Tuesday, August 03, 2010

So Far, So Good

Paul Krugman says that the guys in charge -- the administration, Congress and the Fed -- seem to have decided 10% unemployment is okay, and we can just let the economy perk along at the current speed.

The question is, can it continue at the current speed? Or will it move more or more slowly, descending into an ever deeper recession?

Or will there be more speculative bubbles like the 1990s tech bubble and the recent weird financial instruments bubble that blew up in 2007-2008?

We might have both, a slowly shrinking "real" economy, with speculative bubbles swelling and exploding on top, threatening to destroy the world banking system each time they pop...

I posted this on facebook a day or so ago:
Eleanor Arnason has had a slow, low energy day. She has depressed herself by reading political and economic blogs; and she suddenly realized what current political and economic news reminds her of: the story of the guy who falls off the top of the Empire State Building; and as he's passing the second floor, someone in an office with an open window hears him say, "So far, so good."
See post above.


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