Professor Elam

Sunday May 23 2010

Mish posted this article from Bloomberg about the difficulty of finding a job upon graduation. 

Many of our students are already working and San Antonio is faring much better than the national average. Still I urge accounting students to obtain a certification now as quickly as possible, we are liable to have a sideways at best economy for many years.  

Now for those of you that believe I am just being a fear monger, take a look at this chart from Business Insider, it juxtaposes the S and P from 2000 with the Nikkei from 1989 to now, with the US DOW from 1929 to 1949. Here is what happened. 

FDR never stimulated private investment in the economy. The best he could do as create the WPA which paid people to work on various government projects. Now we are are not even doing that  we are just paying people 'not to work' by extending unemployment benefits to perpetuity. 

Japan never would write off its bad loans, so rather than undergo a couple of tough years, it has never recovered from its all time high in 1989. The result is not one but two lost decades. Japan the juggernaut that could do no wrong in 1989 has not been heard from since.