Friday, March 21, 2008

Vicious circle of financial contraction


Paul Krugman didn't just now say this for the first time. He has been making the point of our willful forgetting for years.

I made it, too, last week and also not for the first time.

American economic power is already under threat. The consequences of a deep worldwide recession - or a bona fide depression - are too unpredictable to be sure of, but the Great Depression did these things:

  • Stoked extreme ideologies on the left and the right
  • Led to WWII
  • Killed people with poverty
  • Moved the economic center of the world (from Europe to the U.S.)
I'd venture a guess that we in the U.S. don't want any of these things to happen again, but we haven't acted that way since the 1970s.

Image in the public domain.

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