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Econwatch

September 21, 2009 7:39 AM

Print
Text

Paul Krugman: End of World 'Postponed'

By: David Morgan
Topics: Recession

(AP)

Princeton economist and New York Times columnist Paul Krugman (pictured left in a file photo) is feeling optimistic — at least in terms of a global financial apocalypse being averted.

Bloomberg's Kati Pohjanpalo reports that, speaking at a seminar in Helsinki today, the Nobel Prize-winner said that "the end of the world appears to have been postponed."

Krugman indicated that the recession in the United States may have ended this summer, and that globally the economic downturn has bottomed out.

He said the world economy "does not appear to be falling into an abyss" but is still in trouble, and warned that recovery will be "slow and painful."

How slow? How painful? Krugman predicted that U.S. unemployment may continue to rise until early 2011.

Crediting budget deficits with avoiding even an even worse crisis (they "saved the world" in the short term, he said), Krugman cast doubt on exports driving a global recovery.

Krugman admitted history is not a great guide.

"The trouble is, we really have no road maps," he said. "The only model is the Great Depression itself" — which he said was ended by a very large spending program also known as World War II.

"We don't really want to repeat that," he said.

For more read Pohjanpalo's article at Bloomberg.com.

David Morgan
David Morgan is a senior editor at CBSNews.com and cbssundaymorning.com.

14 Comments +

Add a Comment See all 14 Comments


by villager11 September 22, 2009 9:58 AM EDT: Without any doubt I say that no one actually knows what the real problem is or alternatively does not really wish to confront it!

All of the experts are not in agreement when it comes to solutions or time frames for recovery - so they are all taking educated guesses!

Sorry, but nothing lasts forever and I ask as I have so many times before: " What are we to do when the well runs dry?" Nobody has either an educated or uneducated response to that because the answer is one no one wants to hear - well that is too bad, because the well will run dry......guaranteed!

Theorize all they like but reality will prevail and all this mania about growth, greed and maniacal consumerism will see our demise - no idea when, but then greater civilizations than this one have seen their end as this one will see it's end, so let the greed consume us all until then!

In my 70 years on this planet which we have so thoughtlessly abused, I have learnt one thing! Man is the least required part of the Universe - (something like an irritating appendix) - no use to anyone!; Reply to this comment

by SkirtLifter September 21, 2009 11:52 AM EDT

dragon8me talks of, "One more year of Bush..."

skyk-2009 talks of, "John McSAME pulled the stupid stunt with his campaign..."

cs4466 says, "Thank you, Mr. President!"

Others will chime in with two party politics raving about one side or the other, as if the two major political parties in our representative gov't are the 'be-all' 'end-all' of the global economy. (the article IS about the economy)

This party based bickering is fascinating to me. Please stop with party bs. It's not one parties fault, or the others. The way the two parties trade off power long enough to shirk blame is a concern, but it's not the root of our economic nightmare.

Now to the point:

This Nobel Prize-winner, Princeton economist and New York Times columnist, has been predicting the end of the world for a long time. The Seventh Day Adventists have been predicting the end of the world for 200 years. (although they teach the end via a different vehicle) JW's say were living in the time of the end. LDS's say the end is near. Over 2000 years ago, before Jesus, people have been predicting the end of the world and searching for a messiah.

This phenomenon is caused by Human hubris. We tend to believe we are more important in the universe than we really are.

To those who believe the economy will still crash, it may. But it may not. Even if it doesn't crash, these "economic profits" will say they were right. They'll have some reason how they were correct.

Someday, the real end of the world will occur, could be a billion years off, but it will happen. And if Humans are still around by then, someone will say, "I told you so!"

We are such funny critters. We take ourselves so seriously. I'm thinking about getting my news from The Daily Show and The Colbert Report EXCLUSIVELY!!! At least they entertain me while I listen to the doomsday bs.

l8r

PS: I really enjoyed the post by tmittelstaed. The toilet analogy is beautiful!

Reply to this comment


by fedup12 September 21, 2009 1:34 PM EDT: According to the Jehovas Witnesses (JW's) the time for the end has come and gone several times.

I think the latest end was in the 90's. Back in the 70's they had a big fling before the end.

