I've been writing about this since November 2007.
Tonight, I'm at a loss for words. (Yeah, me, the guy with the 20-page "gloom and doom" diaries.) Then again, as I've also been saying for almost three years, it's been a slow motion trainwreck. Still, when the thing actually derails, you just kind of sit there for a moment taking it all in.
I never, ever wanted to be right. (Even now, I still hope I'm wrong.) There's not much else to say.
From Paul Krugman on Monday's op-ed page of the NY Times...
The Third Depression
By PAUL KRUGMAN
New York Times
June 28, 2010
Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as "depressions" at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.
Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline -- on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.
We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost -- to the world economy and, above all, to the millions of lives blighted by the absence of jobs -- will nonetheless be immense...
Bold type is diarist's emphasis.
Sometimes, less is more. I think NOW--with the writing on the wall--it's definitely one of those times...God help us.
UPDATE: (obviously, this Krugman post is already going quite viral)
Here's Calculated Risk's take on Krugman:
I'm not as pessimistic as Professor Krugman, but I do think with almost double digit unemployment, the focus of policymakers should be jobs, jobs, jobs ...
And, here's University of Oregon economist Mark Thoma's lead-in to the Krugman story:
A failure of policy, in particular a "stunning resurgence of hard-money and balanced-budget orthodoxy," increases the likelihood that we are headed for a third depression...