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December 18, 2011

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Posted: 18 Dec 2011 12:06 AM PST

"A Financial Crisis Needn’t Be a Noose"

Posted: 17 Dec 2011 02:06 PM PST

It doesn't have to be this way:

A Financial Crisis Needn't Be a Noose, by Christina Romer, Commentary, NY Times: Recessions after financial crises are long and severe, and the subsequent recoveries are protracted. That is the bold conclusion of "This Time Is Different," the book by Carmen Reinhart and Kenneth Rogoff, and it has become conventional wisdom. ...
But while there are strong patterns in the authors' mountains of data, this simple summary misses an important fact: There's dramatic variation in the aftermaths of crises, and much of it is caused by how policy makers respond. ......
The ... importance of the policy response in determining the effects of crises argues strongly against complacency here at home. A country as creditworthy as the United States can continue to use fiscal stimulus to help return the economy to full employment. And, as I argued in a previous column, there's much more the Fed could be doing. Whether we continue to fester or finally embark on a robust recovery depends on whether we choose to use the tools available. ...

The Hard (Wish We Were) Working Poor

Posted: 17 Dec 2011 11:19 AM PST

The rebuttal to Casey Mulligan and others like him is very simple:

A work ethic doesn't help much when there is no work to be had.

Policymakers need to get off their fat, lazy, pampered butts and do something to help to create the needed jobs. If Congress worked as hard on the unemployment problem as the poor do in their jobs, maybe we'd make some progress.

It Wasn't Fannie and Freddie

Posted: 17 Dec 2011 10:27 AM PST

Richard Green:

It is possible to hold the following two views at the same time
(1) The executives for Fannie Mae and Freddie Mac should be held to account for their contributions to the crisis; and
(2) Compared with banks, shadow and otherwise, Fannie and Freddie were pikers in their contributions to the crisis.

For the Last Time, Fannie and Freddie Didn't Cause the Housing Crisis.

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