{"id":19468,"date":"2013-11-18T14:47:54","date_gmt":"2013-11-18T14:47:54","guid":{"rendered":"http:\/\/rafaelfajardo.com\/portfolio\/underpaidgenius-a-permanent-slump-paul\/"},"modified":"2013-11-18T14:47:54","modified_gmt":"2013-11-18T14:47:54","slug":"underpaidgenius-a-permanent-slump-paul","status":"publish","type":"post","link":"https:\/\/rafaelfajardo.com\/portfolio\/underpaidgenius-a-permanent-slump-paul\/","title":{"rendered":""},"content":{"rendered":"

underpaidgenius<\/a>:<\/p>\n

\n

A Permanent Slump? – Paul Krugman – NYTimes.com<\/a><\/p>\n

\"\"<\/p>\n

Paul Krugman (and Larry Summers) peer behind the backdrop and see the postnormal economy may be with us for decades.<\/p>\n

\n

excerpt<\/p>\n

[…] what if the world we\u2019ve been living in for the past five years is the new normal? What if depression-like conditions are on track to persist, not for another year or two, but for decades?<\/p>\n

You might imagine that speculations along these lines are the province of a radical fringe. And they are indeed radical; but fringe, not so much. A number of economists have been flirting with\u00a0such thoughts<\/a>\u00a0for a while. And now they\u2019ve moved into the mainstream. In fact, the case for \u201csecular stagnation\u201d \u2014 a persistent state in which a depressed economy is the norm, with episodes of full employment few and far between \u2014 was made forcefully recently at the most ultrarespectable of venues, the I.M.F.\u2019s big annual research conference. And the person making that case was none other than\u00a0Larry Summers<\/a>. Yes, that Larry Summers.<\/p>\n

And if Mr. Summers is right, everything respectable people have been saying about economic policy is wrong, and will keep being wrong for a long time.<\/p>\n

Mr. Summers began with a point that should be obvious but is often missed: The financial crisis that started the Great Recession is now far behind us. Indeed, by most measures it ended more than four years ago. Yet our economy remains depressed.<\/p>\n

He then made a related point: Before the crisis we had a huge housing and debt bubble. Yet even with this huge bubble boosting spending, the overall economy was only so-so \u2014 the job market was O.K. but not great, and the boom was never powerful enough to produce significant inflationary pressure.<\/p>\n

Mr. Summers went on to draw a remarkable moral: We have, he suggested, an economy whose normal condition is one of inadequate demand \u2014 of at least mild depression \u2014 and which only gets anywhere close to full employment when it is being buoyed by bubbles.<\/p>\n<\/blockquote>\n

The postnormal is a post-growth economy smashing into the face of a society that is based on persistent growth. As the population explosion slows, we now need to make the difficult transition to a post-growth model of human existence, and financial and monetary policies to match. I’m betting that will take decades, and a great deal of difficulty.<\/p>\n

As I wrote earlier this year<\/a>,\u00a0<\/p>\n

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The economist Noriel Roubini wrote an\u00a0important essay<\/a>\u00a0recently, along with political scientist Ian Bremmer, describing the \u201cnew abnormal\u201d as a system operating on the basis of an \u201cunstable disequilibrium,\u201d while the earlier \u201cnew normal\u201d presupposed the world economy was merely a transitory \u201cunstable equilibrium.\u201d<\/p>\n

The takeaway is we\u2019re now in a time of overwhelming volatility, uncertainty, complexity, and ambiguity, where forecasting becomes nearly impossible, and even determining which of the risks confronting us are most significant is almost unimaginable. This near blindness confronts governments, global businesses, the local bank, the entrepreneur, and every person on Earth. We are driving a car whose engineering is unknown (and rapidly evolving, in real time, under the hood), a car that is inexorably speeding up, with only one flickering headlight, and no brakes, on a road headed to who knows where.<\/p>\n

I will leave aside any speculation of what might be done to slow the car, fix the headlights, or get the brakes working. That\u2019s a discussion for something grander than this foreword. But this stark context for our world hangs over us like a threatening cloud, darkening every action we take.<\/p>\n<\/blockquote>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

underpaidgenius: A Permanent Slump? – Paul Krugman – NYTimes.com Paul Krugman (and Larry Summers) peer behind the backdrop and see the postnormal economy may be with us for decades. excerpt […] what if the world we\u2019ve been living in for the past five years is the new normal? What if depression-like conditions are on track […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[10],"tags":[],"class_list":["post-19468","post","type-post","status-publish","format-standard","hentry","category-words"],"jetpack_publicize_connections":[],"jetpack_shortlink":"https:\/\/wp.me\/p6PWot-540","jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/rafaelfajardo.com\/portfolio\/wp-json\/wp\/v2\/posts\/19468","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rafaelfajardo.com\/portfolio\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rafaelfajardo.com\/portfolio\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rafaelfajardo.com\/portfolio\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rafaelfajardo.com\/portfolio\/wp-json\/wp\/v2\/comments?post=19468"}],"version-history":[{"count":0,"href":"https:\/\/rafaelfajardo.com\/portfolio\/wp-json\/wp\/v2\/posts\/19468\/revisions"}],"wp:attachment":[{"href":"https:\/\/rafaelfajardo.com\/portfolio\/wp-json\/wp\/v2\/media?parent=19468"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rafaelfajardo.com\/portfolio\/wp-json\/wp\/v2\/categories?post=19468"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rafaelfajardo.com\/portfolio\/wp-json\/wp\/v2\/tags?post=19468"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}