Paging Ed Yourdon: Any Planned Rebuttal to ZNet's Critique of Your Depression Scenario?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
And for anyone else who cares to comment--especially any economy seers out there, what are the holes in Mitch Ratcliffe's latest flame of Yourdon's self-styled economic theory?
Here's the Link
Note that the article itself includes a link to Part 1. (You'll have to navigate to the first part yourself.) Haven't seen any posted rebuttals here (or anywhere else) yet, so all ye defenders of the unimpeachable Yourdon name either have at it, or please direct me to the site(s) where any rebuttals are posted.
My own opinion--for what little it's worth--is that Mitch's points are as well argued as any of Yourdon's, or for that matter those of the more analytical and thoughtful posters on this forum--at least on a superficial level. (However, it's hard to refute any assertions about the nature of contemporary economics when you're as financially "challenged" as I am, so I'm at a loss to prick holes in his arguments.) The one thing that stood out for me was his failure to address a bank runs scenario and its effect on consumer confidence. Otherwise it was one of the better critiques of the economic meltdown scenario. Any counter-rebuttalists out there--including you, Ed? (By the way, flamers please note that I've spent countless hours lurking here and am definitely a GI by any conservative definition; but you can't blame me for looking for reasons to hope.)
-- Hoarding Fool (firstname.lastname@example.org), February 25, 1999
Someone alerted me to Part 1 of Mr. Ratcliffe's article a few days ago, but I've been too busy with other things to respond to it right away. My daughter -- the economist in the family -- is working on a response, and we hope to have it posted in a few days. I haven't seen Part II, and I don't know if she has either.
One point to keep in mind: the article that I posted at http:// www.yourdon.com/articls/y2koutlook.html was not intended to represent "self-styled economic theory" but rather a decision to go "on the record" as to what my outlook is. I made it pretty clear in the article that I'm not an economist; on the other hand, even those of us who are NOT economists are going to have to make our own personal economic decisions about Y2K.
I'll try to remember to post something here once we've got a coherent response put together...
-- Ed Yourdon (email@example.com), February 25, 1999.
Okay, Jennifer finished writing her rebuttal of Mitch Ratcliffe's critique, and we've posted it on my web site. If I can make this link- creating stuff work, you should see the link below
Link to Jennifer Yourdon's article
If it doesn't work, the URL is http://www.yourdon.com/articles/ y2kjennifer.html
I'm still working on my rebuttal, and will hopefully post it later today, or perhaps sometime tomorrow.
-- Ed Yourdon (firstname.lastname@example.org), February 26, 1999.
Let me make a point about having to be an economist to predict the economy's future: you don't. As in, you don't have to be an economist to predict the economy's future (I don't believe Mitch Ratcliffe is an economist either). I think it was Harry Truman who said he wanted to find a one-handed economist, because economists were always telling him, "On the other hand..." And it was either Truman or Eisenhower who said that if you laid all the economists in the country end to end, they still wouldn't reach a conclusion. No offense to Ed's daughter, of course.
Two famous, and true, stories about economists: in 1990, September or so, the vaunted Alan Greenspan said, "I don't see any evidence of a recession" (or words to that effect). We were, of course, three months into the 1990-91 recession.
And we were nine months (I believe) into the vicious 1973-74 recession when the estimable Fed chairman of the time, Arthur Burns, said all looked jes' swell for the economy. Righto- it was the worst recession since WW II.
So don't hold your breath waiting for establishment economists to figure out Y2K. The reason Yardeni believes the way he does is because he has actually (gasp!) *studied* the thing. Most have not. And many will admit it.
-- Drew Parkhill/CBN News (email@example.com), February 25, 1999.
It doesn't take a bricklayer to recognize a crooked wall. . .
-- Hardliner (firstname.lastname@example.org), February 25, 1999.
It's going to take me awhile to read and digest Mitch Ratliffe's comments. Briefly, though, it's hard to imagine Y2K not having a significant impact on the economy. The biggest question is whether these economic disruptions would last a month, a year or 10 years.
It wasn't hard for me to grasp the possible impact of Y2K when I started reading about in May 1998. There was a strike by UPS in the summer of 1997 that hurt a lot of businesses at that time. Mercifully, the strike did not last for months. But even in May 1998, I realized that Y2K could have the impact of ten UPS strikes going on all at the same time.
Here's a report by the National Association of Purchasing Management while the strike was going on...
And here's a news article from 1997...
"UPS strike hits ranchers, stores hard"
The difference between the UPS strike and Y2K is that Y2K isn't a strike that can be called off. Y2K can be repaired, but anyone waiting till 2000 to do remediation will find repair difficult. General disruptions could hinder specific repairs. Are chip manufacturers compliant? What percentage of planes can safely fly if the FAA is not compliant? What about foreign oil imports?
-- Kevin (email@example.com), February 25, 1999.
Kevin: the UPS strike affected one company in one industry in one country for a relatively short period of time. Y2K coupled with the global economic mess will be a LOT worse than 10 UPS strikes. Try 1000.
-- a (firstname.lastname@example.org), February 25, 1999.
There's also a question of how long those shortages last. That would make a real difference on the economic impact.
PS: do you really mix music? Cool :)
-- Drew Parkhill/CBN News (email@example.com), February 25, 1999.
Need I add that I currently think an 8.0 outcome is a plausible Y2K scenario for the U.S.?
I was describing the thoughts I had back in May, 1998. A 10-year depression cannot be ruled out.
-- Kevin (firstname.lastname@example.org), February 25, 1999.
Let me get very specific here. What bothers me the most about Y2K isn't the first month or two when there could be utility and major transportation disruptions--I'll be prepared for that.
