Word: batra
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Charting the possible scenarios for trouble has become a growth industry. The Great Depression of 1990, an offbeat work by the heretofore little-known economist Ravi Batra of Southern Methodist University, has perched on the New York Times best-seller list for twelve weeks and has sold more than 300,000 copies. Competing doomsday books bear such titles as Blood in the Streets (a how-to manual for crisis investing), The Panic of '89 (a fictional thriller about global financial follies) and The National Debt (an indictment of America's borrowing habits...
...distribution of income has tended to wind up unevenly slanted toward the rich. In 1929 1% of U.S. families held 36.3% of the wealth; the proportion fell as low as 20.8% in 1949 but rose back to 34.3% by 1983, Economist Batra notes in The Great Depression of 1990. That disparity is dangerous, he contends, because banks with idle money are tempted to make shaky loans to financially strapped customers, while the rich tend to make increasingly risky investments in search of ever larger returns...
...Indian-born Batra, 44, who teaches at Southern Methodist University, begins his book by raising the specter of the Great Depression of the 1930s: "I believe a disaster of the same, if not greater, severity is already in the making. It will occur in 1990 and plague the world through at least 1996." He details parallels between the Roaring Twenties and the Soaring Eighties: feverish speculation, financial deregulation and a shaky banking system...
...main culprit, in Batra's view, is extreme concentration of wealth. As was the case in 1929, he says, 1% of American households control about 35% of the nation's assets, compared with as little as 21% in 1949. Because the lower and middle classes now have a smaller proportion of the assets, they rely heavily on borrowing and thus become overextended. That puts at heavy risk the banks and other institutions that have loaned them money. Meanwhile, as the rich grow richer, Batra says, they become enamored of speculative investments. As a result, goes Batra's theory, the financial...
...Batra's thesis turns on his highly questionable contention that an inexorable cycle brings a depression every 60 years or so. To be sure, Batra is not alone in his gloomy outlook. Many other thinkers, including Economist John Kenneth Galbraith, have drawn comparisons between the perils of 1929 and today. Few of them would agree, however, with Batra's position that an uncontrollable calamity is inevitable...