Why the Great Recession Isn't the Great Depression.
Bob Bruner is the eighth dean of the Darden Graduate School of Business Administration at the University of Virginia. He teaches and conducts research in finance and management. Before his appointment as dean in August 2005, Bruner served as the founding executive director of Darden's Batten Institute, which focuses on entrepreneurship and innovation. There, he expanded Darden's Business Incubator.
As a financial economist, Bruner is best known for his research on mergers and acquisitions, corporate finance and financial panics. His books include "Deals from Hell," "Applied Mergers and Acquisitions" and "The Panic of 1907: Lessons Learned from the Market's Perfect Storm," with Sean D. Carr, which attracted wide attention for its discussion of the underpinnings of financial crises.
Question: Is the economy resetting or recovering?
Bob Bruner: Much has been made about the reset environment in which we now exist. In the dark days of September, 2008, Francoise Sarkozy said, “This is the death of Laisser-faire.” Other said it was the end of capitalism. Shortly after Obama’s election, Jeffery Immelt, CEO of General Electric said, “This is an emotional social and economic reset.” Steven Ballmer, the CEO of Microsoft, said much the same. Mohammad Al-Arian the co-CEO of the largest, one of the largest investment management companies calls it “the new normal”—as if to suggest a step function change downward in our outlook and expectations. This is a very serious meme, I would call it. It’s an idea that has spread widely through blogs and social media, certainly through the mainstream media. And I think it’s worth scrutinizing very carefully.
Quite often, these pundits will point to historical antecedents such as The Great Depression, they’ll say, "given our rates of unemployment, this is not unlike The Great Depression" or the depression of 1893 to 1897, or 1873 to 1875, and so on. And yet when you examine the antecedents you see that indeed they are much more severe than what we are living through right now. And if you look at the economics today you see some sharp asymmetries.
So we know that Detroit is in very dire shape. We know that California is struggling. Some states, some cities. Harrisburg, Pennsylvania is on the verge of bankruptcy. But other cities... Washington D.C. is actually thriving; New York City is coming back nicely. North Dakota, of all places, is actually growing. Internationally, we have states, countries such as Greece, Portugal, Spain, Ireland, in very tough shape. The United States is growing and has been growing since June, 2009, albeit at a slower rate than we would like; a slower rate than is necessary to create new jobs. And yet you have India and China that were almost unfazed by the crisis.
Germany is rebounding very nicely. So you see these asymmetries around the world and these are not the conditions of the Great Depression. Yes, we are seeing some "beggar thy neighbor" behavior on the part of other countries; yes, we’re seeing marches and rallies in Washington such as we’ve heard about in previous depressions, though the unemployment rates aren’t as bad, the growth has continued, it’s resumed earlier than the resetters might suggest. Net-net, I view the reset concept with skepticism. But I hasten to add that no one who pays attention to the facts today can deny that a lot of people are in pain, that there are grave struggles within companies and municipalities and states, and that the deep problems the United States faces are going to take years to work out. But this ain’t the Great Depression.
Question: Which industries will lead the turnaround?
Bob Bruner: We’ve seen buoyant turnarounds in healthcare, energy, event the public sector. The public sector has been hiring throughout this stretch. The defense industries, obviously with two wars on, and the subsidiary industries that feed all of the industries that I just mentioned. Technology has remained reasonably robust through this episode. Obviously, the technology that serves consumers and businesses experienced a decline, but it looks like they are on the rebound. Much depends in all of these cases on the rate of consumer and business spending and when that will reopen in serious ways.
We should remain very concerned about housing, that’s likely to be in a slump for years to come. There’s a large overhang of excess capacity, both in homes and commercial real estate. Financial services is another exclamation point, a point of concern for us, because it’s not clear how the financial regulations passed a few months ago will be actually implemented. The rules are being written right now. Certainly the rules will transform that industry in serious ways and until that uncertainty is resolved, I don’t think we’ll see the large banks and other financial institutions expanding in obvious ways. I’d say those are some of the examples of industries. It’s hard to know where else the symmetries will spread.
Reports of the American demise have been greatly exaggerated; buoyant turnarounds are happening in health care, energy and the public sector. Unfortunately, though, housing will remain in a slump for years to come.
If you're lacking confidence and feel like you could benefit from an ego boost, try writing your life story.
In truth, so much of what happens to us in life is random – we are pawns at the mercy of Lady Luck. To take ownership of our experiences and exert a feeling of control over our future, we tell stories about ourselves that weave meaning and continuity into our personal identity.
Researchers hope the technology will further our understanding of the brain, but lawmakers may not be ready for the ethical challenges.
- Researchers at the Yale School of Medicine successfully restored some functions to pig brains that had been dead for hours.
- They hope the technology will advance our understanding of the brain, potentially developing new treatments for debilitating diseases and disorders.
- The research raises many ethical questions and puts to the test our current understanding of death.
