Breaking!!! Leading Keynesian Calls Economic Downturn “Depression”!!!!


Brad DeLong ….. from Wiki

James Bradford DeLong (born June 24, 1960) commonly known asBrad DeLong, is a professor of Economics and chair of the Political Economy major at the University of California, Berkeley. He served as Deputy Assistant Secretary of the United States Department of the Treasury in the Clinton Administration under Lawrence Summers. He is also a research associate of the National Bureau of Economic Research, and is a visiting scholar at the Federal Reserve Bank of San Francisco.[1]

Along with Joseph Stiglitz and Aaron Edlin, DeLong is co-editor of The Economists’ Voice,[2] and has been co-editor of the widely read Journal of Economic Perspectives. He is also the author of a textbook,Macroeconomics, the second edition of which he coauthored with Martha Olney. He writes a monthly syndicated op-ed column for Project Syndicate.

As an official in the Treasury Department in the Clinton administration, he worked on the 1993 budget, on the Uruguay Round of the General Agreement on Tariffs and Trade, on the North American Free Trade Agreement, on the unsuccessful health care reform effort, and on other policies.

Among some, his economic views are well respected.  Not mine, mind you, but, among some.  So, I was a bit surprised to see this ….. one of his recent articles …..

The Greater Depression

It’s worth a read, and I’ll highlight some, and then show you some typical leftarded unfathomable stupidity, he wrote.  And, then, some rather alarming news …..

BERKELEY – First it was the 2007 financial crisis. Then it became the 2008 financial crisis. Next it was the downturn of 2008-2009. Finally, in mid-2009, it was dubbed the “Great Recession.” And, with the business cycle’s shift onto an upward trajectory in late 2009, the world breathed a collective a sigh of relief. We would not, it was believed, have to move on to the next label, which would inevitably contain the dreaded D-word.

But the sense of relief was premature. Contrary to the claims of politicians and their senior aides that the “summer of recovery” had arrived, the United States did not experience a V-shaped pattern of economic revival, as it did after the recessions of the late 1970s and early 1980s. And the US economy remained far below its previous growth trend.

Indeed, from 2005 to 2007, America’s real (inflation-adjusted) GDP grew at just over 3% annually. During the 2009 trough, the figure was 11% lower – and it has since dropped by an additional 5%.

The situation is even worse in Europe. Instead of a weak recovery, the eurozone experienced a second-wave contraction beginning in 2010. At the trough, the eurozone’s real GDP amounted to 8% less than the 1995-2007 trend; today, it is 15% lower. ……

By 2011, it was clear – at least to me – that the Great Recession was no longer an accurate moniker. It was time to begin calling this episode “the Lesser Depression.”

Well, at least he got that part right. 

But, then, he slips into Draghi type insanity ….. mostly by parroting Draghi!

But the story does not end there. Today, the North Atlantic economy faces two additional downward shocks.

The first, as Lorcan Roche Kelly of Agenda Research noted, was discussed by European Central Bank President Mario Draghi while extemporizing during a recent speech. Draghi began by acknowledging that, in Europe, inflation has declined from around 2.5% in mid-2012 to 0.4% today. He then argued that we can no longer assume that the drivers of this trend – such as a drop in food and energy prices, high unemployment, and the crisis in Ukraine – are temporary in nature.

In fact, inflation has been declining for so long that it is now threatening price stability – and inflation expectations continue to fall. The five-year swap rate – an indicator of medium-term inflation expectations – has fallen by 15 basis points since mid-2012, to less than 2%. Moreover, as Draghi noted, real short- and medium-term rates have increased; long-term rates have not, owing to a decline in long-term nominal rates that extends far beyond the eurozone.

Do you see what he did there?  He quotes Europe’s inflation rate, going from 2.5% to 0.4%.  And, then he says this threatens price stability!!!!

This leads me to wonder if Brad thinks 0% inflation means we have unstable non-changing prices?  What’s more “stable”?  0.4% increases in inflation or 2.5%?  …….  Dumbass. 

But, he then has this to say, in which I entirely concur.  But, then, it’s been rather obvious for some time now.

……. The pretense that the eurozone is on a path toward recovery has collapsed; the only realistic way to read the financial markets is to anticipate a triple-dip recession.

But, here’s some rather shocking news …..

Meanwhile, in the US, the Federal Reserve under Janet Yellen is no longer wondering whether it is appropriate to stop purchasing long-term assets and raise interest rates until there is a significant upturn in employment. Instead, despite the absence of a significant increase in employment or a substantial increase in inflation, the Fed already is cutting its asset purchases and considering when, not whether, to raise interest rates.

Any meaningful rise in our interest rates will send the US spiraling even further down the economic toilet.   There can be absolutely no justification to raising the interest rates.  We only do that when we’re concerned about the economic over-heating.  That’s simply not a problem at this moment, and won’t be any time soon.

h/t Breitbart

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7 Responses to Breaking!!! Leading Keynesian Calls Economic Downturn “Depression”!!!!

  1. philjourdan says:

    Looking for excuses in all the wrong places. Liberals never learn.

  2. DirkH says:

    I think it was Peter Schiff who called it a depression years ago already (and correctly called a depression a deviation from the long term trend). So the Soros guy DeLong took his sweet time to come around. (Project Syndicate is Soros)

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