OP-ED COLUMNIST A Permanent Slump? By PAUL KRUGMAN Published: November 17, 2013 Spend any time around monetary officials and one word youâll hear a lot is ânormalization.â Most though not all such officials accept that now is no time to be tightfisted, that for the time being credit must be easy and interest rates low. Still, the men in dark suits look forward eagerly to the day when they can go back to their usual job, snatching away the punch bowl whenever the party gets going. But what if the world weâve been living in for the past five years is the new normal? What if depression-like conditions are on track to persist, not for another year or two, but for decades? You might imagine that speculations along these lines are the province of a radical fringe. And they are indeed radical; but fringe, not so much. A number of economists have been flirting with such thoughts for a while. And now theyâve moved into the mainstream. In fact, the case for âsecular stagnationâ â a persistent state in which a depressed economy is the norm, with episodes of full employment few and far between â was made forcefully recently at the most ultrarespectable of venues, the I.M.F.âs big annual research conference. Again, the evidence suggests that we have become an economy whose normal state is one of mild depression, whose brief episodes of prosperity occur only thanks to bubbles and unsustainable borrowing. Why does all of this matter? One answer is that central bankers need to stop talking about âexit strategies.â Easy money should, and probably will, be with us for a very long time. http://www.nytimes.com/2013/11/18/opinion/krugman-a-permanent-slump.html Krugman argues for permanent easy money policy.
when leftist policies fail they act like there is nothing that can help. this is similar to the line of thought that California is ungovernable. Its leftist running up the surrender flag but not taking the blame. Of course there was something we could have done. We could have lowered taxes and created an economic boom. We could eliminate income tax and cap spending. What does not work is increasing taxes in this environment and wasting / spending more govt dollars.
Larry Summers 11/8/13 speech at IMF. http://www.businessinsider.com/larry-summers-imf-speech-on-the-zero-lower-bound-2013-11
first of all the IMF is the FEDERAL RESERVES sister. There is no reaons you going to get the straight scoop from them. Just last month they were advocating asset theft to pay off govt debt. Therefore... of course krugman would call something blindingly obvious from sommers brilliant. How about this... you can't screw with the invisible hand of economics forever... even the FED has to let the market clear and adjust... eventually. That zero lower bounds is a symptom of a really sick patient and really bad doctors. business does not want to start up and consumers do not want to take chances because interest rates are rigged by quantitative easing and could change at any time, obamacare could destroy business, and income taxes are disgustingly high. you want jobs... eliminate the income tax. you want the economy to heal itself and stop the Q E crap. Ideally you would also cap spending.
---What if depression-like conditions are on track to persist, not for another year or two, but for decades?--- most of indexes are at ALL TIME HIGH. it might be depression some place in US,but certainly not in stock market
The value in his article is not in his analysis but in the gossip he reports if what he reports is what he hears, and if what he hears is what people think. As for his analysis, if I were generous, I might give it a grade in the D neighborhood. The people whom I would like to read are those who were on the right side back in 2005. I cannot find their names on the columns.