The image of an undead brain coming back to live again is the stuff of science fiction. Not just any science fiction, specifically B-grade sci fi. What instantly springs to mind is the black-and-white horrors of films like Fiend Without a Face. Bad acting. Plastic monstrosities. Visible strings. And a spinal cord that, for some reason, is also a tentacle?
But like any good science fiction, it's only a matter of time before some manner of it seeps into our reality. This week's Nature published the findings of researchers who managed to restore function to pigs' brains that were clinically dead. At least, what we once thought of as dead.
What's dead may never die, it seems
The researchers did not hail from House Greyjoy — "What is dead may never die" — but came largely from the Yale School of Medicine. They connected 32 pig brains to a system called BrainEx. BrainEx is an artificial perfusion system — that is, a system that takes over the functions normally regulated by the organ. The pigs had been killed four hours earlier at a U.S. Department of Agriculture slaughterhouse; their brains completely removed from the skulls.
BrainEx pumped an experiment solution into the brain that essentially mimic blood flow. It brought oxygen and nutrients to the tissues, giving brain cells the resources to begin many normal functions. The cells began consuming and metabolizing sugars. The brains' immune systems kicked in. Neuron samples could carry an electrical signal. Some brain cells even responded to drugs.
The researchers have managed to keep some brains alive for up to 36 hours, and currently do not know if BrainEx can have sustained the brains longer. "It is conceivable we are just preventing the inevitable, and the brain won't be able to recover," said Nenad Sestan, Yale neuroscientist and the lead researcher.
As a control, other brains received either a fake solution or no solution at all. None revived brain activity and deteriorated as normal.
The researchers hope the technology can enhance our ability to study the brain and its cellular functions. One of the main avenues of such studies would be brain disorders and diseases. This could point the way to developing new of treatments for the likes of brain injuries, Alzheimer's, Huntington's, and neurodegenerative conditions.
"This is an extraordinary and very promising breakthrough for neuroscience. It immediately offers a much better model for studying the human brain, which is extraordinarily important, given the vast amount of human suffering from diseases of the mind [and] brain," Nita Farahany, the bioethicists at the Duke University School of Law who wrote the study's commentary, told National Geographic.
An ethical gray matter
Before anyone gets an Island of Dr. Moreau vibe, it's worth noting that the brains did not approach neural activity anywhere near consciousness.
The BrainEx solution contained chemicals that prevented neurons from firing. To be extra cautious, the researchers also monitored the brains for any such activity and were prepared to administer an anesthetic should they have seen signs of consciousness.
Even so, the research signals a massive debate to come regarding medical ethics and our definition of death.
Most countries define death, clinically speaking, as the irreversible loss of brain or circulatory function. This definition was already at odds with some folk- and value-centric understandings, but where do we go if it becomes possible to reverse clinical death with artificial perfusion?
"This is wild," Jonathan Moreno, a bioethicist at the University of Pennsylvania, told the New York Times. "If ever there was an issue that merited big public deliberation on the ethics of science and medicine, this is one."
One possible consequence involves organ donations. Some European countries require emergency responders to use a process that preserves organs when they cannot resuscitate a person. They continue to pump blood throughout the body, but use a "thoracic aortic occlusion balloon" to prevent that blood from reaching the brain.
The system is already controversial because it raises concerns about what caused the patient's death. But what happens when brain death becomes readily reversible? Stuart Younger, a bioethicist at Case Western Reserve University, told Nature that if BrainEx were to become widely available, it could shrink the pool of eligible donors.
"There's a potential conflict here between the interests of potential donors — who might not even be donors — and people who are waiting for organs," he said.
It will be a while before such experiments go anywhere near human subjects. A more immediate ethical question relates to how such experiments harm animal subjects.
Ethical review boards evaluate research protocols and can reject any that causes undue pain, suffering, or distress. Since dead animals feel no pain, suffer no trauma, they are typically approved as subjects. But how do such boards make a judgement regarding the suffering of a "cellularly active" brain? The distress of a partially alive brain?
The dilemma is unprecedented.
Setting new boundaries
Another science fiction story that comes to mind when discussing this story is, of course, Frankenstein. As Farahany told National Geographic: "It is definitely has [sic] a good science-fiction element to it, and it is restoring cellular function where we previously thought impossible. But to have Frankenstein, you need some degree of consciousness, some 'there' there. [The researchers] did not recover any form of consciousness in this study, and it is still unclear if we ever could. But we are one step closer to that possibility."
She's right. The researchers undertook their research for the betterment of humanity, and we may one day reap some unimaginable medical benefits from it. The ethical questions, however, remain as unsettling as the stories they remind us of.
- Prejudice is typically perpetrated against 'the other', i.e. a group outside our own.
- But ageism is prejudice against ourselves — at least, the people we will (hopefully!) become.
- Different generations needs to cooperate now more than ever to solve global problems.
SMARTER FASTER trademarks owned by The Big Think, Inc. All rights reserved.