Customer Reviews

The Great Depression of 1990

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I read this book in the 1980's, when it first came out. What made the biggest impression on me was not his forecasted date, but rather the social cycle theory upon which his forecast was based. Even 20 years later I can still recall the cycles and how they evolve from one to the other. The step from "acquisitor" to "laborer" societies is pretty ugly, with a lot of social upheavals and instability, and the majority of wealth in the hands of very few.

I think the main error the author made was trying to predict a single year for a change that is part of a cycle that takes hundreds of years to evolve through. My own prediction is that he will eventually be proved right, only his timing was wrong.

It's wonderful, in a way, when a person writes a book whose predictions turn out to be completely wrong. (Less wonderful when people keep buying his nonsense!)

A review of this book can be very brief -- just two points need be made:

1. There wasn't a great depression in the 1990s (to the posters who say there was a "recession" in the early 90s, I say: the unemployment rate in the US during the real Great Depression was 25% at its peak. It never cracked 6.5% in the 1990s. A mild recession does not a depression make, nor does it justify the title or apocalyptic tone of this book.)

2. Had the US adopted Batra's recommended policies -- dramatic increases in trade restrictions, etc. -- there WOULD have been a depression. One of the central causes of the real Great Depression was the Smoot-Hawley Tariff, which increased tariffs dramatically. Batra proposed similar measures in this book. In other words, in order to prevent a depression that never came, Batra argued that we ought to adopt measures that caused an actual depression in the past.

We should all be for Mr. Ravi Batri. By selling enough copies of this book and its sequel ("Surviving the Great Depression of 1990"), he singlehandedly prevented worldwide economic collapse!

Batra's 1985 prediction of a world-wide depression in 1990 did not happen. This guy continues to pump out economic trash. Those who buy his books - - and believe Batra's wild-eyed rantings and ravings - - are in serious need of help. Get a life!

Ravi Batra Ph,D. is a professor of economics at SMU and the author of books on International Trade. This 1987 book predicted a great worldwide depression in 1990 by analyzing business and economic cycles since 1700 (a recession every decade and a major depression every third or sixth decade). The symptoms are the mushrooming federal budget deficits, trade deficits, and the increasing concentration of wealth among the rich. Did this prediction fail to occur? Yes, but the government and economy are dynamic and can be modified to avoid foreseen problems. What they can't do is to reverse the plundering and exploitation of the population that leads to a depression when the people are impoverished. This is an informative and educational book. It should teach that projecting future results based on past experiences is not always correct.

The `Foreword' says analysts can be divided into those who seek explanations in cyclical regularities, and those who seek explanations in unique events (p.13). Each has strengths and weaknesses. History combines both elements. Batra believes depressions can be controlled by social policies designed to stop undue concentrations of wealth (p.15). Inflation is caused by an increased money supply, or by a rapid change in value for a commodity. Lester C. Thurow says the Federal Reserve stopped attempting to control the money supply in 1982 because of new money market instruments. [Hasn't that changed?] The `Preface' says that there was no severe economic crisis since WW II (p.17). Batra believes that another economic cataclysm is imminent and explains why (economic data, sociopolitical ideas, historical trends). There must be major changes in government policy to avoid another great depression (p.18). Batra believes events repeat and things move in cycles (p.20). This book will identify and interpret these cycles, and explain how they affect economic fortunes. Batra will explain the four cycles of money, inflation, regulation, and depression that have gone on for 200 years (p.21).

Chapter 2 expounds on "Sarkar's Law", a theory about human history. [Idealistic and oversimplified generalizations?] It ignores the Global Cooling of the 14th century and the 6th century dimming. Both caused a shortfall in agricultural output and affected society. Chapter 3 traces the cycles of money growth from 1770 to 1970. The variations in money supply and money growth accompany economic fluctuations. The rate of inflation follows money growth (Chapter 4). Economic regulation by the government accompanies money growth and inflation (Chapter 5). Regulatory bodies expanded in the 1970s as it did in the 1940s (p.90). Money or wealth determines how the state governs its people (p.93). Wars stimulate money growth and regulation (p.95). Failed predictions are the occupational diseases of economists (p.96). "An extreme concentration of wealth" causes depressions (p.97). This topic is banned among economists "and those in power" (p.98). Chapter 6 notes the pattern of depressions. The Federal Reserve caused bank failures in the 1930s (p.106). [Who benefitted?] This did not happen in Canada and Great Britain (p.107). A concentration of wealth causes a depression (p.109) and bank failures (p.111). Another effect is the increase in risky investment "bubbles" (p.112). The net effect is a downward spiral to the economy (p.113). Reducing the taxes on the wealthy concentrated wealth and led to the Great Depression (p.115).

