Racism Caused Recession

Comet P/Halley as taken March 8, 1986 by W. Li...Image via Wikipedia
Farrakhan: Levee May Have Been Bombed To Flood ... flood poor black people out of New Orleans after Hurricane Katrina.
You could argue it was cyclical. It happens every 70 years. The last time was the Great Depression. And there was something like the Great Depression about 70 years before the Great Depression. I guess I will not see the Halley's Comet or another Great Recession in my lifetime then.

And smaller recessions happen about once a decade. There was a recession when Clinton ran for president. There was a recession when Bush became president. So when Obama showed up, it was about time.

But I am not satisfied with these explanations. There has to be more. These are my views.

One is the micro, macro thing. There was no macroeconomics before the Great Depression. The Great Depression gave birth to macroeconomics as we know it today. I think, similarly, there has been no globoeconomics. But the thing to note is we have not seen the birth of one yet. That intellectual leap has not been made. The science lags behind the reality.

Another is racism. Why was smart money chasing real estate in America? That money could have seen better, steadier returns in global microfinance and global infrastructure. Why did not smart money go into those directions? And will smart money go into those directions now?
Fred Wilson: Chasing Returns: the banks were chasing returns in the mortgage markets and the related markets for CDOs and other exotic derivatives ..... The venture capital business is showing good returns for the first time in a decade. The sectors that are performing best are web services and early stage/seed investing. ..... I do not think venture capital will ever turn into the kind of mess that the mortgage markets became three years ago. .... But I do think we are seeing signs of excess in the markets we invest in and I do think we are seeing investors chasing returns in deals they don't fully understand. That is a red flag. And I am choosing to observe it, pay attention to it, and share it with all of you.
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