Listen to the news or read the press and the economic news - be it job-losses, downturns in the market or company profits going through the floor - can only be described as dire and despairing.
A critical question being asked is when will it all end given governments around the world trying this or that to stimulate economies or perhaps just keep things in a holding-pattern. Bottom line no one seems to know or have any definitive answers.
Nobel prize winner [for economics] Paul Krugman, who writes for the NY Times and IHT, tries to put things into some context and to address the critical question "What will end the pain?"
"Earlier this week, the Federal Reserve released the minutes of the most recent meeting of its open market committee - the group that sets interest rates. Most press reports focused either on the Fed's downgrade of the near-term outlook or on its adoption of a long-run 2 percent inflation target.
But my eye was caught by the following chilling passage (Yes, things are so bad that the summarized musings of central bankers can keep you up at night): "All participants anticipated that unemployment would remain substantially above its longer-run sustainable rate at the end of 2011, even absent further economic shocks; a few indicated that more than five to six years would be needed for the economy to converge to a longer-run path characterized by sustainable rates of output growth and unemployment and by an appropriate rate of inflation."
So people at the Fed are troubled by the same question I've been obsessing on lately: What's supposed to end this slump? No doubt this, too, shall pass - but how, and when?
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 father's recession was something like the severe downturn of 1981-1982. That recession was, in effect, a deliberate creation of the Federal Reserve, which raised interest rates to as much as 17 percent in an effort to control runaway inflation. Once the Fed decided that we had suffered enough, it relented, and the economy quickly bounced back.
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."
A critical question being asked is when will it all end given governments around the world trying this or that to stimulate economies or perhaps just keep things in a holding-pattern. Bottom line no one seems to know or have any definitive answers.
Nobel prize winner [for economics] Paul Krugman, who writes for the NY Times and IHT, tries to put things into some context and to address the critical question "What will end the pain?"
"Earlier this week, the Federal Reserve released the minutes of the most recent meeting of its open market committee - the group that sets interest rates. Most press reports focused either on the Fed's downgrade of the near-term outlook or on its adoption of a long-run 2 percent inflation target.
But my eye was caught by the following chilling passage (Yes, things are so bad that the summarized musings of central bankers can keep you up at night): "All participants anticipated that unemployment would remain substantially above its longer-run sustainable rate at the end of 2011, even absent further economic shocks; a few indicated that more than five to six years would be needed for the economy to converge to a longer-run path characterized by sustainable rates of output growth and unemployment and by an appropriate rate of inflation."
So people at the Fed are troubled by the same question I've been obsessing on lately: What's supposed to end this slump? No doubt this, too, shall pass - but how, and when?
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 father's recession was something like the severe downturn of 1981-1982. That recession was, in effect, a deliberate creation of the Federal Reserve, which raised interest rates to as much as 17 percent in an effort to control runaway inflation. Once the Fed decided that we had suffered enough, it relented, and the economy quickly bounced back.
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."
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