Post by robeiae on Jan 9, 2019 8:56:21 GMT -5
Yes, you heard that right, everyone's favorite "sleeping economist" is predicting a recession: www.washingtonpost.com/opinions/be-prepared-a-recession-is-significantly-likely-in-the-next-two-years/2019/01/07/628c67b8-12a3-11e9-b6ad-9cfd62dbb0a8_story.html?utm_term=.65caf55c9868
His solution? Spend more money, the same solution he always offers:
This is the same guy who saw the Japan tsunami of 2011 as a positive thing because the recovery would help the Japanese economy, who insisted that the 2008 bailout would keep the unemployment rate below 8%, and who pushed for the repeal of Glass-Steagall in 1999, and who argued against regulating the derivatives market in 1998.
Perhaps we should appoint him and Paul Krugman to oversee the future of mankind...
Paul Samuelson’s famous quip that the stock market has predicted nine of the past five recessions cautions against overreacting to recent market moves. But credit spreads have widened considerably, commodity prices have softened, and investors have started demanding higher yields for short-term U.S. bonds than for those with longer terms. Unlike equity markets, such “yield curve inversions” have not historically tended to produce false recession predictions. The overall judgment of financial markets is that a recession is significantly more likely than not in the next two years.
Fiscal policymakers should also realize the very low real yield on government bonds is a signal that more debt can be absorbed. It is not too soon to begin plans to launch large-scale infrastructure projects if a downturn comes. The largest economies should try to limit trade frictions and signal that they are committed to cooperating to support global growth by assuring adequate capital flows to emerging markets and avoiding a cycle of protectionism.
Perhaps we should appoint him and Paul Krugman to oversee the future of mankind...