one thing is for sure, Noah denkt™ is certainly not afraid, of using harsh words.
Nd: You are referring to us using the T-word?
Q: Exactly!
Nd: But that’s how it is, isn’t it? Just look at the amount of money that is being managed by hired executives. Don’t you think that the
sheer power of this warrants the expression totalitarianism? After all you can no longer dream of having a career if you do not invest
half your life in creating the packaging which allows you to present yourself as a full-hearted subscriber to the corporate executive
world view.
Q: But, come on, what is wrong with being a hired executive?
Nd: There is nothing with being a hired executive. The problem is only that these hired executives act more and more as if they were
highest expression of capitalism themselves. For that is plainly not true. And so it is only logical that we cannot avoid unnecessary
inflations.
Q: And now you even see capitalism at risk?
Nd: Absolutely. After all, if this capitalism is to survive than it desperately needs the geniality of individual entrepreneurs and
pioneers. For it is the sacrifice that these visionaries put in that is creating the jobs that hired executives then can rationalize and out-
source. Without these pioneering daredevils, however, there are no ground-breaking innovations. And so there will also not be a
major job growth dynamic.
Q: So, in your world view, it is the ground-breaking entrepreneur who is the supreme expression of capitalism?
Nd: True.
Q: And the corporate animals are only stymieing them?
Nd: More or less. Because the main priority that these guys have is to play it save and not rock the boat too much. For too much do
they fear that this could backfire on them that they would now still be willing to support a truly visionary proposition.
Q: Okay, let’s assume that there is some truth in this, and that a revision of the capitalistic philosophy is really needed, that,
however, will not result in the end of all boom-bust.circles, correct?
Nd: Correct. These boom-bust-circles cannot be avoided altogether. But the duration of them can be prolonged. And so the amount
of unnecessary suffering can in deed be reduced.
Q: And do you think, it is in Noah denkt™’s interest to lengthen lifetime of these boom-bust-circles? After all, you plan to make your
money by predicting these crashes. And so cannot really want to counter the perversion of corporate capitalism too much?
Nd: Now, it is true, that we do want to make a living by getting the big calls right. But that cannot mean that we would like to have
people bleed unnecessarily.
Q: So you presume that too much unnecessary bleeding will eventually lead to people rejecting capitalism altogether?
Nd: That’s right. And so it could not be in our interest to support corporate capitalism too much.
Q: But why is it that you see this danger of people rejecting capitalism? After all, this system has made life better for most of us.
Nd: True, but look at the amount of people who are rejecting globalisation already now. And if you are not convinced by that then just
think about the rising xenophobia, the rising religious fundamentalism and the increased decomposition of society. Don’t you think
that is a pretty venomous cocktail?
Q: Could be.
Nd: So you accept this point of view?
Q: Somewhat.
Nd: Alright, thanks heavens!
Q: Why do you say that?
Nd: Because it is not easy to get through a questioning like that.
Q: But you invited me to do that. So you really have no reason to complain, about that.
Nd: No, we don’t. We are in deed happy, that you ask these questions. It’s just that ….
Q: What?
Nd: … that it gets exhausting at times.
Q: And you would like to avoid that?
Nd: Well, it would be nice, if we would at times agree with each other and not have to fight over everything. But then again, it is only
natural that we have to go through this.
Q: Absolutely. And so you better stop whining and crying!
Nd: You are right. We have asked for this. And so we should accept it now.
Q: Correct.
Nd: Yeah, correct.
Q&A between Noah denkt™ and its Alter Ego, first drafted on Jan 22, published on Jan. 25, 2008
------------------------------------------------------------------------------------------------------------------------------------------
Question from Alter Ego of Noah denkt™ (Q): It looks like your predictions finally come true and a recession in the U.S. is in deed
inevitable now.
Answer from Noah denkt™ (Nd): Yeah, it looks like it.
Q: And don’t you feel vindicated now?
Nd: Somewhat, but not too much.
Q: But hey, you really have reason to celebrate. After all your steadfastness in this is paying off?
Nd: Well, it is nice to know, that the market somewhat comes around to acknowledging the truth. But neither can we celebrate the
fact that a recession might be on the way, nor do we believe that the worst is over yet.
Q: What do you mean?
Nd: Well, as we told you before, the brunt of the correction will not come in this downturn but it will be in one of the recessions after
this one that the real pain will kick in.
Q: So you do not think that the coming recession will be a difficult one?
Nd: No, not at all, because the FED and the government will do anything they can to counter this downtrend. And besides that China
has also not yet come undone. So there is enough reason to believe that this next recession will be relatively easy to bear. (see
Comment below *** (later insert))
Q: But it is the one after that, that is causing you concern, correct?
Nd: Yes, that one, or the one after that.
Q: And why is that?
Nd: Well, as we told you before, and as we are glad to tell you again, this attempt to counter the explosion of a stock market bubble
by dramatically lowering interest rates cannot be the answer to the underlying economic problem. For too much does this reaction
to the existing bubble burst already lay the foundation for the following one, that one could now still hope to thereby avoid the bigger
pain that eventually will come.
Q: And what is this underlying problem that needs to be fixed in order to hope for more sustainable conomy?
