When historians look back at this benighted moment in time, they may find themselves puzzled by how we refused to take the necessary steps to improve our economic situation. Depending on what happens in coming months, they may find that the best solutions—aggressive fiscal and monetary stimulus here in the United States, bank recapitalization and debt restructuring in the EU—were left on the table, while millions unnecessarily suffered. A footnote in that history may be the decision of Fannie Mae and Freddie Mac not to do more to help the housing market recover.
It’s all Greece’s fault. That’s what a lot of Europeans secretly—or not so secretly—think as they grumble at the prospect of coming up with yet more money to bail the eurozone out of its debt crisis. But what if that easy view of how Europe landed in its current predicament is not just simplistic, but wrong? Nonsense, argue the grumblers. Clearly the crisis started because debt in the eurozone’s periphery—Greece, Ireland, Portugal, and Spain—became so large that investors grew frightened that entire countries were at risk of default.
[Guest post by Matt O'Brien] It is better than zero. That is about the best that can be said about the September jobs report, on the heels of last month's numbers that showed precisely zero jobs added in August.
[Guest post by Matt O'Brien] Last week, as the Obama administration rolled out its American Jobs Act, a liberal group called the Progressive Change Campaign Committee launched a strange ad campaign of its own: “[Obama economic advisor] Jason Furman wants you to work for free,” the ads blasted.
The centerpiece of the jobs plan unveiled by President Obama Thursday night—the extension and expansion of payroll tax cuts to employees totaling $175 billion—has turned out to be among its most controversial aspects. Indeed, policymakers and commentators from across the political spectrum have argued that its stimulative effects could be negligible.
In his book The Greatest Generation, Tom Brokaw paid homage to the generation that emerged from the Great Depression to fight Hitler and other forms of tyranny. Their efforts were all about sacrifice so that their children could enjoy a better life.
With Congressional Republicans blocking any further fiscal stimulus, it falls on the Federal Reserve to do what it can to reduce unemployment. Those opposed to the Fed doing so express concern that it would spark inflation. We should be so lucky. A moderate increase in inflation, contrary to the overblown fears of inflation-hawks, would be a boon to the economy.
This article is a contribution to 'Is There Anything That Can Be Done? A TNR Symposium On The Economy.' Click here to read other contributions to the series. As the Great Recession drags on and on, it’s natural to wonder if we will ever get back to normal. Why is the recovery from this recession taking so long? Why was the recovery from other severe recessions, for example the 1982 recession where unemployment reached 10.8 percent, so much faster?
This article is a contribution to 'Is There Anything That Can Be Done? A TNR Symposium On The Economy.' Click here to read other contributions to the series. There are two facts about our current economic situation that can no longer be denied: Our economy is in desperate need of government stimulus, and our political system won’t abide any increase in our national deficit. Taken together, the two points seem to bode poorly for the United States. But we shouldn’t be too quick to assume a contradiction.
This article is a contribution to 'Is There Anything That Can Be Done? A TNR Symposium On The Economy.' Click here to read other contributions to the series. Most adults know that there is no Santa Claus. They should also know that there was no stock market crash associated with Standard and Poor’s downgrade of U.S. government debt. However, because powerful interests want to spread misinformation about the downgrade, people are likely to be much better informed about Santa Claus.