Paul Krugman Cautions Against Collective Pessimism
Could a fixation on the language of depression economics actually precipitate a worse economic slump? The Times speculates that a eye toward past downturns could increase our complacency with the current one.
This was exactly the thinking during the 1930's. Economists repeatedly cited slumps in the late-19th century and drew connections to the circumstances post-Black Tuesday. Upon hearing such news the bread lines only got longer.
True, the ingredients are all there for us make a link in our public consciousness to the Great Depression. There's a mammoth banking crisis, a stock market that refuses to rise, and consumer spending at record lows. History may be repeating itself—if that's our expectation.
In a fine interview with Paul Krugman in today's Barron's evaluating where the United States is headed financially, the Nobel Prize-winning economist observed, "Once prices start falling, and people start to expect continuing deflation, the balance sheet problems will become much worse than they already are." Krugman describes an unholy marriage in which our fears translate into inaction.
But the comparisons to times past are really not what's important. How to emerge from the slump is. Assuming there is some relationship, however oblique, between our expectations and reality, the question for any society that wishes good for itself would be how to trump the pessimism and let an eye toward the future triumph. For that we turn back to Paul Krugman whose "Krugman plan" at Harvard Business Publishing could stimulate a great deal of positive thinking.
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Do you have a magnetic compass in your head?
A new study, led by psychologist Jean Twenge, points to the screen as the problem.
- In a new study, adolescents and young adults are experiencing increased rates of depression and suicide attempts.
- The data cover the years 2005–2017, tracking perfectly with the introduction of the iPhone and widespread dissemination of smartphones.
- Interestingly, the highest increase in depressive incidents was among individuals in the top income bracket.
On Thursday, New Zealand moved to ban an array of semi-automatic guns and firearms components following a mass shooting that killed 50 people.
- Gun control supporters are pointing to the ban as an example of swift, decisive action that the U.S. desperately needs.
- Others note the inherent differences between the two nations, arguing that it is a good thing that it is relatively hard to pass such legislation in such a short timeframe.
- The ban will surely shape future conversations about gun control in the U.S.
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