Posted 10/21/2011

THE WORLD IS VERY DEPRESSED

While all the financial talk is about avoiding recession, the world has stealthily slunk into a state of depression.

Workers are depressed about jobs.

Consumers are depressed about sinking levels of real income.

Storekeepers are depressed about the lack of customers.

Voters are depressed about the performance of Washington.

Exporters are depressed over their declining books of business.

Government workers are depressed over declining budgets and layoffs.

And all this depression is occurring throughout the world.  Just look at the headline articles in Thursday's Wall Street Journal:

• "Doubts grow on Euro Fund."  The politicians seem unable to cope with the debt problems of Greece, Italy, Spain and Portugal which could bring down the economies of Europe.
• "Greek Protests Intensify on New Cuts."  Strikes and rioting may prevent the government from complying with the bailout demands of the Eurozone leaders.
• "Chinese Rail Projects Grind to a Halt as Funding Dries Up."  China's growth rate is declining, making the Middle Kingdom less able to rescue Europe.
• "China Points to Trade Woes to Defend Policy."  Its trade surplus has shrunk from three percent of GDP to two percent.
• "Brazil Cuts Rates Again, as It Tries to Spark Growth." The country has become more afraid of declining exports than rising inflation.
• "Argentina Sees Peril Next Door."  The locals say, "When Brazil sneezes, Argentina catches cold."

Headlines and sub-headlines about America's financial situation were no cure for depression:

• "The Dow Industrials Lost 72.43 Points."
• "Groupon Scales Back Its IPO Valuation."
• "AMR Tumbles into Red." (Bankruptcy rumors abound for American Airlines.)
• "Morgan Stanley Details Risks." There is a $7.2 billion exposure to six European countries.  Its "capital cushion" for emergencies has declined.
• "Retailers Brace For Holidays."  "Small merchants worry they won't survive another season of heavy discounting." 
• "The Fed Says Economy Picked Up A Little, But Joblessness Persists."
• "Millions of Foreclosures Are Ruining Millions of Lives."
• "Consumer Prices Rose 0.3% In September, further straining American households coping with lackluster growth in wages."

Was there any good news at all?  To be fair, there was one thing. 

• "Rolls-Royce Powers Ahead in High-Wage Countries."  The giant maker of turbines has factories in England, the U.S. and Germany.  Its only Asian plant is located in Singapore, which has high wage rates.

Overall, the news last Thursday added to the world's depression.  USA Today may have produced the best, all-encompassing summary headline:

• "Anti-Depressant Sales Up 400 percent."

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