Review of Ravi Batra, the Great Depression of 1990 (Simon and Schuster, New York, 1985)
3 Pages Posted: 8 Feb 2005 Last revised: 26 Jul 2008
The Great Depression of 1990 was on the New York Times best-seller list for non-fiction in the summer of 1987. It follows a standard formula for best sellers in forecasting: Forecast a great disaster, and include a formula for redemption. If the disaster occurs, you can say, I told you so. If it doesn't occur, you say, It is good that they listened to my advice. I saved them. How can you lose? When I first saw this book, it occurred to me that it was a hoax. Here is a man claiming to be a highly respected economist who makes a forecast and provides a date. The forecast is that the great depression will occur in 1990. A variety of paths to redemption are provided, the most important being that rich people should have to give up much of their riches, for it is the concentration of wealth that causes business cycles. This is a fact that Batra claims to have discovered. Batra suggests that society should tax this wealth. On the other hand, he also provides advice to rich people on how to preserve their wealth - put it in cash, then store it in a safe deposit box and at home. Businessmen should avoid long-term investments. The key concept of my review is methodological. Are the methods used in the book sound? Here are the methods: (1) The appeal to authority. Batra claims to be a leading economist. Lester Thurow, Dean of the Sloan School at MIT wrote an encouraging preface to the book. (2) History repeats itself. Regular economic cycles exist. (3) Logical deduction. The forecasts rest upon a theory developed by P.R. Sarkar.
Keywords: Great depression, forecasting, Ravi Batra, business cycles
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