An antidote for those of us guilty of slipping into sunny optimism… George Washington at Naked Capitalism makes the case that where we are now is worse than the Great Depression. This is how the hefty, link-filled post begins:
The following experts have – at some point during the last 2 years – said that the economic crisis could be worse than the Great Depression:
- Fed Chairman Ben Bernanke
- Former Fed Chairman Alan Greenspan (and see this and this)
- Former Fed Chairman Paul Volcker
- Economics scholar and former Federal Reserve Governor Frederic Mishkin
- The head of the Bank of England Mervyn King
- Nobel prize winning economist Joseph Stiglitz
- Nobel prize winning economist Paul Krugman
- Former Goldman Sachs chairman John Whitehead
- Economics professors Barry Eichengreen and and Kevin H. O’Rourke (updated here)
- Investment advisor, risk expert and “Black Swan” author Nassim Nicholas Taleb
- Well-known PhD economist Marc Faber
- Morgan Stanley’s UK equity strategist Graham Secker
- Former chief credit officer at Fannie Mae Edward J. Pinto
- Billionaire investor George Soros
- Senior British minister Ed Balls
Charts, too. This one from Calculated Risk shows that this is not a normal spike in unemployment:
This one on inequality:
And this, scariest of all, from Casey Research in 2008, to illustrate how $8.5 trillion dollars compares with the cost of all major conflicts and programs initiated by the US government since its inception:
I hardly have the skills to parse the implications and meaning or dispute the conclusion that “the government is doing the wrong things to address the downturn.” You can help. Read the post and share your thoughts in comments.