|
With quite large fruit crops coming this season, growers and marketers need an enthusiastic response from the consuming public, both in the United States and the rest of the world.
Can we get that response?
Current evidence is that we are in a recession that could rival the Great Depression, but the one crucial factor that makes this different is government response. Massive deficit spending is, in the view of most modern economists, the right way to arrest the steep decline that turned the recession of the early 1930s into the monstrous Depression that lasted into the 1940s.
David Schweikhardt, an agricultural economist at Michigan State University (MSU), sent me via e-mail an Internet link you might want to try: http://www.ft.com/cms/s/0/b31c06a2-5a7a-11de-8c14-00144feabdc0.html.
It takes you to an article in the Financial Times, in which Martin Wolf says the current recession is tracking the Great Depression – in job losses, collapse of world trade, decline in global industrial output – and, worst of all, that the current stock market decline is bigger than the corresponding period of the Great Depression.
The response by governments, however, has been very different. Deficit spending this year will be almost 14 percent of Gross Disposable Income, three and a half times the effort during the 1930s. Despite protests from conservatives, this effort must work or we won’t sell fruit this season, or maybe for a decade.
In his note to me and about 30 faculty members at MSU, Schweikhardt said:
“Here’s an excellent article by Martin Wolf of the Financial Times. He is one of the best, and I agree with every word of it. Be sure to click on his link to ‘pictures’ in the second paragraph to really grasp what he is saying.”
The charts, which show current economic trends compared to those of the 1930s, are quite dramatic.
|
