Millennial Recession is One of the Mildest and Harshest; Intellectual Revolution is Here

BOSTON-Economist Lester Thurow described America’s most recent recession as one of the mildest, yet harshest in recorded history. While the recession can be considered one of the mildest ever, it has been one of the highest in job losses since the Great Depression. America is losing 400,000 jobs every three months, the MIT professor of management and economics told the audience at NAFCU’s 36th Annual Conference. Part of the reason behind this is that the world is engaging in three revolutions, Thurow said. First, all nations are moving from socialism to capitalism and even the U.S. is becoming more capitalist. Since the industrial revolution, nothing else has proven itself to generate growth; all it takes is greed, he said. However, it also leads to crashes because of the herd mentality behind it, Thurow said. For example, is an antelope going to run with the herd when they sense a hungry lion nearby or will it wait and see if a lion actually shows up? You cannot survive that way. The second revolution is the third industrial revolution. Everyone knows the first was steam and electricity. The second was microelectronics and biogenetics, and the third is intellectual, the control of knowledge. At one time, Thurow explained, the richest people were considered to be the landowners. Now, the richest man on the globe, Microsoft’s Bill Gates, does not particularly own a lot of land, but he has gotten “fabulously rich by controlling knowledge,” he said. The final piece of the puzzle is globalization. Thurow predicted that in 50 years from now, people would not be discussing the American economy, but the global economy. However, he pointed out, we are currently less globalized than we were 100 years ago when 25% of the globe was controlled from London and another 15% was run in Paris. All of this contributed to the most recent of economic hardships. The gross domestic product grew 2.4% in 2002, not a bad rate by 1980′s standards. But with productivity up, technology and other factors have allowed for unemployment to shoot up due to downsizing, a concept that was not even thought of in the 1980s. -