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Originally Posted by Elspode
I seem to remember that the economy during the 70's really sucked pretty bad, dejavu-wise. I don't recall it improving due to high fuel prices and shortages.
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The economy sucking so bad for most of the 1970s finally resulted in changes in 1980s. For example, as a result of firing the anti-American Henry Ford in 1981 (patriots stopped buying Fords after decades of crap products and therefore voted out Henry), then 'car guys' finally started designing Fords. Engineeers had designed the 1965 Mustang. What is the next car designed by car guys in Ford Motor? 1986 Ford Taurus. A car that eventually started making profits for Ford in 1990. Look at those numbers. Look how long economic indicators take to measure profits from innovation.
It took the 1970s to eliminate Henry Ford. Then almost ten years to start improving things. Of course. They don't teach in the business schools what really makes profits. It takes typically four to ten years to design. The profits in 1990 Ford were due to work done in 1981, 82, 83, 84, 85, and 86. Notice years like 1989 and 1990 are not listed. What does it take to create economic change? Four to ten years later, the profits from innovation finally appear on spread sheets.
Don't for a minute think today's oil prices will adversely affect todays economy. We have not yet seen how today's oil prices affect your job. We have not yet seen what should be the resulting stagflation due to how the government is leaking money everywhere and how US dollars are flowing overseas in waves.
It is how economies really work. We are just now suffering the pain of that George Jr tax cut. Pain that should continue for years to come. Again, that is how economics works. Don't think as business school graduates are taught. They put some capital into a simulator and out pops more profits that next year. Bull. Think what they don't teach in the business schools. Real world economics are based upon the product - more specifically innovation. Any innovation inspired by higher gas prices will never appear for at least four years - and longer.
$100 million in 1994 to build a hybrid. Eleven years later and GM still has no hybrid? Innovation cannot happen in corrupt institutions until the pain becomes so great as to threaten bankruptcy. Then many years later for liberated innovations to finally emerge in economic spread sheets. Lagging indicators take years.
Currently nothing has changed except the hype and emotion.