Lately I am spending time reading, less time posting. My reading is on the topic of financial crises. It is not a cheery subject but it is also less frightening than I would have guessed. There have been a number of crises in my lifetime around the world. The good news is that they are survivable, though not necessarily without harm. Examples are the oil shock in the US in the early 1970's accompanied by high inflation lasting into the early 1980's, the Asian currency crisis in 1997-98, and Argentina's domestic and external debt default in 2002. The recovery from these episodes lasted many years. In Argentina's case, they may still not be able to borrow at preferred rates and may have difficulty finding a lender. What possible other harm is there?
My friend, Curious George, found a fascinating video series recently that chronicles the days in the mid-70's in New York City during one of its extensive power blackouts. This one fell in the middle of the US economic crisis and some observers speculate there might be a link between the crisis and the blackout. What a way to save a buck! The chronicle of events that created the blackout make it seem more like a series of equipment failures and poor communication were some of the essential ingredients. If you allow a politician to express a belief then it could become an attack from Mars sponsored by the other party! I digress. What is indisputable is the amount of fear, confusion and anger that became pervasive in the city and what that did to the city financially. One message in the video series is that the reaction to events is less correlated to the actual cause and more correlated to the opportunity the crisis creates. In other words, a crisis will create a vacuum for awhile and what fills the vacuum is what we need to prepare for.
There is a quote from Mayor Koch early in the first clip (there are seven) that can't be overlooked. He said "New York City is where the future comes to rehearse". Could these video clips be describing another day in the future?