The Lost Decade?
By DAVID BROOKS
NYT
If you want a big swig of despair, listen to the people who know something about the global economy. Roger Altman, a former deputy Treasury secretary, is arguing that America and Europe are on the verge of a disastrous double-dip recession. Various economists say it will be at least another three years before we see serious job growth. Others say European banks are teetering — if not now, then early next year.
Walter Russell Mead, who teaches foreign policy at Bard College, recently laid out some worst-case scenarios on his blog: “It is about whether the international financial system will survive the next six months in the form we now know it. It is about whether the foundations of the postwar order are cracking in Europe. It is about whether a global financial crash will further destabilize the Middle East. ... It is about whether the incipient signs of a bubble burst in China signal the start of an extended economic and perhaps even political crisis there. It is about whether the American middle class is about to be knocked off its feet once again.”
The prognosis for the next few years is bad with a chance of worse. And the economic conditions are not even the scary part. The scary part is the political class’s inability to think about the economy in a realistic way.
This crisis has many currents, which merge and feed off each other. There is the lack of consumer demand, the credit crunch, the continuing slide in housing prices, the freeze in business investment, the still hefty consumer debt levels and the skills mismatch — not to mention regulatory burdens, the business class’s utter lack of confidence in the White House, the looming explosion of entitlement costs, the public’s lack of confidence in institutions across the board.
(More here.)
NYT
If you want a big swig of despair, listen to the people who know something about the global economy. Roger Altman, a former deputy Treasury secretary, is arguing that America and Europe are on the verge of a disastrous double-dip recession. Various economists say it will be at least another three years before we see serious job growth. Others say European banks are teetering — if not now, then early next year.
Walter Russell Mead, who teaches foreign policy at Bard College, recently laid out some worst-case scenarios on his blog: “It is about whether the international financial system will survive the next six months in the form we now know it. It is about whether the foundations of the postwar order are cracking in Europe. It is about whether a global financial crash will further destabilize the Middle East. ... It is about whether the incipient signs of a bubble burst in China signal the start of an extended economic and perhaps even political crisis there. It is about whether the American middle class is about to be knocked off its feet once again.”
The prognosis for the next few years is bad with a chance of worse. And the economic conditions are not even the scary part. The scary part is the political class’s inability to think about the economy in a realistic way.
This crisis has many currents, which merge and feed off each other. There is the lack of consumer demand, the credit crunch, the continuing slide in housing prices, the freeze in business investment, the still hefty consumer debt levels and the skills mismatch — not to mention regulatory burdens, the business class’s utter lack of confidence in the White House, the looming explosion of entitlement costs, the public’s lack of confidence in institutions across the board.
(More here.)
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