Overcapacity Weighs Heavily On Recession

from the of-course-it-does dept

Pessimism about the economy is popular these days, and folks who buy into that will certainly enjoy this extraordinarily pessimistic article talking about all the overcapacity found throughout many different industries, and how it’s only going to make things worse for a while. I have problems with these types of articles that pick up on a trend, and extrapolate it to the point of disaster without taking into account other things that are likely to happen because of these trends. For example, in the case of all this overcapacity, there are plenty of people who see excess supply and realize that it’s a huge opportunity. Excess supply drives down prices, meaning that people can take some of that supply and do things with it that could never have been done before – opening up entirely new markets. The article also takes some points that are used for optimism in one sense and makes sure to give the most pesimistic spin to it. For instance, they talk about one company that (gasp!) has used technology to become so productive they don’t need to hire new people. Another newspaper may take that same story and spin it to say “look at how productive American businesses are becoming with technology – this bodes well for technology.” Instead, this article says, in effect, “look how awful this is for American jobs.” If you want to feel pessimistic, go ahead and enjoy the article, but I wouldn’t take its conclusions too seriously.

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