No One Could Have Known

That handing billions of dollars to companies without requiring that they lend or hire would lead to such serious problems:

Romer’s farewell luncheon had been scheduled for the club’s ballroom, but attendance was light and the event was moved to a smaller room. Romer, wearing a green suit, read brightly from her text – a delivery at odds with the dark material she was presenting. When she and her colleagues began work, she acknowledged, they did not realize “how quickly and strongly the financial crisis would affect the economy.” They “failed to anticipate just how violent the recession would be.”

Even now, Romer said, mystery persists. “To this day, economists don’t fully understand why firms cut production as much as they did or why they cut labor so much more than they normally would.” Her defense was that “almost all analysts were surprised by the violent reaction.”

4 thoughts on “No One Could Have Known

  1. DUUUUUHHHHHH????? Either these folks are too far enslaved in that “the market will adjust itself” bullshit philosophy, or they. are. just. plain. STUPID.

  2. And no one in the history of the United States has ever encountered prolonged unemployment caused by lack of demand and lack of income to make purchases, so it’s all uncharted territory.

    Gee, there was some novel or something about a an economic crisis called The Great Depression and some president with three catchy initials came along and had the government provide employment for the unemployed. But that was all fiction and would never work in the real world….

  3. Ack, the right margin bleeding into the right column again.

    Are others seeing this? Or is it my PC (IE8 and WIN7)? Very annoying and makes reading things difficult, to put it mildly.

    Is it me or is it the site?

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