Hopefully I have at least 20-30 before the end!!!


by mychial September 21, 2009 11:38 AM EDT: there is no one brave enough to be the cause of a nuclear attack or counter attack, after pearl harbour - those that have that power are afraid of it themselves, those who seek to have such power, also end up afraid and cannot use it, but this does not stop self distruction, ie those who kill by the sword will also be killed by the sword, violence, and violent acts, such as murder, rape,etc is the only thing left for those promoting violence.; Reply to this comment


by tmittelstaed September 21, 2009 11:28 AM EDT: Paul Krugman is a liar, pure and simple. There is no such thing as growing unemployment in boom times. We are also not in a recession we are in a depression, and it will not be over until unemployment figures start improving.

The more unemployment the less consumer spending so the less business activity so the more businesses lay off thus more unemployment - it's a downward spiral that only stops when business activity consists of products like food and shelter that are necessities. Then it stops and reverses, and the economy grows back. This is your standard business cycle.

Krugman and others recognize that in their bully pulpits they can effect investment levels, so when the economy is going down all of these people lie like dogs - first they never say depression, all depressions are recessions, and second they create terms like jobless recovery, to maintain the fiction that in periods of high unemployment you don't have a recession going on. Krugman is like your typical supply-sider economist, they claim to each other that if they can con rich people into investing in stocks when the stock prices are low as a result of a recession, that this somehow will generate economic activity that will pull the economy out of recession. That is false, these people really don't hold any firm belief in supply-siding because when the chips are really down, they and their banker friends are lined up at the public trough for their TARP funding.

Only business investment pulls the economy up, and businesses only invest when their sales are rising, and their sales only rise when people have jobs. When economic activity is low, everyone saves money, and starving businesses continue to lower prices, until the prices are low enough then people can't resist the deals any longer, they all spend money like a million people flushing toilets all at once, that's the spark that pushes up business sales and starts the recovery. Krugman here is just trying to jiggle the toilet handle with his lies and claims that everything is back to normal, and get the money flush going early.; Reply to this comment


by cs4466 September 21, 2009 11:12 AM EDT: "Bloomberg's Kati Pohjanpalo reports that, speaking at a seminar in Helsinki today, the Nobel Prize-winner said that "the end of the world appears to have been postponed."

Krugman indicated that the recession in the United States may have ended this summer, and that globally the economic downturn has bottomed out."

Thank you, Mr. President!; Reply to this comment


by dragon8me September 21, 2009 11:07 AM EDT: One more year of Bush and the neocons and there would be no chance of recovery. But not is well yet. As long as the Federal Reserve system exist we are doomed. It must be abolisted and the government must take back control of our money. Otherwise we will continue to be slaves of these rich banking families.; Reply to this comment


by jrod222 September 21, 2009 10:43 AM EDT: Many times intelligent men are ridiculed for a 'lack of common sense'. Could, would, should!!!!! Thanks Paul for risking the ridicule.; Reply to this comment

by RCC_Soldaten September 21, 2009 10:00 AM EDT

In other words---He's clueless.

If you lined up all the world's economists you would still never reach a conclusion.

Reply to this comment


by maistir September 21, 2009 1:57 PM EDT: I love the photo of Krugman tapping his brain with his index finger!


by r9119111 September 21, 2009 8:38 AM EDT: I'm not an economist, however, I agree with Paul. The only thing we have to fear is fear itself. This is just a little bit of history repeating itself. Beware of the fear mongers. They are working harder every day to stoke the flames of distrust and anger. Be strong, my friends. Allow calmer minds to prevail.; Reply to this comment

by stn_sage September 21, 2009 8:32 AM EDT

WHAT?! LMAO! It figures this guy is a Nobel prize winner in Economics---

Well, I got news for the "expert". The world is awash in debt, based on phony, made-up financial instruments that didn't/don't have any value
whatsoever. This is complicated by politicians who THINK they can spend
their way out of DEBT, and private bankers who THINK all they have to do
is print more money!

In short, the world economy can STILL crash at any time! It will take
more than this man's opinion to prevent it!

Reply to this comment


by RCC_Soldaten September 21, 2009 10:33 AM EDT: It is one , big ponzi scheme from the beginning. Madoff would be proud. It appears that they all learned from him.


by sjc_1 September 21, 2009 3:01 PM EDT: We were saved from the brink of another worldwide depression because of the tools that they put in place after the last one. We need to learn our lessons about managing an economy. An economy is a man made creation that takes design and management. It is NOT a natural system that ebbs and flows on its own.