We're in the Third Depression - Paul Krugman

Paul Krugman won the Nobel Prize for economics, and how he's a op-ed writer for the NY Times. As an economic layman, I don't like his belief that the US and other government should actually spend more (borrow more) to provide more stimulus into the downturn. Here is Krugman, saying something that I've not heard him say before. Economists are sometimes right; sometimes wrong. But now Krugman is saying (with this pessimistic outlook) what Jim Rogers, Nouriel Roubini, Marc Fabar, Peter Schiff, Ankal Fekete, and other top economics are saying: That the outlook (in the west) is grim. [image: http://view.atdmt.com/DWO/view/229641679/direct;pc.137239_231519/01/2010.06.28.10.53.01] (http://www.nytimes.com/adx/bin/adx_click.html?type=goto&opzn&page=global.nytimes.com/yr/mo/day/opinion&pos=TopAd&sn2=135161de/5d3ce413&sn1=717bf42d/43aa1a2e&camp=Nikon_D5000Spring2010-1346529-nyt2&ad=D5000Spring2010.ROS.PreEmpt.atlas728x90&goto=http%3A%2F%2Fclk%2Eatdmt%2Ecom%2FDWO%2Fgo%2F229641679%2Fdirect%3Bpc%2E137239%5F231519%2F01%2F2010.06.28.10.53.01) Op-Ed Columnist The Third Depression By PAUL KRUGMAN (http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/paulkrugman/index.html?inline=nyt-per) Published: June 27, 2010 [image: http://graphics8.nytimes.com/images/2006/04/02/opinion/ts-krugman-190.jpg] Fred R. Conrad/The New York Times Paul Krugman Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31. Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses. We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense. And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending. In 2008 and 2009, it seemed as if we might have learned from history. Unlike their predecessors, who raised interest rates in the face of financial crisis, the current leaders of the Federal Reserve and the European Central Bank slashed rates and moved to support credit markets. Unlike governments of the past, which tried to balance budgets in the face of a plunging economy, today’s governments allowed deficits to rise. And better policies helped the world avoid complete collapse: the recession brought on by the financial crisis arguably ended last summer. But future historians will tell us that this wasn’t the end of the third depression, just as the business upturn that began in 1933 wasn’t the end of the Great Depression. After all, unemployment — especially long-term unemployment — remains at levels that would have been considered catastrophic not long ago, and shows no sign of coming down rapidly. And both the United States and Europe are well on their way toward Japan-style deflationary traps. Link & Entire: NY Times Advertisement (http://www.nytimes.com/2010/06/28/opinion/28krugman.html)

I was in shock when I listened to some of the policy moves of G20 countries at the recent meeting. Wait until Krugman and Stiglitz come out on what was decided there because it's looking nothing short of catastrophic. The countries are focusing only on debt reduction but doing virtually nothing to stimulate future growth, ironically America seems to have the best approach at the moment. Canada, UK and Europe has set on a grave course IMHO[image: http://www.ajarnforum.net/vb/images/smilies/wow.gif] Looks like the future growth areas will be in line with the results of this mess, more prisons, police, credit rating companies, repossession companies, security firms and military.

Quote Originally Posted by Arnold! View Post (http://www.ajarnforum.net/vb/international-news/51214-were-in-the-third-depression-paul-krugman.html#post1421636) Economists are sometimes right; sometimes wrong. You got that part right . . and as the saying goes "Economists have correctly predicted 10 out of the last 6 recessions"

Quote Originally Posted by centermid7 View Post (http://www.ajarnforum.net/vb/international-news/51214-were-in-the-third-depression-paul-krugman.html#post1421666) You got that part right . . and as the saying goes "Economists have correctly predicted 10 out of the last 6 recessions" Most economists are attached to the predicted convention of establishment....including the distinguished Mr. Krugman. Economies are based on fanciful illusion.

He is an idiot. He keeps saying we need to print money and now he says we will have depression. Really genius? Peter Schiff constantly ridicules him on youtube.

The question for me, and I'm sure a lot of others, is, how is this 'third depression' going to impact my life as a TEFL teacher? At least in China, families seem to put education high on the list of priorities, and English is a must for many. The way I see it, as long as English remains the dominant international language, jobs in the TEFL industry will be a somewhat safe, or safer, bet. The downside to this is more people entering the hiring pool, thus making it more difficult to land a 'good' position. I wonder, how many TEFLers are overqualified for what they do? Having to settle for 30K is not going to help long term plans. I guess at the end of the day, the TEFL industry isn't going to change a whole lot.

I don't like Krugamn's opinions. Not at all. Loxley: are you being sarcastic? Please clarify. Sorry, if I don't know if you're serious or not. Debt IMO, is the foundation of the problem. And the bottom of your post I agree with. I have no respect for Krugman.

I'm being serious, this new found imperative of cutting debts at all costs will not only curtail a recovery but is going to cause massive social problems.

Put 3 economists in a room and you will get 5 predictions. [image: http://www.ajarnforum.net/vb/images/smilies/rock.gif] If the problem is debt, then why are we spending so much money in Iraq and Afghanistan? I think the political priorities are skewed somewhat and cutting back on welfare for your citizens in their time of need whilst spending billions blowing up scrubland in Helmand won't go unnoticed. I'm with Lox on the fact that it's the social consequences that are the greatest concern and risk. I think I'll stay in Thailand. [image: http://www.ajarnforum.net/vb/images/smilies/smile.gif]

Yes, if you are reasonably settled in thailand with a job that pays the bills and gives you fun money then its best to wait it all out - sees who is left standing

Quote Originally Posted by Rocksteady View Post (http://www.ajarnforum.net/vb/international-news/51214-were-in-the-third-depression-paul-krugman.html#post1422137) Yes, if you are reasonably settled in thailand with a job that pays the bills and gives you fun money then its best to wait it all out - sees who is left standing [image: http://ajarnforum.net/vb/images/smilies/peepwall.gif] Nope, still dropping like flies, happy hour Tiger anyone?

And the boom continues in Australia...in fact things are so good that there is popular opposition to taxing the super profits of the mining companies! I mean WTF?

Well, Krugman has some things right. I recommend everyone read Thomas Friedman's take on the economy. He is a much better writer at the NY Times having won multiple Pulitzer prizes. His take on both the future of the US, the world in general and the middle-east problems are totally brilliant. His environmental standpoint is particularly good because he is not a crazy green freak type person. He is a practical person that uses logic to explore solutions to problems and not just esoteric economic mumbo-jumbo.

^ With due respect, I don't like Friedman's Op-eds although I have read some of his books on the Middle east and on the global economic situations. I am biased towards Peter Schiff and Austrian school.