In the cover story of the upcoming March/April issue of the Washington Monthly, economist James K. Galbraith makes the case for a much darker picture of what's in store. He begins by questioning an assumption held by nearly all modern economists, including those around Obama: that economies are naturally self-stabilizing, and therefore that economic slumps can be righted with relatively modest, short-term nudges from government. That idea fits the experience of every post-War recession. But what if the current crisis is less like those downturns and more like the Great Depression, when the economy famously failed to return to normal?
Thursday, March 19, 2009
Washington Monthly asks the question that I've been postulating: