It looks like Europe will get hit by the ongoing recession and deflation worse than the US. China could get whacked by a double blow of 1) a global recession clobbering their overheated economy and 2) the impact of their governmental entities holding huge amounts of US mortgage debt that is decreasing in value. If so, then the US economy could end up being the last one standing and the least damaged.
I hope President Obama follows through on his pledge to pump tens of billions a year into R&D for renewable energy and cleantech. This will spinoff countless new technologies which in turn will create new jobs and industries. Going green may well be what saves us from the worst of the recession.
re: “President Obama” well it might not come to pass. Get used to saying “President McCain.”
Regardless of which president we end up with, he’ll inherit a huge mess. As Mr. T used to say, “I pity the poor fool…”
Economically, we’re looking at some pretty painful “rearrangements.” The trucking industry– whose massive growth was supported by artificially cheap oil and massive public highway subsidies– employs millions as drivers, loaders, dispatchers, etc. Trucking won’t go away completely, but it’s already shrinking as fuel prices rise. Rail, which will take up much of the slack, isn’t nearly as labor intensive. Fuel prices are already pressuring the suburbs, as people seek to live closer to their jobs. That means hundreds of thousands of homes may never regain their value– and hundreds of thousands of minimum wage suburban jobs may disappear. (Why keep a suburban grocery store fully staffed if no one shops there?) And as highways become less central to our economy, those massive public works contracts will begin to dry up, too, hitting the construction and civil engineering industries.
There are plenty of other areas where adjustments have begun or will begin. Global warming, peak oil, and eight years of Bush mismanagement will continue to take their toll. Yes, new jobs will appear– but they won’t be in the same fields or the same locations as the old jobs. And, as is usually the case in such scenarios, it’ll be the unskilled workers who suffer most. It won’t be easy for someone to move from truck loader to solar energy technician.
This won’t be the first major rearrangement we’ve faced, and we will survive it. But for most of us (unless you’re old enough to remember the Great Depression) it will be the first in our lifetime.