Posted on 01/05/2010 9:37:26 PM PST by TigerLikesRooster
Krugman: American Economy Will Not Recover for a Long Time
Submitted by George Washington on 01/05/2010 15:59 -0500
Japan Krugman Paul Krugman recovery
Last week, Pimco's CEO said that he doesn't think we'll have a v-shaped recovery, and that economists, advisors and managers who have been counting on a v-shaped recovery are ignoring the economic fundamentals in our economy.
Now, Paul Krugman is agreeing:
Plunging prices of houses and CDOs ... don’t produce any corresponding macroeconomic silver lining. ... This suggests that we’re unlikely to see a phoenix-like recovery from the current slump. How long should recovery be expected to take?
Well, there aren’t many useful historical models. But the example that comes closest to the situation facing the United States today is that of Japan after its late-80s bubble burst, leaving serious debt problems behind. And a maximum-likelihood estimate of how long it will take to recover, based on the Japanese example, is ... forever. OK, strictly speaking it’s 18 years, since that’s how long it has been since the Japanese bubble burst, and Japan has never really escaped from its deflationary trap.
This line of thought explains why I’m skeptical about the optimism that’s widespread right now about recovery prospects. The main argument behind this optimism seems to be that in the past, big downturns in the world’s major economies have been followed by fast recoveries. But past downturns had very different causes, and there’s no good reason to regard them as good precedents
(Excerpt) Read more at zerohedge.com ...
Ping!
Watch next week for Krugman to insist (again) that we have turned the country. In two weeks time, he’ll once again say we’re screwed. Then he will repeat the pattern.
It would be helpful to examine the success of his past predictions.
Watch next week for Krugman to insist (again) that we have turned the corner in the economy. In two weeks time, he’ll once again say we’re screwed. Then he will repeat the pattern.
I wasn’t aware that there were any!
They follow his suggestions and it will never recover.... I don’t know how the man got his degrees in economics... perhaps the Soviet Union.
Yep, wonder if he has a day and month in those 18 years pegged as well?
yup
He could be right...the baby bubble is done
the NASD has been dead for 10 years now
Actually I was very bearish on the economy until I heard krugman had the same opinion. No doubt though he will be calling for a second ‘stimulus’ package and a cap and trade bill to create ‘green jobs’.
Global bear rally will deflate as Japan leads world in sovereign bond crisis by Ambrose Evans-Pritchard
More than 100 civil British replies to this article.
yitbos
The world economy consists of small companies like mine. Whoever the politician is we find a way to create and succeed around their disastrous ideas.
Look at history and tell me when these political douchebags ever controlled anything longer then 20 years.
Especially because he has such cute dimples. But seriously, the banks in this country are totally insolvent and are carrying huge amounts of bad paper.
The entire system is in default, but the elites can't face the fact that the meek will inherit the earth.
You overestimate demand in the U.S. It is collapsing, and taking the supply chain with it. This is all very much part of Mellonesque liquidation, which is proceeding apace (come to San Francisco, where I am, and watch it in action). Very interesting. You'll get an overthrow of the U.S. government as this liquidation process continues. Not sure which general, though, will take the helm. Also, look for an interesting leap from the shadows: Rezko implicates Obama. Yes, Tony is showing up at the U.S. attorney's office every day, just as he has since February. Don't think Fitz has forgotten the 2003 Planning Board legislation. John Ryskamp
In just one year, Obama/Rahm/Reid/Pelosi have set us up for epic failure.
National debt is staggering
Middle class being systematically wiped out
Recovery? Not with these gangsters in power.
(I miss the old NASDAQ days when I could short CMGI, Stamps.com and JDSU Uniphase ;-)
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