Customer Reviews

Stock Market Crashes of 1998 and 1999: The Asian Crisis and Your Future

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I loved the two reviews praising Batra as if he were some sort of seer, an economic guru. I have my own predictions: The stock market will rise and fall in February 2000, and the economy will go up and down during the year 2000. If these predictions come to fruition, am I a guru too?

Batra usually gets hammered by establishment critics for his unconventional, left-of-center stands. He predicted a great depression in 1990 in a book he wrote in 1985, and, indeed, 1990 witnessed a severe recession. Even after the recession, the recovery was slow. Real wages fell for 80% of workers until mid-1996, a statistic which indicates to me that the 1990s really haven't been so grand. In this book he makes a compelling case that the stock market is a bubble -- overinflated and ready to crash. He also predicted the market would recover some after the Fed cut rates -- right again. the only weakness in this book is that it needs better editing, as there were some grammatical errors in it. Nevertheless, there is some sound analysis in it. Batra bases his conclusions, in part, upon economic history and empirical fact. He shows that economies that utilized protectionism and state intervention succeeded quite well in many cases. I would bet that we will see another stock market crash this year, in accordance in with Dr. Batra's predictions. Most of his policy solutions would help alleviate the world's deflationary condition; they are also backed by egalitarian leanings. While I don't expect an 80% collapse of the market, 30% down on the Dow this year strikes me as quite likely. And seriously, Batra is a good economist. He has written intensely mathematical papers which deal with trade theory in a complex world. In every book or article he writes he makes it clear that tariffs can serve a beneficial social purpose. On the whole, the book is quite good. Batra could use a better editor, but his occasional grammatical errors are justified by his rush to publish quickly. He is both a skilled and moral economist.

Ravi Batra published this book in 1997, after the Asian crisis exploded on the scene. So far his predictions for the US economy have been right on the mark. He predicted the US stock market would drop in August 1998 -- and it did. He said the market would recover some of its losses if the Fed then raised rates -- both happened. For 1999, he predicts another crash, resulting in the collapse of the "American Business Empire." Batra always offers interesting insights in his books. Like his earlier classic, "The Downfall of Capitalism and Communism" (1978), he credits much of his socio-historical analysis -- as well as ideas for economic reform -- to his late Indian teacher P.R. Sarkar (1921-90). He may be wrong on 1999, but after the Asian crisis spilled over to Russia in 1998, and to Brazil more recently, I wouldn't bet on it.

Dr. Batra is a brilliant guy who tragicaly jumps to unwarranted conclusions. There was no Great Depression in 1990-1995. He should have called it quits there when he predicted that if a Great Depression did not materialize by the year 1995, then that window of vulnerability had shut. Batra's main problem consists of the fact that he does not factor human resilience and the ability to adapt into his economic equations. His most convincing argument to date (which he needs to develop) is his analysis of Free Trade (see "The Myth of Free Trade"). It is convincing and (IF correct) portends bad times in the future. Unfortunately, he drops that analysis and is mesmerized into trying to predict millennial doom. Sadly, if he keeps predicting doom, and if he lives long enough, Dr. Batra will be correct. It's really a pity that a man of his intelligence doesn't use it to further our understanding of socio-economic dynamics.

In case you don't know, Ravi Batra is also the author of "The Great Depression of 1990." I know what you're asking yourself: there was a depression in 1990? No, there wasn't. But Dr. Batra predicted one. Now, with "Stock Market Crashes of 1998 and 1999," the arch doomsayer is at it again, predicting dire times ahead when any sensible person knows better. Batra doesn't know as much economics as even the average college undergraduate. He decries free trade as if he's utterly unaware of the benefits of a division of labor. (If protectionism between countries is good, what about between states? Or cities? Or people?) If you're interested in learning something about the economy, try "The Myth of Rich and Poor" by Cox and Alm. Down Batra's way only madness lies.