Mercury Rising 鳯女

Politics, life, and other things that matter

Turning The Corner

Posted by Phoenix Woman on May 5, 2009

Kimberly over in the comments section of The Field pointed this out:

From Krugman’s latest piece:

“Credit where credit is due: President Obama and his economic advisers seem to have steered the economy away from the abyss.”

I remember just a couple months ago where he said Team Obama was ‘killing us all’ with their ‘dithering’

Nouriel Roubini (Dr Doom) is more objective imo- he said in Newsweek that he no longer fears and L-shaped near depression, he now thinks we’re in the middle of U-shaped recession. He said the Obama Admin deserves credit for their aggressive policy action. The worst has been averted.

What’s interesting to me is how different the outlooks of Krugman and Roubini are. Krugman, as mentioned above, did admit (but only after a few hundred words of general balefulness) that the economy does seem to have been steered away from the abyss; however, he thinks that we’re in for a Japanese-style L-shaped stagnant recovery, whereas Roubini, the guy who is the one usually known as “Dr. Doom”, thinks that we’re about halfway through a U-shaped recession that, while “deep and protracted”, will be markedly on the wane, if not over, by this time next year.

3 Responses to “Turning The Corner”

  1. perris said

    hey pw, I keep clicking on campaign silo to see if there’s an update or story from you, none to be found so I came here to have a gander

    love your digs

  2. Charles II said

    PW, I think you’re misreading this. It comes down to GDP vs. “the economy.” It is very possible to have rising GDP and yet for unemployment to be high, for cities and states to be struggling just to provide basic services, and for there to be mass homelessness and hunger. The U-shape that Roubini is describing relates to GDP. As for how the nation as a whole is feeling, it may well feel like an L.

    Roubini is warning that the future is compromised, that corporate defaults will rise to astonishing levels, and that home prices will keep falling for a long time to come. He also warns that there are significant downside risks, meaning that the worst could yet come to be. An additional severe shock from, for example, war, a 1918-style epidemic, a panic in the bond markets… any of these could yet trigger a full-on Depression.

    What is true is this: if the Republicans had had their way, we would already be in a Depression with no way out. Obama, simply by virtue of not being a free-market extremist, has taken steps that have slowed the rate of descent and therefore probably reduced the damage to the real economy.

    I expect that what we think of as the American life will undergo a significant, lasting transformation, with a long-term contraction in the middle class, a decline in consumerism, a decline in home ownership and small business… it’s these things that I don’t see that Obama has (at least so far) prevented.

  3. Mark Gisleson said

    And as I’ve been arguing for a while at my blog, it could well be that the entire world economy is being held together right now by little more than good thoughts and some quiet backroom collusion among the major powers.

    Technology is burying capitalism faster than the capitalists can bury technology. How do you maintain a profit-driven system when information can now be digitalized and distributed to infinity? Our multinationals have only one solution: to suppress distribution through criminalization. In effect, they’re trying to impose feudalistic economic justice in a Star Trek universe.

    We’re barely scratching the surface of what computers and robots can do for us. And machines that can build machines are taking us to another level entirely. How do you keep things monetized when the cost of manufacturing keeps plummeting? And when custom on-demand production is already here for some industries?

    It would not surprise me if before Obama’s second term is over, the world economy isn’t radically transformed into something quite different from what we have now.

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