21 Aug 2009

Two Men Enter, One Man Leaves: More on Krugman vs. Murphy

All Posts No Comments

Now it’s official: Krugman has definitively said we are in a recovery. (In his previous writing, he technically didn’t say we were, just that it seemed as if we were, and if we were it was because of Big Government.)

Now what’s ironic in all this is that even if unemployment is in double digits for 2010 through 2013–which it very well might be–Krugman would actually weasel out of the post I’ve linked to above. He would say, “Yes this is unfolding exactly as I predicted. Real GDP started rising again for a few quarters in the summer of 2009, and I said at the time that it would be a jobless recovery.”

So just to be clear, when I say we are nowhere near coming out of this, I mean it in the same way as an economist speaking in 1932. Yes, the official recession dating of the NBER shows that there were two recessions in the 1930s–one from 1929-1933, and another from 1937-1938.

But c’mon, that’s ridiculous. We all know that “the Great Depression” lasted from 1929 until at least World War II. (And readers of Bob Higgs know that it actually lasted through World War II.)

When it comes to dating business cycles, I am a man of the people. If a tenth of the labor force can’t find work, the economy is broken. Don’t let those MIT economists like Krugman fool you with their fancy jargon.

Comments are closed.