The Great Recession Blog

Here are the points you might want to take home with you from last week’s news. First, the stock market is not indicative of where the economy is going. For part of the week it was jumping up, and for part of the week, it was stomping down. Which part would indicate where the economy […]

When someone says we don’t need banking and Wall Street regulations because capitalism will correct itself, it’s like saying we don’t need a guard rail at the top of the cliff because the bottom will stop the car just fine. We have financial regulations because capitalism rights itself with a severe hand. Regulations are intended […]

I’m going to start posting a weekly recap of the economic news headlines. These headlines of news articles and their summaries come and go from the sidebar, so not everyone sees them on the particular day they tune in. This is a chance to make sure you didn’t miss any of the major economic news […]

Apparently, experts never learn. Larry Summers writes: “The central irony of financial crisis is that while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending.” (The Financial Post) What he really means is […]

The economy collapsed into a great recession because it was fundamentally flawed in the first place. The U.S. housing market, which underpinned the old economy, boomed because the government deregulated banks. The deregulation that began with Reagan widened under George Bush the First. It widened a little more under William Jefferson Clinton, and it broadened even further […]

News of the housing market collapse hit hard at the beginning of spring on March 23rd, 2011 because reporters had spent the winter months with their heads in the tropics so missed the winter chill. All winter the media experts reported the good news that their vaunted industry experts fed to them like peeled grapes in […]

At the start of the fourth year of the Great Recession, people were ready to hear good news, and the press glibly passed along any ray of sunshine they could find without ever questioning it. Here is one example.   On January 28th, 2011, I wrote the following observation to my friend Stan about the […]

The Congressional Budget Office recently announced that the United States will be running its first trillion-dollar deficit this year — $1.2 Trillion if we count the pocket change. That’s about three times more than it’s been in any other year. Most Americans seem ready to agree with congress that this is necessary in order to […]

During the winter of our discontent, which was January and February of 2008, the Bush administration fiddled as the U.S. was falling. While the Gurus of Government played happy music on their violins, singing that the economy was “fundamentally sound,” I was telling friends that we had entered a recession that had all the makings […]