from Washington’s Blog:
Sure, last year was the first pre-election year stock market loss since the Great Depression. And admittedly, this week was the worst opening week of any year … EVER.
But that’s not the big news.
Economist Joe Stiglitz warned back in 2010 that the world risked sliding into a “Great Malaise.” This week, he followed up on that grim prediction, saying, “We didn’t do what was needed, and we have ended up precisely where I feared we would.”
Joe Stiglitz is right.
In the aftermath of 2008, Stiglitz was indeed one of those warning that I and economists like me were wrong. Without extraordinary, sustained and aggressive policies to rebalance the economy, he said, we would never get back to what before 2008 we had thought was normal.
I was wrong. He was right.
Future economic historians may not call the period that began in 2007 the “Greatest Depression.” But as of now, it is highly and increasingly probable that they will call it the “Longest Depression.”
What’s he talking about? And how could we be in a depression when – until recently – the stock market has been soaring?
Well, the Fed intentionally created a stock market rally so that people would think that the economy was doing well. The wealthy have benefited, but everyone else has been left in the dirt.
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