[ExI] I know I shouldn't do it

BillK pharos at gmail.com
Wed Jun 10 07:40:40 UTC 2009

On 6/10/09, Rafal Smigrodzki  wrote:
> Every time I post on the economy I get drawn into fruitless arguments
>  with enemies of capitalism and I know it's best just to stay out of
>  it, but this time I can't help it (again):
>  http://mjperry.blogspot.com/2009/06/krugman-economy-is-stabilizing.html

Have a look at what Krugman actually said.
The press seized on the words "recession could be over by September",
but really he was saying that he doesn't have a clue. Anything could


June 9 (Bloomberg) -- Nobel Prize-winning economist Paul Krugman said
damage from the U.S. recession may persist “for a very long time,”
with no clear engine for renewed growth.

“I’m really quite scared that we could muddle along,” Krugman said in
a lecture today at the London School of Economics and Political
Science. “I really do see the possibility of a global version of the
Japanese ‘lost decade’ without the prospect of an export-led recovery.
This could be unpleasant for a very long time.”

“The ‘oh-my-God-the-world-is-ending’” phase of the economic downturn
is over, and financial markets are “stabilizing,” Krugman said today.
Still, “the employment situation is continuing to look bad and will
probably get worse,” he said.

Krugman said he has “no idea” what will power the U.S. out of
recession. The U.S. fiscal stimulus package, while not “trivial,”
isn’t large enough to fuel sustained growth. Also, with the global
economy in the doldrums, the U.S. can’t rely on a revival from a surge
in exports, he said.

Even the end of a recession “doesn’t mean the same thing as it did in
the old days,” said Krugman, a Princeton University economist.
Unemployment may remain high longer than after the end of prior
economic contractions, he said.

It sounds a bit like he is trying to cover all bases.

I'm not sure what he means by the 'end of the recession'. If
unemployment, bankruptcies, etc. continue to get worse, (but more
slowly), that hardly looks like the bottom of the recession to me. And
even when the bottom is reached, he thinks the world could stagger on
at that level for years.


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