Chapter 7 explains why "the perverse fiscal policy of the Reagan presidency" (p.118) makes another depression inevitable. Eminent economists disagree (p.119). Batra explains why he predicts a depression in 1990-1996 (p.123). He lists the parallels between the 1920s and the 1980s and explains them (pp.124-130). Batra predicted economic difficulties for Japan in 1990 (p.134). Chapter 8 has his recommendations on investment. Your knowledge and experience will tell you which advice is good or bad. Chapter 9 offers suggestions to prevent another depression. The Great Depression was caused by the failure of the Federal Reserve Bank to control the money supply (p.163). Bank failures resulted and people lost their savings. [Who profited?] Economic theories "have failed to produce long-run economic stability" (p.164). [As if that is possible.] Economic policies address the symptoms of economic ills, not the causes. Batra recommends higher tax rates to reduce the budget deficits and income and wealth inequalities (p.165). A Federal property tax on the one percent who own over 33% of the wealth is recommended (p.166). Laws should ban banks from lending money for business takeovers. Mergers fuel stock speculation (p.167). Batra recommends fundamental economic reforms (p.168): higher minimum wages, lower taxes for ordinary workers, and a fair tax system. [The last does NOT refer to the hoax version "Fair Tax Book"!]

Why was his prediction for a depression in 1990 wrong? Batra counted the quantity of years without considering their quality. The New Deal laws of the 1930s created more equality and prosperity for the people, avoiding another depression in 1960. But in 1978 Congress started to neutralize or destroy the New Deal regulations and this continued into the 1990s. Add 30 years to 1978 and there you have that cyclical depression.

I read this book when it first came out and knew he was right. My only question was the timeframe. So, he was a little off. I bet all you critics are EATING YOUR WORDS right now!

Ah, what difference 18 years makes. It was pure hubris to call the date the way this author did. The ability to stagger along had more power than expected. But the long wave will not be denied, self destructive action of the financial ruling class will not cease, the inventiveness with which the financial gurus will distort the relationship between symbolic wealth and real goods and services is inevitable, in the end the guiding hand heads to the cliff, near to the edge, and finally over it. And then the climb back up commences until the lessons become unlearned. It's the raw market stupid...how much do you like it now?

Having read Mr. Batra's book, "The Great Depression of 1990" some twenty years or so ago, and again this week, most, whether conservative or liberal, would agree that Mr. Batra is definitely a smart man. But, with history as his judge, perhaps his penchant to eschew the economics of Ronald Reagan and his ilk, will be his legacy. Clearly, Mr. Batra had, and probably has philosophical issues that have been proven contrarian to classic conservative politics. Yet his views are refreshing in that, if a depression does happen in the future, we have a potential template as to how to respond. So, maybe, it was not all for naught. But thank God he was wrong! And better yet, thank God for a resilient US economy.

Regardless of what others have written, this was a correct prediction. While Donald Trump was going insolvent in the late nineties and at the same time, pushing his con job, The Art of The Deal, Batra was spot on! Perhaps some of you don't remember the $250 billion Savings and Loan gov't bail out. Housing prices in Southern California crashed 40% from 1989-1995. Pay attention to wise words from 1986.

Batra predicted in 1985 that a grotesquely unequal distribution of wealth would cause a depression in 1990. Establishment economists mocked his book. Yet, lo and behold, there was a recession in 1990 which lingered for quite some time. Even after the slow and weak recovery, real wages for the bottom 80% of the labor force did not start to rise until late 1996. Batra combines an interesting eastern theory of social cycles with modern economic theory. His reforms are fundamental and humane. He basically argues that inequality causes purchasing power to decline, thus precipitating recessions and depressions. Batra also notes that all the standard modern economic theories -- from Keynesianism to supply-sideism to monetarism -- have failed to rid the world of poverty and instability. He argues convincingly that these theories only address the symptoms of the problem, and not the root cause. All in all, Batra made a bold forecast which pretty much was on the mark. His reforms are interesting also, for they combine the best features of dynamic capitalism with the best features of egalitarian socialism.