Recession, or depression? Judge Posner sez . . .


Why beat around the bush?  Judge Richard Posner said at his blog:

I suspect that we have entered a depression. There is no widely agreed definition of the word, but I would define it as a steep reduction in output that causes or threatens to cause deflation and creates widespread public anxiety and a sense of crisis.

He has some interesting, and puckering, things to say about Bernanke’s actions, and Obama’s plans, too. His blogging colleague, Nobel-winning economist Gary Becker, has more tentative, still-Friedmanian remarks about crowding out tendencies of government spending.

It’s fun to read good economists trying to make sense of all of this.

I attended a session at the Dallas Fed a few weeks ago.  The VP who gave the main presentation talked about a meeting in which someone asked Bernanke, the great scholar of depressions, a highly technical, academic and potentially embarrassing question about the Fed’s work.  Bernanke closed off with an eye-twinkling comment:  “This would all be very interesting, if it were not happening to me.”

Yeah, if only it weren’t happening to us, now.

3 Responses to Recession, or depression? Judge Posner sez . . .

  1. […] See the original post: Recession, or depression? Judge Posner sez . . . « Millard … […]

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  2. MC Shalom says:

    Even The Right Monetary and Fiscal Policy Can’t Get Us Out of the Depression

    DIE ZEIT: Can the right monetary and fiscal policy keep the US out of a recession?

    Alan Greenspan:

    “Probably not. Global forces can now override most anything that monetary and fiscal policy can do. Long-term real interest rates have significantly more impact on the core of economic activity than the individual actions of nations. Central banks have increasingly lost their capacity to influence the longer end of the market.

    Two to three decades, ago central banks were dominant throughout the maturity schedule.

    Thus, the more important question is the direction of long-term real interest rates.”

    Alan Greenspan
    The Great Irony of Success
    © ZEIT online, 30.1.2008

    If short-term risk-free interest rates are 0% doesn’t it that mean that credit is worthless?

    A Credit Free, Free Market Economy will correct all of those dysfunctions.

    The alternative would be to wait till, on the long run, most of our productive assets get physically destroyed either by war or by rust.
    It will be either awfully deadly or dramatically long.

    We Need, Hence, to Cancel All Interest Bearing Debt and Abolish Interest Bearing Credit.

    This Age of Turbulence People Want an Exit Strategy Out of Credit,
    An Adventure in a New World Economic Order.

    Exit Strategy out of Credit
    http://edsk.org/

    A Specific Application of Employment, Interest and Money. [For my Fellows Economists]
    http://edsk.org/interest.html

    Press release of my open letter to Chairman Ben S. Bernanke:

    Chairman Ben S. Bernanke, Quantitative Easing Can’t Work!
    http://www.prlog.org/10165667.html

    Yours Sincerely,

    Shalom P. Hamou AKA ‘MC Shalom’
    Chief Economist – Master Conductor
    1776 – Annuit Cœptis.

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  3. Der Kaiser says:

    I know that this site strives to expose hoaxes, but I am awfully tempted to quote the “ancient Chinese curse” of “may you live in interesting times.”

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