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September 27, 2011 - Harry Eagar
In an interview with Bloomberg News, economist Nouriel Roubini says the recession has already begun again. That's how I see it, too.
And it ain't Obama's doing. It's the continuing outcome of the idiotic Reaganomics that have gutted the American economic system over 30 years. Outside influences are also at work, including Chinese currency manipulation and irresponsible lending to deadbeats.
But there was currency manipulation before Reagan and irresponsible lending to deadbeats. In fact, the irresponsible lending was probably larger, in proportion to the US and world output, in the '70s. The culprit is Reaganomics, or, if you prefer, the disastrous decision to abandon New Deal regulations.
That's like a master gene that controls the potentialities of a suite of other, lesser genes. An individual can live with bad genes until they are all switched on at once.
"Most advanced economies are lapsing back into recession while the U.S. is already in the throes of an economic contraction, according to Nouriel Roubini, co- founder and chairman of Roubini Global Economics LLC.
“ 'The way I see the global economy, I think we’re entering into a recession again in most advanced economies,' Roubini said in a panel discussion today at the Bloomberg Dealmakers Summit in New York. 'I think we’re already into one in the U.S. based on the hard and soft data -- same with most of the euro zone, same with the United Kingdom. . . .
'At this point, the issue is not whether there is going to be a recession or a double-dip but whether it’s going to be relatively mild or whether it’s going to be a severe recession and a global financial crisis,' Roubini said. 'The answer to that question depends on what’s going to happen in the euro zone and whether they can get their act together.
'We are running out of policy bullets,' said Roubini, a professor at New York University’s Stern School of Business. The debt crisis in Europe could have consequences that are “worse” than the collapse of Lehman Brothers Holdings Inc. in 2008.
Well, I think the United States is going back into recession regardless of what happens with the euro, but a contraction in Europe couldn't help. Fundamentally, we are looking at what made the Great Depression so great, and it's unfixable in the short term: Falling demand, overcapacity, incompetent bankers.
No matter how many times Sen. Mitch McConnell brays about "job-killing taxes," the fact is, taxes are lower than they have been in decades and jobs are, too. Taxes have nothing to do with it, except they are too low to keep the deficit within reasonable limits.
If the government were not in deficit -- a gift of Bush's eight years -- then there would be more "policy bullets." Not enough, in my opinion, to correct the situation. We know how to wreck complicated economies but we don't know how to repair them.
All the more reason not to wreck them in the first place.
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