Friday, August 27, 2010

Paul Krugman: This is not a recovery

Paul Krugman opines on Ben Bernanke's possible Friday comments:

But we can safely predict what he and other officials will say about where we are right now: that the economy is continuing to recover, albeit more slowly than they would like. Unfortunately, that’s not true: this isn’t a recovery, in any sense that matters.

Krugman continues:

...policy makers are in denial.

After its last monetary policy meeting, the Fed released a statement declaring that it “anticipates a gradual return to higher levels of resource utilization” — Fedspeak for falling unemployment. Nothing in the data supports that kind of optimism. Meanwhile, Tim Geithner, the Treasury secretary, says that “we’re on the road to recovery.” No, we aren’t.

I disagree with the Nobel-winning economist on the patient's treatment. But I fully agree with his diagnosis.

Tim White

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