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.

LinkedIn meets Tinder in this mindful networking app

Swipe right to make the connections that could change your career.

Getty Images
Swipe right. Match. Meet over coffee or set up a call.

No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.

Keep reading Show less

Can the keto diet help treat depression? Here’s what the science says so far

A growing body of research shows promising signs that the keto diet might be able to improve mental health.

Public Domain
Mind & Brain
  • The keto diet is known to be an effective tool for weight loss, however its effects on mental health remain largely unclear.
  • Recent studies suggests that the keto diet might be an effective tool for treating depression, and clearing up so-called "brain fog," though scientists caution more research is necessary before it can be recommended as a treatment.
  • Any experiments with the keto diet are best done in conjunction with a doctor, considering some people face problems when transitioning to the low-carb diet.
Keep reading Show less
Promotional photo of Lena Headey as Cersei Lannister on Game of Thrones
Surprising Science
  • It's commonly thought that the suppression of female sexuality is perpetuated by either men or women.
  • In a new study, researchers used economics games to observe how both genders treat sexually-available women.
  • The results suggests that both sexes punish female promiscuity, though for different reasons and different levels of intensity.
Keep reading Show less

Want to age gracefully? A new study says live meaningfully

Thinking your life is worthwhile is correlated with a variety of positive outcomes.

Surprising Science
  • A new study finds that adults who feel their lives are meaningful have better health and life outcomes.
  • Adults who felt their lives were worthwhile tended to be more social and had healthier habits.
  • The findings could be used to help improve the health of older adults.
Keep reading Show less