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EDITOR’S PAGE

Dr. Ravi Batra, king of the dismal science, believes that the Great Depression is about to return
By Ruth Miller Fitzgibbons |

I am trying to picture him on “Good Morning America,” sitting opposite Joan Lunden, softly delivering his message of the apocalypse. “So. Mr. Batra,” she might begin, “tell us why you believe that in less than two years, millions of Americans will be in bread lines?”

And the shy, self-effacing prophet of economic destruction, a professor at SMU for the past fourteen years, will begin to explain how he arrived at his astonishingly simple and absolutely terrifying scenario for the future.

Dr. Ravi Batra, a native of Punjab, India, holds a Ph.D. in economics with a concentration in international trade. He has been singing the same discordant hymn since the early Eighties. Though he couches his economic tenets in elevated theories of cyclical sociology, Batra’s basic message is this: if you look at the economic history of the past 250 years in decade-long chunks, a pattern emerges. Every sixty years or so, history is doomed to repeat itself. Batra began to notice eerie echoes of the events of the Twenties that led to the great stock market collapse of 1929 and the Depression that followed. Allowing for the fact that we must have learned something from the national debacle of the Thirties. Batra adjusted the timetable and came up with the title of the book that will make him famous: The Grean Depression of 1990.

Actually, the book is not new. In 1983, Batra attempted, with little success, to peddle his ideas to major economic journals and publishing houses. The professor admits that his theories were contradictory to the theories of most prominent economists* forecasts at the time-everyone from the liberal John Kenneth Galbraith to Massachusetts Institute of Technology’s conservative Lester C Thurow. “Every major economist was predicting a decade of high interest rates and double-digit inflation based on the unprecedented deficits in the national treasury. I came along and forecast stable inflation and interest rates, record highs in the stock market, and an impending collapse of our financial structure. The reaction was laughter.”

Few are laughing now. With less than three years to go before Doomsday, Batra has witnessed the mixed blessing of seeing his predictions come frighteningly true. Lester Thurow, a reluctant convert, wrote the forward for Batra’s book.

Batra sees “spooky” similarities between the Twenties and the Eighties, ranging from parallel conditions in inflation, unemployment, and interest rates, to falling energy prices and sharp rises both in the stock market and in bank failures (which, in 1986, reached their highest levels since the Thirties). He also views with alarm the widening gap between the haves and the have-nots. “Whenever 1 percent of the population claims 35 percent of the nation’s wealth, trouble is brewing.” he says. If Batra is prescient, trouble is brewing indeed. The proportion of riches controlled by America’s wealthiest 1 percent recently crept past 33 percent for the first time since the Twenties. Add to that the destabilizing conditions of a huge deficit, trade imbalances, shaky Third World debtors, banks crippled by bad loans, and you end up with a prescription for a severe and lengthy depression.

Ravi Batra likes to frame his investment strategy for the future (oh yes, he has an investment strategy) in a thought from Henry David Thoreau: “A man is rich in proportion to what he can do without.” Small comfort, perhaps, to those of us with tastes for Volvos, veal, and vintage wine. But if Batra’s predictions come true, we may have to learn to live with small comforts,

So what does the professor suggest? First of all, increase your savings now. The economy will zip right along through 1988. Batra believes that the Dow may well hit 3.500 before it falls late that year. 1989 will see a minor comeback, but it will be the calm before the stormy collapse in late ’89 or early 1990.

Reduce your debt as much as possible, Batra says. Pay off those car installments, remit on that lingering college loan, pay down your mortgage. Batra estimates that some 30 percent of Americans will find themselves out of work (teachers and repairmen, he predicts, will be among the spared vocations), and to add insult to injury, prices will stay at current levels rather than deflate as they did in the Thirties. Why? “Because the government will print more money,” Batra says. “The politicians will feel the pressure to act.”

Hold onto your house, Batra advises, and not simply because of your emotional investment in it. “The depression will, naturally, precipitate thousands of foreclosures. So many in fact that pressure on Washington may well result in Congress passing a law to make foreclosure illegal.”

As for investments, stick with blue-chip stocks (avoiding oil and construction industries), U.S. Treasury bonds. AAA Corpo-rates, and municipals with an A rating or better (at least Dallas is safe). But near the middle of 1989, the watchword is sell. Stash cash and sink your extra money in gold or bullion. “The crucial months to watch are the last quarter of 1989 and the first quarter of 1990,” Batra writes. “If the stock market drops no more than 20 percent during these months, then the biggest danger has perhaps been avoided.”

Does that mean, then, that Batra believes that the Depression of 1990 can be dodged? He is guarded, but he grants that there is the potential for negating the powerful cycle of repetitive doom. “I am encouraged that people in America are listening. There is hope that things can change.”

And what, I asked Ravi Batra as a final postscript to his economic outlook, does he plan to do with the money he makes from the sales of his book? He flashes an uncertain smile and, hesitating slightly, replies. “I will put it into a savings account and start a trust for the hungry, for all of the people who will be in need.”



Cong ratul at ions are in order for D’s team of writers, artists, and editors, who were honored recently at an awards ceremony sponsored by the City and Regional Magazine Association. In the largest sweep of awards among the thirty-two magazines competing, D took four golds, one silver, and two bronze medals for local features, investigative writing, special editorial sections, excellence in writing, cover, and spread design.

I also have the pleasure this month ofwelcoming former Texas Homes SeniorEditor Rebecca O’Dell to the D editorialstaff. O’Dell will develop new lifestylesfeatures for D in the coming months, drawing on her considerable expertise in fashionand home/design.

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