[jimbob]

I'd say that the early american (primarily US) economy did quite well, circa Adams (what would that be, 1850s?) right up until WWI. During this period, your average Joe Bagodonoughts wouldn't just trundle on down to the local banker and procure a loan for a "frivolous" expense such as a brand new - top of the line - horse/automobile, let alone a line of credit so that he/she could go off on a holiday. The primary purpose of a bank was to help people who wanted to undertake "serious" investment get the starting capital (and then of course the bank gets its pound of the pie). (that said, there was the stock market crash which had bank involvement, but that was more a sickness of the stock markets than the banks)

Today the average Joe is encouraged by nearly every banking (and/or credit card) institution on the planet to enroll themselves in even more debt for the sake of lifestyle. I just can't agree that this is a healthy modus operandi by which to run an economy!

Now I didn't choose the pre-WWI time period at random - interestingly the time period in which Western Civilization controlled the largest % of world capital/wealth is now past, and as the Western Civs produce less but consume more, their wealth as a percentage of total world wealth is declining. (I've got the numbers if ya want them)

And so my summary equations regarding a vibrant and growing economy:

Savings = good
Stagnant Savings = bad
Consumption = good
Reinvestment = better
Rabid consumption = extremely imbalanced = bad
banks = unnecessary (except for large capital projects)

Now I'm just a biologist, but them's my views!

[ February 14, 2003, 23:46: Message edited by: jimbob ]