Dana’s hiring practices amount to 159 and concern 2,300 workers
There are many lessons we have learned in these tragic days. Don’t underestimate the alerts through the macabre impact of rash decisions. The absence of short-term signals does not prevent a long-term catastrophe. Past floods do not guarantee prudent behavior in the future. Or the essential need for coordination in the face of the magnitude of weather events and the systemic effect of people’s mobilization and above all the necessary preventative investments in times of prosperity and calm.
I am not a civil engineer nor a climatologist nor have I managed public policies in this sector, but Yes, I am an economist with three decades of professional experience. and I can’t help but write down some parallels between economics and meteorology. In both disciplines catastrophes occur and in both these extreme events could be avoided or at least mitigated their effects.
Three crises
Let’s remember the great economic crises: the crash of ’29, the oil shock of 1973 and the great recession of 2008. In all the consequences were dramatic, millions of families ruined and thousands of businesses closed, as well as generations condemned to poverty.
At the same time, in the three collapses there were always those who warned about what could happen. At the end of the Roaring Twenties, economist Roger Babson publicly warned of an immediate stock market crash that would eventually occur during Wall Street’s Black Tuesday. A few months before oil prices doubled in 1973, the Bildeberg Group meeting predicted the brutal rise in the price of crude oil. The teacher Nouriel Rubini warned in 2006 against the real estate bubble and the risks of American subprime mortgages, when the crisis arrived two years later he earned the nickname of disaster doctor.
In all three cases the warnings were ignored. Even in these three recessions, those most affected were the most humble. And in all of them even the passage of time did not help since after four decades (a period of time sufficient for amnesia), a great crisis occurred again. Everything like in Valencia.
Warnings and oral tradition were disregarded; the most affected, most fragile citizens
But I would like to focus on the positive part, which there is, of the three crises. After the crisis of ’29, many of the large social protection programs were created which support the welfare system which still protects the population from economic recessions today. Likewise, the oil crisis pushed the United States to avoid dependence on crude oil imports and made possible innovations such as shale gas that explains why it is now energy self-sufficient. the 2008 financial crisis led to new market regulations that we enjoy today with greater oversight and transparency that make a new financial disaster impossible.
From the three crises we have also learned the importance of a network of small businesses that promotes economic dynamism, in the face of the misperception that only large companies matter. And so, after each of these disasters, tools to support SMEs have emerged, such as competition laws, local development agencies and business incubators respectively. Supranational coordination initiatives have also emerged from the three crises to avoid unilateral decisions that almost always lead to disaster.
Infrastructure
The Valencian DANA reproduces almost faithfully all of the above. Warnings and oral tradition were disregarded; The most affected were the most fragile people either because of the conditions of their homes or place of residence, or because of their dependence. The infrastructures created in the past following similar catastrophes have contributed to reducing the number of victims, but at the same time the failure to act with greater foresight in the past has fueled the tragedy. And, those mobilized manage to mitigate the consequences of the drama which will require a reconstruction not only of the Valencian infrastructure but also of the governance of our administrative structure.
In Valencia the mobilized people manage to mitigate the consequences of the drama which will require reconstruction
If at the Bretton Woods conference in 1944 the world had managed to agree on the creation of institutions like the International Monetary Fund (IMF) or World Bank To avoid the economic crises that have devastated the world and at the same time promote international cooperation, we in Spain should now ensure, with courageous reforms, that our institutional framework is up to the next catastrophes, which are sure to come.
Title: Learning from the Past: An Interview on Economic Crises and Their Lessons
Editor (Time.news): Welcome to our special interview segment. Today, we have the honor of speaking with Dr. Elena Martinez, a seasoned economist with over thirty years of experience in the field. Dr. Martinez, thank you for joining us today.
Dr. Elena Martinez: Thank you for having me! It’s a pleasure to discuss such crucial topics that shape our economic landscapes.
Editor: Your recent insights have highlighted some important parallels between past economic crises and current events. Can you elaborate on the similarities you see?
Dr. Martinez: Absolutely. When we look at the Great Depression of 1929, the oil shock of 1973, and the Great Recession of 2008, we notice common threads—primarily the catastrophic impacts that follow ignored warnings. In each case, there were voices forecasting the impending doom, yet those warnings fell on deaf ears.
Editor: That’s a striking observation. It seems that historical lessons are often overlooked. What do you think causes this recurring cycle?
Dr. Martinez: It’s a mix of optimism bias and short-term focus. Policymakers, businesses, and individuals tend to prioritize immediate gains over long-term sustainability, often dismissing risks until it’s too late. This was true during the Roaring Twenties, leading up to Black Tuesday, and it continues to resonate today.
Editor: You mentioned that marginalized communities are disproportionately affected during these crises. Can you explain why this is the case?
Dr. Martinez: Yes, societal structures often leave the most vulnerable with limited resources to withstand financial shocks. In times of economic downturn, safety nets may be insufficient, leading to severe consequences for those already living on the edge. This was evident in all three crises—the poorest suffered the most while those in power largely insulated themselves.
Editor: Despite the grim reality of these crises, you pointed out some positive outcomes. Could you elaborate on those?
Dr. Martinez: Certainly! After each of these economic downturns, we witnessed significant reforms. For example, following the Great Depression, we established numerous social protection programs that still aid our citizens today. The 1973 oil crisis sparked innovations that ultimately led to energy independence in the U.S., and post-2008, we saw enhanced regulations that improved market transparency and consumer protections.
Editor: That’s an encouraging perspective. How do you think we can harness these lessons moving forward, especially in the context of today’s economic challenges?
Dr. Martinez: It’s imperative to invest in preventative measures during prosperous times, just as we would in infrastructure for flood control. We need to support small and medium enterprises, create robust safety nets, and encourage international coordination to prepare for potential crises. Learning from the past is our best defense against future catastrophes.
Editor: In a rapidly changing global landscape, what role do you think innovation will play in preventing future economic disasters?
Dr. Martinez: Innovation is crucial—it allows us to adapt and respond to new challenges. The COVID-19 pandemic, for example, accelerated digital transformation across various sectors. We must continue nurturing this spirit of innovation, aiming to create resilient economic systems that can better absorb shocks.
Editor: Thank you, Dr. Martinez. Your insights provide valuable perspectives on the interconnectedness of economic history and current events. As we move forward, may we remember to heed the warnings of the past.
Dr. Martinez: Thank you! Let’s hope we can create a future that learns from history, ensuring that we don’t repeat the same mistakes.
Editor: This has been enlightening. We look forward to your continued contributions to the field and to our understanding of economics. Thank you again for your time.