Thursday, March 31, 2011
The Title Says It All
If you haven’t looked over at the blogroll on the right side of the page, you probably haven’t seen Robert Reich’s new blog yet.
The Truth About the Economy that Nobody In Washington Or On Wall Street Will Admit: We’re Heading Back Toward a Double Dip
”But isn’t the economy growing again – by an estimated 2.5 to 2.9 percent this year? Yes, but that’s even less than peanuts. The deeper the economic hole, the faster the growth needed to get back on track. By this point in the so-called recovery we’d expect growth of 4 to 6 percent.
Consider that back in 1934, when it was emerging from the deepest hole of the Great Depression, the economy grew 7.7 percent. The next year it grew over 8 percent. In 1936 it grew a whopping 14.1 percent.
Add two other ominous signs: Real hourly wages continue to fall, and housing prices continue to drop.”
In case it’s not hitting you, he and Krugman have been right all along. The stimulus was too small, we didn’t focus on creating jobs like we should have (too much stimulus went to tax breaks instead of something like a new WPA) and we’re headed for a “lost decade” just like Japan suffered through.
Speaking of which, another idea that I’ve been too chicken to go out on a limb and write about...Japan’s triple disaster (earthquake, tsunami, radiation leaks) may be what winds up turning Japan around. Japan will be forced to spend huge sums on infrastructure -- even if it has to borrow the money. The status quo will change.
I didn’t suddenly get brave about writing of things outside my area of expertise. I was just reading Time. If a Japanese economist can think it, then I guess I’m not too far off base.
”"Often it takes a huge crisis to make a society change," says Toshihiko Hayashi, an economics professor at Doshisha University in Tokyo, who has studied the legacies of natural disasters. "For Japan, even two lost decades after the bubble burst were not enough to fundamentally change the country's economic and political systems. But this crisis is different. It could be the catalyst that finally changes Japan.””
The question is, what will it take for America to change? Hopefully, it won’t take another World War. And, no, I’m not the only one to have that thought either.
March 11, 2011