‘We Are In The Midst of The Keynesian Depression’: UNPRECEDENTED Central Bank Interventions Backfire As House Price Keep Raising While Wage Growth Goes Flat. Discretionary Spending Took A Notable Turn For The Worse, And American Households Hit 43-Year Low In Net Worth.
December 4th, 2012
‘We Are In The Midst of The Keynesian Depression’
Five years have passed since the beginning of the Great Recession. Growth is slow, joblessness is elevated, and the knock-on effects continue to drag down the global economy. The panic in financial markets in 2008 that caused a systemic crisis and a sharp fall in asset values still weighs on markets around the world. The primary difference between today and the 1930s, when the U.S. experienced its last systemic crisis, has been the response by policymakers. Having the benefit of hindsight, policymakers acted swiftly to avoid the mistakes of the Great Depression by applying Keynesian solutions. Today, I believe we are in the midst of the Keynesian Depression that my father predicted. Like the last depression, we are likely to live with the unintended consequences of the policy response for years to come.