Paul Krugman told the New York Times:
“When it comes to international trade, actually it’s not the Great Depression, it’s worse,” he said, presenting charts showing the decline in global trade activity falling much more steeply in the current downturn than during the Depression.
“The scale of the collapse of world trade has been so large that it has produced a degree of international linkage that surpasses what even the pessimists imagined,” he said. “World trade acted as a transmission mechanism,” spreading economic distress “even to those countries that had relatively healthy financial systems,” such as Germany.
“We really are one world economy in a way that has never been true before,” he said.
On a lighter note, Krugman through out these one-liners:
- Perhaps trade with China in recent years hasn’t been so unfair to the U.S., he joked: “They send us poisoned toys and tainted seafood and we send them toxic securities.”
- On the need for regulation: “Ground beef is like asset-backed securities — you really don’t know what’s in that burger.”