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Politics : View from the Center and Left
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To: Mary Cluney who wrote (144064)9/12/2010 7:33:10 PM
From: Steve Lokness  Read Replies (1) of 541763
 
Mary;

trying to make sense of Japan’s woes

I'm very very surprised that no one has posted Krugmans editorial from Friday. In it he discusses Japan at length - saying Japans recovery might look better than ours should we elect many republicans - he could be right.

But in typical Krugman style he says that Japan didn't stimulate enough either. Always there is not enough stimulation. But Japan tried and the fact they didn't have much success enforces the Austrian argument that there are natural cycles in economics and no amount of stimulating will make people borrow again.

What I don't understand is why Krugman and others seem to not reflect on what got us here - Japan and the US. Even though the two economies reached this point better than a decade apart - it was the single issue of too much leverage in the housing boom for each. Too much leverage exactly the same cause that resulted in the great Depression. And so now Krugman says everyone is wrong - except for him - and we should leverage ourselves back into debt? So go back to what caused not only the great depression, but Japans lost decade and our most recent deep recession? And you really think this debate is over? Boy would I like to take that bet!
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