Robert Samuelson writes “why there was no depression” in the Washington Post today, while citing another government “scholar” of the Great Depression, Christina Romer. He states:
That these huge declines didn’t lead to depression mainly reflects, as Romer argues, countervailing government actions. Private markets for goods, services, labor and securities do mostly self-correct; but panic, driven by the acute fear of the unknown, feeds on itself and disarms these stabilizing tendencies. In this situation, only government can protect the economy as a whole, because most individuals and companies are involved in the self-defeating behavior of self-protection.
His whole analysis is painful. It’s safe to say that he probably hasn’t read Murphy’s book.
