‘Great Depression 2.0′ avoided: Krugman
Published: August 10, 2009
Updated 7 months ago
Krugman said in a speech to an international business forum here that although the worst of the financial crisis was over, the world now faces a prolonged slowdown like Japan’s “lost decade” of the 1990s.
“How do we get out? I think the technical answer is — God knows. We have a great shortage of role models,” said Krugman, a professor of economics at Princeton University in the United States.
Krugman said that in the past, swift economic recoveries saw affected countries export their way out of trouble, trading with countries with large surpluses.
“Unless we can find another planet to export to, we cannot have an export-led recovery from this global financial crisis, which means we have a serious difficulty,” he said.
Other possible solutions — consumer spending, business investment and housing booms are all unlikely to kick-start the US or world economy this time.
“We seem to have avoided the Great Depression 2.0,” Krugman said, but added: “I do believe that full recovery is at least two years and probably more than that off.”
He compared the world economic picture to “a globalised version of Japan through much of the ’90s. Formally, Japan spent only pockets of its lost decade in recession, but as a whole it was a period of consistently slow growth.”
Krugman said that to find anything comparable to the current woes, economists have to look back to the 1930s, when a global slump was brought to an end “by a very large set of public works programs known as World War II.
“Hopefully we’re not going to repeat that strategy,” he joked, adding that policy makers could try more stimulus programs, higher inflation targets and spurring business investment.
“We don’t know which of these things would work, so we need to try all of them,” he said.
Krugman also urged a restructuring of the financial system to prevent a recurrence of the crisis, with more effective bank regulation, and limits on the risk that important institutions can take on.
“The general principle is that anything that in a crisis has to be rescued — like a bank — when you’re not in a crisis, has to be regulated like a bank,” he said.
“I have no confidence this is going to happen. In a way, the downside of our having managed to avoid a full repeat of the Great Depression is that we may have rescued the economy too soon before the political momentum for fundamental reform was strong enough to cause changes.
“Which means I worry this is all going to happen again in the not-too-distant future.”
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What an ass hat. Unemployment is pitiful. Competent companies now have to compete with incompetent companies that got bailed out. Massive price increases are on the horizon. And this shit face is trying to convenience us a depression of this magnitude has been avoided?
As much as I respect Krugman, he’s wrong. There is still so much more coming.
Clapping harder doesn’t fix anything.
Here we have the Nobel Prize winner for Economy who was so jealous of Obama picking Tim Geithner for US Treasury, that Krugman asked that Geithner be fired because his ideas were wrong. Krugman refuse to help the President with suggestions but joined in Republican Leader Rush Limbaugh with attacks. Krugman used the NYT to condemn everything Secretary Geithner was doing. From day one of Geithner’s appointment Paul Krugman used the Media/Press to say the plan would fail and only he knew how to fix the problem. It’s Aug. 10th and Secretary Geithner was correct and Krugman was WRONG. Now Krugman is changing his story as if he is the smart one. Actions speak louder then words and Krugman showed he lucked out getting the Nobel Prize because Tim Geithner has proven to be much much smarter. Just think if Krugman had of joined in the Obama Camp with suggestions he might look a lot smarter to those around the World. Well even the Nobel Prize Judges make mistakes as we see.
interestingly, most people out there are still hurting like nuts while the ruling eilte and the big bankers just stole a cool 2 trillion. And while that theft “stopped the plummet”, nothing has fundamentally been fixed, and now Geitner is asking to increase our credit limit again? ’cause $12 trillion isn’t enough debt?
Personally, I don’t see how things have “stopped” just because job losses are slowing down. I’m not convinced that it’s from stabilization, I think it’s from companies not having anything else to cut.. but there is nothing to suggest jobs will come back, and you can’t have recovery without jobs coming back.
I would agree that Krugman jumped the shark here.. I think Depression 2.0 is just officially starting, and you can’t notice that (as fact) until you can look back at it. If we go 2 years without job creations, isn’t that depression? near 20% unemployment and no jobs and no real growth? …. but that doesn’t make him “wrong” about all of this, nor does it make Geitner right, or smart.
And where are the regulatory reforms that we need to prevent this kind of thing in the future? .. oh, right.. “genius” Geitner says we don’t need any, the Market learned its lessen and will play nice now.
Too bad for the party of NO. They still think their causing failure will get them elected next year. Silly repugs.
The ruling elite have lost nothing (substantial) from this crisis so nothing will change. The ultra-rich are still getting 10s of millions a year to keep playing shell games with other people’s money and lives, so they will continue to do what they do..
What should be noted, and discussed by smart people, is that since we’re a “global economy” that can’t “export our way out” since we don’t have any other planets to export to, we kind of need to rethink several things.. Like, individual ownership of resources in a global playing field. The planet is getting too small for just a few thousands of folks to squat on “all the stuff” and demand everyone else become slaves to them (that’s what’s going on with this globalization process).
No one living today asked to be born. No one in India asked to be born in India instead of America or China or Briton or whathaveyou.. We are all just “here”, and in order for us all to “live”, we need stuff that is geographically “there”. 200 years ago it made sense to “trade stuff for other stuff” because the world was huge (by comparison)…. weeks, if not months, to get stuff from one side of the world to the other; now it’s hours. The planet is smaller, the numbers of people WAY more, the suffering caused by individual private squatting on resources more widespread and severe.