Nd: The most important thing that needs to happen is a revision of the simple-minded greed logic that is dominating capitalism
right now. After all, there are still too many people in leading positions who to this day believe that any profit is a good proifit. And so
it really does not come as a surprise that we are running from one fashion bubble to the next.
Q; So, in you opinion, the underlying cause for the ongoing bubble bursts is a superficiality on the part of the capitalistic players?
Nd: That’s right. In fact, we believe, that is due to the near totalitarian nature of our corporate capitalism, that we have these ever
faster finishing boom-bust-circles. And so it is only natural that we cannot limit the distress.
Q: Well, one thing is for sure, Noah denkt™ is certainly not afraid, of using harsh words.
Nd: You are referring to us using the T-word?
Q: Exactly!
Nd: But that’s how it is, isn’t it? Just look at the amount of money that is being managed by hired executives. Don’t you think that the
sheer power of this warrants the expression totalitarianism? After all you can no longer dream of having a career if you do not invest
half your life in creating the packaging which allows you to present yourself as a full-hearted subscriber to the corporate executive
world view.
Q: But, come on, what is wrong with being a hired executive?
Nd: There is nothing with being a hired executive. The problem is only that these hired executives act more and more as if they were
highest expression of capitalism themselves. For that is plainly not true. And so it is only logical that we cannot avoid unnecessary
inflations.
Q: And now you even see capitalism at risk?
Nd: Absolutely. After all, if this capitalism is to survive than it desperately needs the geniality of individual entrepreneurs and
pioneers. For it is the sacrifice that these visionaries put in that is creating the jobs that hired executives then can rationalize and out-
source. Without these pioneering daredevils, however, there are no ground-breaking innovations. And so there will also not be a
major job growth dynamic.
Q: So, in your world view, it is the ground-breaking entrepreneur who is the supreme expression of capitalism?
Nd: True.
Q: And the corporate animals are only stymieing them?
Nd: More or less. Because the main priority that these guys have is to play it save and not rock the boat too much. For too much do
they fear that this could backfire on them that they would now still be willing to support a truly visionary proposition.
Q: Okay, let’s assume that there is some truth in this, and that a revision of the capitalistic philosophy is really needed, that,
however, will not result in the end of all boom-bust.circles, correct?
Nd: Correct. These boom-bust-circles cannot be avoided altogether. But the duration of them can be prolonged. And so the amount
of unnecessary suffering can in deed be reduced.
Q: And do you think, it is in Noah denkt™’s interest to lengthen lifetime of these boom-bust-circles? After all, you plan to make your
money by predicting these crashes. And so cannot really want to counter the perversion of corporate capitalism too much?
Nd: Now, it is true, that we do want to make a living by getting the big calls right. But that cannot mean that we would like to have
people bleed unnecessarily.
Q: So you presume that too much unnecessary bleeding will eventually lead to people rejecting capitalism altogether?
Nd: That’s right. And so it could not be in our interest to support corporate capitalism too much.
Q: But why is it that you see this danger of people rejecting capitalism? After all, this system has made life better for most of us.
Nd: True, but look at the amount of people who are rejecting globalisation already now. And if you are not convinced by that then just
think about the rising xenophobia, the rising religious fundamentalism and the increased decomposition of society. Don’t you think
that is a pretty venomous cocktail?
Q: Could be.
Nd: So you accept this point of view?
Q: Somewhat.
Nd: Alright, thanks heavens!
Q: Why do you say that?
Nd: Because it is not easy to get through a questioning like that.
Q: But you invited me to do that. So you really have no reason to complain, about that.
Nd: No, we don’t. We are in deed happy, that you ask these questions. It’s just that ….
Q: What?
Nd: … that it gets exhausting at times.
Q: And you would like to avoid that?
Nd: Well, it would be nice, if we would at times agree with each other and not have to fight over everything. But then again, it is only
natural that we have to go through this.
Q: Absolutely. And so you better stop whining and crying!
Nd: You are right. We have asked for this. And so we should accept it now.
Q: Correct.
Nd: Yeah, correct.
| © Landei Selbstverlag, owned by Wilhelm ("Wil") Leonards, Gerolstein, Germany. All rights reserved. Reminder: Noah denkt™ is a project of Wilhelm ("Wil") Leonards and his Landei Selbstverlag (WL & his LSV). Consequently, all rights to the texts that have been published under the Noah denkt™brand name are reserved by WL & his LSV. The commentary and the reasoning that was provided on this page is for informational and/or educational purposes only and it is not intended to provide tax, legal or investment advice. It should therefore not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or any issuer by WL & his LSV or its Noah denkt™ Project. In fact, WL & his LSV encourage the user to understand that he alone is responsible for determining whether any investment, security or strategy is appropriate or suitable for him. And to leave no doubt as to what this means we urge our user to also note our extended Legal Notice. |
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| *** Comment added on Jan. 20, 2013 : By the way, Noah denkt™ wasn't alone in underestimating the severity of the recession that was upon us in 2008. The archives of the Federal Reserve show that Ben Bernanke, Tim Geithner and Fred Mishkin got it wrong too. Even after the downfall of BearStearns they continued to believe that things were by and large under control. (See. "Las actas de la Reserva Federela muestran que no vio venir la gravedad de la crisis", in: El País, Jan. 19, 2013 (Mexico Edition)) |