Friday, February 20, 2009

This was depressing - Krugman's column

I don't recommend reading Paul Krugman if you are in a happy, hopeful mood. It will kill it. Infact if you are in a happy, hopeful mood, you might want to stop reading this post now.

Still here? Okay, you were warned, here's the part that got to me the most:
To appreciate the problem, you need to know that this isn’t your father’s recession. It’s your grandfather’s, or maybe even (as I’ll explain) your great-great-grandfather’s.

Your grandfather’s recession, on the other hand, was something like the Great Depression, which happened in spite of the Fed’s efforts, not because of them. When a stock market bubble and a credit boom collapsed, bringing down much of the banking system with them, the Fed tried to revive the economy with low interest rates — but even rates barely above zero weren’t low enough to end a prolonged era of high unemployment.

Now we’re in the midst of a crisis that bears an eerie, troubling resemblance to the onset of the Depression; interest rates are already near zero, and still the economy plunges. How and when will it all end?

You'll discover not for some time...

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