What does bother me about Y2K is what happens AFTER the first month or two. Shortages and a depression could last for an indefinite period of time...and I'm not sure I know how I'll deal with that.
-- Kevin (8.0) (email@example.com), February 25, 1999.
There are many unaddressed items in Ratcliff's article, and a whole bunch of points that are highly speculative. Let's only say that he omitted to address potential shortages of the type that led the CEO of Sun Microsystems to remark that it would be wise to stockpile computers this year. Then, too, he skipped totally over the petroleum industry. As if this wasn't enough, Mitch should spend some time addressing the Elliott Wave principal -- the effects of psychology on the market. In his haste to dispute Yourdon, Ratcliff is blind to the fact that more than a few students of markets -- the ones who make their living from playing in this sandbox -- believe that we may be heading for seriously hard times without Y2K. Last, Ratcliff plays semantic games.......the difference between recession and depression is only one of magnitude.
Just my opinion.
FWTW, I'm one of those (who don't make a living in the markets) who believes we are heading for a depression with or without Y2K, but that Y2k will makes things worse -- and will end up (in the history books) being blamed for the thing.
-- De (firstname.lastname@example.org), February 25, 1999.
The implications of a depression are even more serious when one factors in two sobering realities.the debtload this country is carrying is 5.7 trillion dollars...think about that for a minute...where will the money come from to trigger a rebound? Worse....though, is the morality and work ethic of today. Compare today's generation with those of the thirties...think there will be work camps...or riots... I think if it slips into a depression, an overthrow of the government or fractionating of the nation and world is a real possibility...why? look what happened during the french revolution, during the time Hitler came into power...etc...all a result of severe economic crises.
-- rick shade (Rickoshade@aol.com), February 25, 1999.
He's just another tipical Polyanna, I haven't seen any valid arguement in his banter. Obviously he didn't read about the Senate report and the CIA's predictions either. He's "no economist" as he admits of himself, so I don't see why Ed's arguements shouldn't be as valid.
Another case of hyperfocusing on individual trees and missing the forest.
-- Chris (email@example.com), February 25, 1999.
I agree - I gave up reading Ratcliffe a while ago...
-- Arlin H. Adams (firstname.lastname@example.org), February 25, 1999.
Classic DGI. Classic ZDNet.
First and foremost, Y2k has nothing to do with economics, but the economy will very likely take note of Y2k. Show me the economic theory that states "GDP will decline x% whenever the global technological infrastructure suffers a synchronized brain aneurysm". There isn't one. Economics has no experience in this regard. Hence, making one's case from classic economic theory is suspect at best.
Semantics swamp - depression is in the eye of the beholder, a relative term. Let's poll Japan.
Straw man tactics - argues against things Ed didn't actually say. e.g., permanent depression.
Poor understanding of history, draws analogies where none exist. e.g., equates global conflict (non-technological) or black plague (regional) with Y2k (global & technological).
Poor understanding of economics, offers standard remedies that have been proven not to work in a depression to prevent the depression we won't have anyway. e.g., "low" interest rates are immaterial in a depression. "Low" interest rates only help if you have a job, you are a good credit risk, and the "real" cost of borrowing yields a positive return on investment. Again, check with Japan, who apparently is not in a depression but "only" a severe recession, and where nominal interest rates are now and have been nearly zero.
Ignores much published fact and high probability, including the dumping of small suppliers by larger companies (productivity losses and job losses), seriously lagging global compliance levels (productivity losses and job losses), unsustainable historical all-time-high stock valuations (confidence losses), and fractional banking stress (confidence losses), to name a few.
-- Nathan (email@example.com), February 26, 1999.
Will someone who understands economics well please explain to me (in understandable terms) the difference between a recession and a depression? I, too, am financially challenged, and want to get it all firmly in my mind. Also I want to explain it to my children, who are asking for an explanation.Many thanks.
-- Mercy (firstname.lastname@example.org), February 26, 1999.
IMHO anyone who tries to address this in only economic terms is going to miss the mark. This is going to be a people problem.
I'm an ex-programmer and an observer of the human condition, and several people on this forum have, I believe, correctly pointed out the biggest factor in how this country survives, or not, the next 10-15 months: we're not the same people who survived the '30's.
I don't have the credentials to debate economics, but I *know* what happens when a computer tries to work with errant data (GIGO). I *know* how pervasive computers are, frighteningly more than the DGI's realize. I *know* how long it took me to 'get it,' why should I expect someone less knowledgeable in the field to grasp it in even less time.
I programmed in the '70's and '80's, and never gave it a thought, literally. I got out of programming in the mid '80's, and still never gave it a thought. Pretty clueless, huh? The only thing that gives me any comfort at all, and it's darn little, is that I'm pretty sure the coding I did is no longer in use. No matter, there's still millions and millions of clueless coding out there.
I don't have to be an economist to appreciate the stone arch bridge analogy: how many stones have to work loose and fall before the bridge collapses? More importantly, how long does it take to re-build the bridge when 90% of what you need is at the bottom of the chasm?
To the rest of you out there working to put supplies in place *off* the bridge (the Hamasaki alternative), thank you. To Ed and Drew and all of the others, keep up the good work. It *does* help.
Sorry, this ended up being more of a downer than I intended. I guess I need to go back over to the fruitcake thread.
-- Cowardly Lion (email@example.com), February 26, 1999.
Thanks Ed! And my apologies about the "self-styled economic theory" crack. It was meant to be in quotes as a characterization statement made by Ratcliffe but my rhetoric got sloppy (grovel, grovel). Keep up the great work!
-- Hoarding Fool (firstname.lastname@example.org), February 26, 1999.