Paul A. Samuelson
On the Road to Economic Recovery (c) Drew Sheneman
The latest word from the U.S. Federal Reserve is that already or soon, our overall economy will cease to be falling. Instead, it will stabilize.
What does this not mean? This says nothing about how fast America will move back up toward the 2008 level where it had been before the recession meltdown.
Indeed the Fed itself and the majority of the consensus forecasters fear that this expected recovery might be a weak one that does little to reduce
That would mean that at the global level there might not be the replay of the old-time drama in which the American locomotive comes to the rescue of depressed economies.
Once upon a time, when America produced almost half of total global output, it was appropriate to concentrate mostly on America's role vis-a-vis the rest of the world. Those days are gone forever.
The lack of exact predictability of economic history is what makes it so intriguing to macroeconomic scholars like me. Here is one dramatic example. Both
Who expected that from two societies whose workforce toiled so few days per year, and which have had to cope with powerful trade unions?
When relatively good economic performance occurs in
One might be tempted to think that the French and German locomotives would pull up the rest of the
Let me guess what 2010 and 2011 might be like, globally and in the U.S.
First, maybe at even odds, the recoveries here and abroad could be strong -- just as they used to be normally, and particularly at the end of the stagflation of the 1970s.
Such a strong outcome would vindicate the unorthodox stimulus spending by central banks and treasurers against the old advice of "don't interfere" of 1929-1933 President
Yes, the old-time independence of the central bank, espoused by Federal Reserve Chairman
But turn now to the possibility of a plateau during which there persists a chronic slump. A good example is
The Obama economic team could not tolerate that gloomy scenario. Once again new rescue funds would have to be resorted to.
Are such acts of desperation free of future inflation pressures? Of course not. Somewhere down the line energy prices might spike upward. In the 2010-2015 epoch,
What can be the final verdict of an informed jury of voters and government officials?
Realism compels me to report that there are no sure outcomes. Now, as always, painful tradeoffs are inevitable. As a patriotic citizen I am thankful that the tragic mistakes of 1929-1933 have been avoided in this terrible time of genuine distress.
Divine Debt Trumps All
Victor Davis Hanson
In modern America, debt -- whether national, state or trade -- now plays the same overarching role as the ancient Greek notion of fate. And the president, Congress and the states for all their various agendas are impotent since they must first pay back trillions that have long ago been borrowed and spent.
Joseph Stiglitz Left's Favorite U.S. Nobel Economist
U.S. Nobel laureate Joseph Stiglitz has become a sort of rock star in left-of-center Latin American countries for his vocal criticism of free-for-all capitalism. But in a wide-ranging interview, he offered some advice that many of his fans in the region may not want to hear.
The Dollar's Fate, in the Longer Term
There is a most interesting debate going on at present in the academic community about the longer-term fate of the U.S. dollar as the supreme reserve currency for foreign-exchange transactions and, more importantly, for the currency holdings of national governments, global companies and the producers of oil, gas and other raw materials.
(c) 2009 PAUL SAMUELSON