Monday, October 26, 2009
Is the Recession Really Ending?
My answer is "no" in the San Diego Union-Tribune. I've gotten some hate mail on this one. My favorite so far was a guy telling me to read up on the Great Depression so I'd see the beneficial effects of government intervention. An excerpt:
The government and media analysts should stop talking as if the “success” of these programs [TARP and Obama stimulus] is self-evident. A simple look at the facts suggests that the interventions have been abject failures. Instead of cheerleading a bogus rescue, media analysts should tackle the obvious question: If this weak performance doesn't cause proponents of massive deficit spending and corporate handouts to doubt themselves, what would?
Would a more free-market approach have yielded better results? Americans don't know because neither the Bush nor Obama administrations considered that option. The next administration to tackle a recession should look to the market more than intervention. There is still time for the Obama administration, because the current recession, contrary to news reports, may not be over after all.
Comments:
Dr. Murphy,
Hello. I added a comment to the Horwitz Depression of 1920-21 thread but am worried that you won't check back there since that thread was started a few days ago. Would you mind checking out my comment? Thanks a lot.
Hello. I added a comment to the Horwitz Depression of 1920-21 thread but am worried that you won't check back there since that thread was started a few days ago. Would you mind checking out my comment? Thanks a lot.
# posted by 
: October 26, 2009 at 5:52 AM
: October 26, 2009 at 5:52 AM 
Disbeliever! How dare you question the great and powerful Oz?
# posted by : October 26, 2009 at 9:37 AM
: October 26, 2009 at 9:37 AM
economista,
Sorry I'm really swamped with stuff right now. I can only drop into the comments like a thief in the night. Oops I'm gone again...
Sorry I'm really swamped with stuff right now. I can only drop into the comments like a thief in the night. Oops I'm gone again...
I agree that the recession is not ending.
Can anything be done?
Should anything be done?
I am lucky enough to have a job still and get on the train where our representives like to shake hands and ask for votes. So I get to talk with them.
Here is my question.
How is the middle class going to compete with India, China and the rest for jobs.
Outscourcing is a good business plan.
But as the middle class wages shrink so does the US economy. There is no magical way to equalize the downward movement of the middle class wage.
So what do we do?
They do not know?
What do you say?
Bye the way, that is not exactly what I say to them. but I hope I at least phrased the question right.
Can anything be done?
Should anything be done?
I am lucky enough to have a job still and get on the train where our representives like to shake hands and ask for votes. So I get to talk with them.
Here is my question.
How is the middle class going to compete with India, China and the rest for jobs.
Outscourcing is a good business plan.
But as the middle class wages shrink so does the US economy. There is no magical way to equalize the downward movement of the middle class wage.
So what do we do?
They do not know?
What do you say?
Bye the way, that is not exactly what I say to them. but I hope I at least phrased the question right.
Brian, read a book from Steven Landsburg. Both "Armchair Economist" and "More Sex Is Safer Sex" address that specific question, among many other basic economic questions, in intuitive and hilarious detail. Our own Bob Murphy's PIG Capitalism addresses that point as well in similar light fashion.
# posted by : October 26, 2009 at 1:06 PM
: October 26, 2009 at 1:06 PM
Did I just misread you Brian? I mean, it seemed to me you were asking whether engaging in foreign trade by itself is beneficial -- to which the answer would be yes duh --, but, on a 2nd read, maybe you're in fact worried whether changes in international trade is what caused the recession.
Folks here would blame the central bank, as would most economists albeit with a different twist, but Greenspan in fact blamed foreign investment. You cited India and China, but AFAIK their share on trade is not considerable. Politicians just like to cater to people's primal prejudices, so they of course will blame those oddly looking Asians.
Folks here would blame the central bank, as would most economists albeit with a different twist, but Greenspan in fact blamed foreign investment. You cited India and China, but AFAIK their share on trade is not considerable. Politicians just like to cater to people's primal prejudices, so they of course will blame those oddly looking Asians.
# posted by : October 26, 2009 at 1:29 PM
: October 26, 2009 at 1:29 PM
not saying I care so much about why?
But what can we do? or is there anything that can be done?
about employment for middle class US?
But what can we do? or is there anything that can be done?
about employment for middle class US?
Paul Krugman, winner of the Nobel Memorial Prize in Economics, has attacked this view, arguing that "One problem capitalism does not suffer from ... is being too productive for its own good."[10].
“ Productivity gains in steel may reduce the number of jobs in steel, but they create jobs elsewhere (if only by lowering the price of steel, and therefore releasing money to be spent on other things); advanced countries may lose garment industry jobs to developing-country exports, but they gain other jobs producing the goods that those countries buy with their new export income. To observe that productivity growth in a particular industry reduces employment in that same industry tells us nothing about whether productivity growth in the economy as a whole reduces employment in the economy as a whole.[11]
So when the economy is global yes.
the jobs are now over there and we are free up to do something else.
I have done that. I was in Labor and now is IT.
What next?
Post a Comment
“ Productivity gains in steel may reduce the number of jobs in steel, but they create jobs elsewhere (if only by lowering the price of steel, and therefore releasing money to be spent on other things); advanced countries may lose garment industry jobs to developing-country exports, but they gain other jobs producing the goods that those countries buy with their new export income. To observe that productivity growth in a particular industry reduces employment in that same industry tells us nothing about whether productivity growth in the economy as a whole reduces employment in the economy as a whole.[11]
So when the economy is global yes.
the jobs are now over there and we are free up to do something else.
I have done that. I was in Labor and now is IT.
What next?
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