We need to take that next step and become one people, all of whom have the same access to technology and resources.. or we will cause the pain and suffering and death of billions of people for no good reason.
http://www.thevenusproject.com
Paul Krugman is such a jerk and shill for the establishment. He’s like the rest of the arrogant elites, their minions hand them these statistics that never apply to the real world as they go along with their chauffeured version of reality.
Krugman is like the rest of the ruling class, who constanly think their brand of Keynesian socialist economics is the guiding light because government always works in their favor and screws over the little guy.
The guy can’t wait for inflation to hit.
Rank disinformation from a butt boy for the Fed.
Recession ….’Economy slows down’
Depression….’Economy breaks up’
.
THIS IS A FULL FLEDGED DEPRESSION
Many of my friends above have failed to notice the two most pregnant sentences in Krugman’s overall comments:
1- “I do believe that full recovery is at least two years and probably more than that off.”
followed by:
2- “I have no confidence this is going to happen.”
For my part, as I watch the bansksters pig out at the public trough, repeat their orgiastic manipulation of worthless fiat money at the expense of what’s left of the commonwealth, and behave like desperadoes (which they are) in an ultimate last run at the brass ring, I’ll go with number 2.
I’ll go even further and agree fully with Gerald Celente that we are already in a Second Great Depression [ http://www.trendsresearch.com/index.htm ] from which the elites basking in their cesspool of corruption
will try to escape, à la Goldman Sachs, by any and all means … even if it means another planetary holocaust.
America, where one can gain 300 lbs during a depression. Lol, there’s not going to be any depression, quit festering over yout worthless trinkets.
Green Shoots Krugman.
Anderson Baldwin Carter Choate Clemente Gonzalez Gravel Kaptur Kucinich McKinney Nader Paul Perot Sheehan Ventura
Future of a Nation that can not trust the Government & Propaganda Media?
DNC & RNC have sold out the country in order to enrich themselves
Chronic lying as career path, intellectual prostitution for paycheck
Fool me once shame on you, fool me twice shame on me
Does the Government & Propaganda Media lie to you?
Wall Street Bailout Bill: Bush McCain Obama et al.
AIPAC 9/11 Bankers Extortion Blackmail Bribery
Independents agree on more than we disagree
Elite Ruling Class Greed or public servants?
Speak no evil, hear no evil, see no evil
Honesty compassion conscience guts
Both parties are corrupt to the core
Beware the divide and conquer
Whistle-Blower leaks multiply
A very RawStory on PressTV
InfoWars on a PrisonPlanet
Israel-first dual-nationals
Gung-ho Chickenhawks
JFK RFK MLK Malcolm
Anthrax Intimidation
Left and rights of passage
Black and whites of youth
Who can face the knowledge
That the truth is not the truth?
Obsolete
Absolute
A depression HAS been avoided. And most of the stimulus money hasn’t even been distributed yet.
I’ve been reading Krugman’s columns for years and I’d trust him over Geithner.
This doesn’t change the fact that people are suffering, and that the capitalist system we live under is corrupt and only works well for the wealthy. As far as I’m concerned, anyone who voted Republican has no right to complain. At least the Dems are working to fix the mess the GOP got us into. John McCain still thought the economy was okay last September. Imagine where we’d be if that dope had been elected. Of course the economy was okay for John McCain or for anyone who can’t even remember how many homes they own.
once you understand what money is and why it can’t be printed to spend our way to prosperity then you can understand this is not a republican or democrat issue.
Wow. I expect morons like these posters above you on the Drudge Report, but it looks like the brainless wonders have infiltrated all aspects of society now. Did anyone even read the article? Or i guess you don’t know much about economics as job losses don’t mean the economy is getting worse. There is so much more that goes into an economy, except all anyone wants to harp on is jobs. Job creation in the first depression didn’t happen overnight and historically job losses continue well into the recovery phase. We’ve been in this thing for two years now and the worst is definitely over.
Last year it was the morons claiming the Illegal Aliens “Took ur Jobz!”, now it the same lazy idiots who can’t get a job claiming “It’s all Olbama’z fault.” Oh yeah and I’m without a job right now, but i’m not freaking out as unemployment + my saving account is getting me by. I guess living above your means America has finally caught up to you!
Spot on Iotas and Savanster, spot on. I believe that we are in Depression 2.0, it’s in the bottom of the 2nd inning. The reason that the market is doing so well is that all that govt. money dolled out ot companies and such has to go somewhere, might as well buy up parts of the stock market (it’s not like they are going to have to pay it back now will they). Also with the job rate going down (and always always being revised a few months later down) is because more people are losing anymore of their unemployment money, so their being dropped from the rolls. Also since this is U3 unemployment (which is massaged), the U6 numbers have unemployment as 16 to 18 percent. The only time you hear about the U6 numbers is on the internet but never on CNBC or CNN. It’s because they are told never to mention those numbers. We are still at the cusp of the alt-prime implosion (remember those people that could afford those houses but lost their jobs and/or where so stretched cant afford those homes), the shadow inventory that banks are keeping from the market because it can destroy the price of there homes, the commercial properties, the Treasury and especially the municipal bond implosion, dollar implosion and the future liabilities (SS, Medicare/Medicaid, Pensions-both federal and state, etc.).
We have only begun and it will go extra innings you can believe that in Depression 2.0.