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Monthly Archives: February 2009
Now I am a believer.
Few readers of my blog will be surprised to hear that I voted Barack Obama in the election. But I was always skeptical that he would be able to achieve fully his promises to bring candor, responsibility, and bipartisanship to Washington. Experience had convinced me it wasn’t practical. OK, […] Continue reading
We often hear the question “isn’t this economic crisis becoming as bad as the Great Depression?” Economists can offer a variety of reassurances, but each of them is quite circumscribed:
1. First reassurance: So far, the downturn is at worst competing with 1981-82 for the title of worst post-war recession. True, it is too late […] Continue reading
Everyone asks for tips: Where can I put my money? Stocks or bonds have done very badly over the last year, needless to say, and one cannot be confident that they have hit bottom. Should one just leave everything in banks and money market funds? Surely there must be something else worth buying?
Inflation-indexed bonds (TIPS in […] Continue reading
Congress has finally agreed on a $790 billion stimulus package. Is it too small, as many Democrats claim (such as Paul Krugman), or too big, as many Republicans claim (such as the minority party leadership in Congress)? The answer is yes. It is too big and too small.
If the criterion is how much annual stimulus […] Continue reading
Some observations on the plan announced by Treasury Secretary Tim Geithner yesterday:
Clearly we need to hear more details. I sympathize with Geithner, who has only been in office a couple of weeks. He has had to take over in the middle of the worst financial crisis in 77 years, at the same time that he must […] Continue reading
It is unfortunate that much of the congressional debate regarding the stimulus package is phrased in terms of a summary statistic: what fraction of the stimulus is to be increased spending and what fraction is to be tax cuts. It currently looks to be about 70-30, but the Republicans say they want more in tax […] Continue reading