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17 November 2011

How to save the economy

I predicted way back in 2008 that the recession soon to follow what was then just a "credit crisis" would last 15 years. Everybody said I was crazy. Now when I remind them, they just tell me to shut up. I was going to indulge my inner economics genius and post a blog about how and why this would occur, but of course, my inner trailer trash layabout kept me from doing it. And then I got laid off (American) or made redundant (British), and my life became so complex I didn't have the energy to even consider it. In the last couple of weeks, like a dam breaking but in reverse, my life has got a lot simpler. I now know (more or less) what I am going to do and when. So to the blog... But wait! I am not going to do the 15-year recession blog (now only 13 years of it left, of course.) The time for that has passed. The moving finger writes and having writ, moves on. Instead...
I didn't think Paul Krugman could ever become more of a hero to me than he already was. But he has. He has a cunning plan to save the US economy, and of course, it's based a bit more on history than on pure economics. If you have closely studied the 1929 stock market crash and ensuing 10-year depression, you will know that it was more due to an outbreak of war in Europe than to government or Fed policies that America began to be productive again around 1939-40. And you will know that there have been quite a few vague historical echoes in our current fiasco as well. So Krugman's idea is that the government should give up on economy-tittivating, which they are frankly no good at anyway, and fake an alien invasion.

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