Saturday, October 1, 2011

Premature Abandonment

Here is a great quote from a speech by Adam Posen.  It is in an opinion piece by Paul Krugman, which is definitely worth a read:

"Both the UK and the global economy are facing a familiar foe at present: policy defeatism. Throughout modern economic history, whether in Western Europe in the 1920s, in the US and elsewhere in the 1930s, or in Japan in the 1990s, every major financial crisis-driven downturn has been followed by premature abandonment—if not reversal—of the macroeconomic stimulus policies that are necessary to sustained recovery. Every time, this was due to unduly influential voices claiming some combination of the destructiveness of further policy stimulus, the ineffectiveness of further policy stimulus, or the political corruption from further policy stimulus. Every time those voices were wrong on each and every count. Those voices are being heard again today, much too loudly."

Let me once again state the obvious- a point that Krugman makes over and over again.  There is absolutely no question what we (i.e. governments) need to do to ease the current economic crisis.  Unfortunately, those actions do not suit the interests of the hyper-rich, who believe they can make so much money in the short term that a severe collapse of the economy won't hurt them personally, and who are sociopathically indifferent to the fate of the rest of us.  These people have the resources to hire Very Serious People to to spout their cant, and to marginalize anyone who won't play along with them; the result being that they get their way, and the non-rich are forced to pay the price.


Dave Dubya said...

There's no doubt it will come down to austerity for the masses and/or utter economic collapse. And when it happens, corporate media will be about as objective as they were during the war fever frenzy before the war on Iraq.

Corporate media cannot, and will not, fault the Right or the corporate interests for their actions.

Hmm. I wonder why...

Octopus said...

The cephalopod's warning about what banking and sex have in common:

There's always a penalty for premature withdrawal.