WI: 1980s great depression

JoeMulk

Banned
What if the recession of the early 80s turned into a second great depression with unemployment reaching 25%?
 
define "unemployment". your unemployment is not my unemployment, and it's not the US bureau of labor statistics' unemployment. ;)

as for effects, the chinese economy would go nowhere. there's no one buying their cheap things. equally japan would suffer an economic heart attack.

but there's one good thing: oil prices go down because international trade transport goes down.
 
Well things were pretty bad for workers all through the eighties.. but you could make things more serious.

Perhaps if we rewrite the history of the 60's and 70's we could do away with the American Manufacturing Base quicker.. If the United States is more authoritarian the computer revolution might have not ever happened..

Take it as you will on the alt history wiki I did something that sort beat around the bush with though the POD was in 1944

http://althistory.wikia.com/wiki/The_Great_Mistake_of_1944_-_A_Wallace_Presidency
 
I kinda wonder how this would effect the Soviet Union. They'd be facing their own issues with their economy, but with a second Great Depression, who knows?
 
You could start with the stock market crash of 1987. The market lost 25% of its value in one day, it could easily have been a harbinger of something lasting.

If it does end up deflating the Japanese economy, that might actually be a good thing. The economic bubble there in the 1980s--and didn't burst until 1991 in OTL--lead to damage that has really lasted until today. A sharp downturn that doesn't see the banks get so over leveraged might actually position Japan much better for the 1990's.

China is likely screwed. In the 1980's, it was still an incredibly poor place that was just starting to make money from exporting. If sales dry up, and the ball doesn't get moving for a few years, we could see a real delay in economic growth. And without economic growth to buy out the post-Tienanmen generation we could actually see big changes there.

Europe will hurt from a depression in the US, as everyone else does, but they might do all right. They are guaranteed good economic growth after the EEC starts in 1992, and the fall of the eastern bloc presents opportunities for both new markets and new cheap labor.

I'm assuming the depression starts in the US, because otherwise it would be hard for one to spread there. The US is already dependent in this period on foreign capital, but US exports were not that big of a concern. This is the period were everyone was worried over the record trade deficits with Japan, for example. I might suggest a stock market collapse, perhaps paired with inflation, leading to a dearth in business investment. So much of the growth of the 1990's was lead by tech start-ups. If ITTL, investors are only interested in safe investments, they might never invest in those little projects. Imagine a world were the equivalents of Cisco and eBay are Japanese and German---that could end up making a big difference.

Personally, I think the Reagen-era tax cuts were a mistake, because they lead to massive wealth inequalities. However, they did free up a lot of rich men's capital for investments and speculation. A few of those speculations, like the above-mentioned tech giants, ended up paying off handsomely.:p Of course, it also lead to a huge tech bubble, and when the money left that, it all went into real estate in the US, which... lead to today.
 
I kinda wonder how this would effect the Soviet Union. They'd be facing their own issues with their economy, but with a second Great Depression, who knows?

An actual depression in the capitalist world would crash oil prices, depriving the Soviet Bloc of foreign currency needed to finance grain imports. Soviet hardliners seize power after Brezhnev's death and decide to use force to demand concessions from the west, which is talked about in Red Storm Rising. Alternatively, Gorbachev realizes the problem lies in inefficient agriculture, and seeing the first successes of economic reforms in China, copies Deng's bottom-up approach to Perestroika. A third option, the crippling food shortages in the Soviet Bloc lead to mounting unrest, leading to an earlier 1989 revolution.
 
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