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Depression Economics

If you want to take a break from the cabinet psychodrama, and read a good piece on the current downturn, I recommend Jamie Galbraith's contribution to a National Journal symposium on deficits. Jamie doesn't dismiss the administration's stimulus program--he calls it a "good start"--but he thinks that it, and the administration's expected intervention in the financial system, will prove wanting. His argument comes down to a disagreement about the nature of the downturn--whether it is an ordinary, if severe, recession, as the admnistration appears to believe, from which the usual measures will extricate us, or something like the Great Depression that will require a much larger stimulus and, one would assume, more aggressive approach to reviving banking.

--John B. Judis