Though we may question why the mainstream media has chosen this particular moment to begin using the ‘D’ word, Krugman is of course correct that a depression is coming. What else can we expect when, clearly, influential global banks pumped and dumped the equity and real estate markets in 2008 by injecting them with a vicious cocktail of fraudulent weaponized paper? And when they’ve been similarly euthanizing nations and their currencies by rebundling the debt from 2008 and monetizing it via the ‘stimulus’ Krugman is so fond of?
The only choices left to those of us who don’t own private islands and are trapped aboard this careening engine are to stoke the boilers, slam down the accelerator, and try to pump up a global currency bubble to push the greatest debt explosion in recorded history off to the next generation – or slow it down, pull onto a side rail, and effect repairs. And what would be the best way to do that? By defaulting on the sovereign debt, letting the global central banks and their handlers burn (good riddance Goldman Sachs, JP Morgan et al), and moving to decentralized, market-driven commodity monetary systems that preserve wealth and which, intrinsically, make it hard for those who would be King to raise funds for wars and inflate away our livelihoods.
Of course the G20 got it wrong. While their solution isn’t as bad as Krugman’s suicidal Keynesianism, all they’ve elected to do is slow the infernal machine down to let the boiler cool before, once again, throwing fuel on the fire. Of course this turns a blind eye to the root cause of the problem, shears the populations of the world to enrich the responsible institutions, and sets everything up for the boom and bust cycle to repeat itself yet again. (Assuming we haven’t gone entirely into debt bondage and there’s anything left resembling an economy). Of course it’s a scam, and the first thing people have to do is say: stop this crazy thing, we want to get off.
Related: The End of The Great Bailouts is Approaching | The Real Meaning of ‘Economic Austerity’: IMF/World Bank devastation | Double-dip recession ‘practically inevitable’: UBS | Europe and America Morally and Financially Bankrupt | Terence Corcoran: The rise of global statism | Stimulating our way into debt crises | The Federal Reserve as Giant Counterfeiter | The Keynesian quagmire | Nassim Taleb on the economy: ‘We still have the same disease’ | Statistical Deceptions: How Fake is the “Recovery”? | Headed to National Socialism | The Illustrated Road to Serfdom | Fascist America, in 10 easy steps
Paul Krugman, The New York Times
June 27, 2010
Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.
Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline – on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.
We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost – to the world economy and, above all, to the millions of lives blighted by the absence of jobs – will nonetheless be immense.
And this third depression will be primarily a failure of policy. Around the world – most recently at last weekend’s deeply discouraging G-20 meeting – governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.
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Optimism. More than anything, it was optimism which hung in the air as two thousand people marched through the financial district to St James Park to ‘Occupy Toronto’ this past Saturday. Decamping from the subway to the paved expanse of Commerce Court’s plaza, I was cheered by the sight of a vast crowd that had improbably ventured out on a drizzly mid-October morning. They gathered right at the geographic heart of Canada’s banking center, X marks the spot, King and Bay – it’s not the sort of thing that usually happens in Toronto. But it happened this day, and it was an unprecedented, courageous symbol – watch the video below for a brief walk-though of the day’s events. If nothing else, you had to admire the chutzpah, the obvious joy that was expressed in speaking back to power. And the celebratory mood of the demonstrators was undiminished as they sang and chanted their way up Bay and along Queen to St. James Park, united by a hope that, maybe this time, visibility might drive positive change.
As the Queen and the Duke of Edinburgh start their nine-day Canadian tour, a new poll suggests Canadians are feeling rather listless about the visit and the monarchy in general.
A little-noticed comment in a New York Times interview with Israeli opposition leader Tzipi Livni has critics arguing that it shows the media has a “double standard” when it comes to terrorism.