Krugman: World Trade Has Collapsed Faster Than In The Great Depression

[girl gone mad]

Paul Krugman: In Trade, ‘It’s Not the Great Depression — It’s Worse’
http://blogs.wsj.com/worldbusinessforum/2009/10/07/paul-krugman-in-trade-it%E2%80%99s-not-the-great-depression-it%E2%80%99s-worse/">The Wall Street Journal

Princeton University economist, author and New York Times columnist Paul Krugman won the Nobel Prize in economics last year for his work on international trade — so the guy knows what he’s talking about when it comes to this subject. And he’s worried.


First, he offered a few comments about the U.S. economy:

1 - Based on GDP, “the recession is over, we’re back to a world of growth”

2 - But, “the jobs picture is continuing to deteriorate. The recession may be over, but the bad times are nowhere near over.”

3 - “This could be bad. Financial crises tend to produce prolonged hits to growth…and this is the mother of all synchronized financial crises so we almost certainly have a long, long slog before we’re fully recovered.”

Then, he turned to the topic of world trade. And the picture he painted was not a pretty one.

“When it comes to international trade, actually it’s not the Great Depression, it’s worse,” he said, presenting charts showing the decline in global trade activity falling much more steeply in the current downturn than during the Depression.

“The scale of the collapse of world trade has been so large that it has produced a degree of international linkage that surpasses what even the pessimists imagined,” he said. “World trade acted as a transmission mechanism,” spreading economic distress “even to those countries that had relatively healthy financial systems,” such as Germany.

“We really are one world economy in a way that has never been true before,” he said.

http://blogs.wsj.com/worldbusinessforum/2009/10/07/paul-krugman-in-trade-it%E2%80%99s-not-the-great-depression-it%E2%80%99s-worse/">More...

[bbinacan]

1. Thanks. Now I'll go slash my wrists. n/t

[orpupilofnature57]

2. NWO??

[stevebreeze]

3. so much for Taft Hartly causeing the depth of the depression

of course protectionism will be reviled on Fox anyway. They never let facts get in the way of their reporting.

[econoclast]

7. TaftHartley?

Smoot Hawley. But don't let facts get in the way of your reporting

[stevebreeze]

9. you are correct Smoot Hawley, my point however is correct

[TheWatcher]

4. You do realize that most people in GD will read #1.....

1 - Based on GDP, “the recession is over, we’re back to a world of growth”

Drool, and then go back to sleep.

"We really are one world economy in a way that has never been true before,” he said.

THAT Statement scared me.

[AdHocSolver]

5. GDP is a phony measure of an economy's health.

Sustainability is the measure of economic health. Sustainability depends on employment and repayable debt.

The U.S. economy fails on both these measures. Unemployment numbers are still growing, and until the offshoring of jobs is reversed, will continue to grow.

Until such time as the U.S. produces a majority of the goods that we purchase, the trade deficit will continue to grow, and the less able the U.S. will be to repay it. Other countries are already starting to trade using other currencies rather than the U.S. dollar. When that becomes common, the countries that have been subsidizing the U.S. economy will let the dollar collapse, and the Great Depression of the 1930's will look like "good" times.

[pokercat999]

6. In 1930 the US was a major exporter of goods, today just

the opposite, we are the world's largest IMPORTER of goods. #1 tells me this guy has rocks in his head....or his glass pipe. Calling this pre-depression over is just cooking the books and painting the turd gold.

[Greyhound]

8. It's like they're trying to re-use the train after the wreck and refusing to fix the track.

Some solution...
:eyes: