Krugman and Shiller: We’re In a Depression

Posted on May 1, 2012 by WashingtonsBlog

Top Economists Say It’s a Depression

Paul Krugman released a new book yesterday called “End This Depression Now“. In the introduction, Krugman writes:

The best way to think about this continued slump, I’d argue, is to accept that we’re in a depression …. It’s nonetheless essentially the same kind of situation that John Maynard Keynes described in the 1930s: “a chronic condition of subnormal activity for a considerable period without any marked tendency either towards recovery or towards complete collapse.”

Robert Shiller said yesterday that the world is in a state of “late Great Depression”.

Many other top economists also say that were in a Depression.

We are stuck in a depression because the government has done all of the wrong things, and has failed to address the core problems.

For example:

  • The government is doing everything else wrong. See this and this

This isn’t an issue of left versus right … it’s corruption and bad policies which help the top .1% but are causing a depression for the vast majority of the American people.

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  • Bob

    Although we may indeed be in the midst of another great depression, it’s hidden from both sight and mind. Food stamps are the equivalent of modern day bread lines and credit cards provide lifelines to keep the masses occupied with their high end purchases of ipads and flat screen televisions.

    Until the burden of debt is so overwhelming that the 5 or 6 credit cards each family uses to pay for essentials start to become declined, the majority will fail to see the hole this nation has dug itself into and the even deeper hole debt-laden families are trapped in.

    Unlike miners who dig deeper, as an occupation, to put food on the table—nobody will come with aid, searching for the American families stuck in the holes (out of greed or necessity) that they’ve fallen into.

    Here in Los Angeles, it’s business as usual. You still have to make a reservation for a table at that high-end restaurant, it’s packed—even though 70% of the patrons pay for the meal with a credit card where the minimum monthly payment edges higher and higher.

    They’re hungry now and they must make a good impression. God forbid everyone who is in the same boat realizes there’s a leak and nobody knows how to swim.

  • http://www.correntewire.com lambert strether

    If you think the role of the government is to enable a tiny minority of kleptocrats to loot the country and return the rest of us to feudalism, then their government has done exactly the right things.

  • Joe Saver

    We’re not in a depression. Apple has the largest market cap of any company on earth. And they are in the business of selling expensive non-essentials to the masses. Until we see a dent in Apple’s profits, the argument that the economy is in a depression is not credible. GDP is showing an increase quarter after quarter. Yes, there’s some unemployment, and retirees are making nothing on their savings, so that’s the pain that is being suffered now because Greenspan printed money in order to move prosperity forward and delay suffering until the future. The future has arrived. Krugman wants to see more money printed because he thinks we can keep pulling a Greenspan forever. We can’t. But it does appear that the suffering is what’s trickled down while the profits have trickled up. The delayed suffering has to happen at some point, but you can’t push it all onto the working class and retirees. My suggestion? Eisenhower-era tax rates, and Eisenhower-era spending-to-GDP ratios. And stop this addiction to money printing and deficit spending by going cold turkey. Money-printing just steals wealth from savers and retirees, and I haven’t heard Krugman talk about how they’re gonna get paid back. He doesn’t care about them, he cares about keeping the game of artificial prosperity going. But that’s just like drug addiction, and you can’t cure drug addiction by taking more of the drug, so just stop the money printing and the deficit spending, and replace that behavior with discipline and integrity. Yes, that’s right, let’s all just grow up a little.

    • Jessy

      While I do agree Apple has had many a good year and their products are not necessary I still think we are in an economic depression. That said, I agree printing money and making what we have worth less is ridiculous. Almost as ridiculous as the price fluctuation in my home. I bought it at a reasonable amount. One week later I was looking in the paper and the price of homes in the area had more than doubled. Now even I was smart enough to know that this large pile of wood and sheet rock was not magically worth all that. A few years later the housing market crashed and I was glad I had not borrowed against this fake money. What you have, whether it is your home, possessions, any material item is only worth what another is willing to pay. I think the housing market boom created a lot of people who were millionaires in their mind. I’m not saying I know how to fix this, but I do know more people are out of work and in my husbands company the people we do work for are taking longer to pay their bills after completion. It is time for people to grow up and also time to stop fighting over old issues and time to start fixing this mess no matter who you think made it. Pointing the finger, passing the buck has never solved a problem yet. Figure it out people, we’re paying you a fortune to, so just get it done.

  • http://www.thesustainabilityprinciple.org Dave McArthur

    I tend to agree with Jo Saver in that I too believe Krugman is delusional. He fails to understand that the immense wealth we have enjoyed this last fifty years has come almost entirely from mineral oil and we have now converted most of that wealth into pollution. Most of the great trade systems he promotes are entirely unsustainable, being dependent on the delusion that there exists eternal mineral at $US25 a barrel. Printing money does not convert pollution to mineral oil again.It only works to transfer the remaining wealth from the poor to the rich. We need to start teaching physics in our schools again and stop teaching all this Banker- driven energy gobbledygook.

 

 

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