Life Is A Cabaret, Old Chum

It’s been a busy week.  Time to go to the cabaret.

Chanson réaliste anyone?  If we are in a depression, perhaps we will see a return of the genre.  So are we?

Richard Posner has been generating a lot of buzz with his new book and apparent change in his view of deregulation.  The gist is that he has changed his mind from being a proponent of deregulation to blaming the crisis on deregulation.  Now, that is probably an oversimplification, and the Cowboy has not read the book yet, so your mileage may vary.  Posner’s volte face sounds a lot like Greenspan’s change of view, as discussed here.

One of Posner’s assertions is that we are in a depression, not a recession.  Here he is on his blog over at The Atlantic:

“Most economists would reserve the word “depression” for a situation in which either output or employment has fallen by at least 10 percent. But that is round-number thinking. There is no basis for drawing the line between “recession” and “depression” at a particular percentage rate of decline. One month of 10 percent unemployment cannot be thought more serious than ten years of 9 percent unemployment. What marks our current economic situation as a depression in a meaningful sense, though not one likely to match in severity the Great Depression of the 1930s, is the intensity of the anxiety that it has aroused, the enormous costs that the government has incurred to try to stop the downward spiral of the economy, the possibility that those costs will bite us as the economy begins to recover and by doing so will knock the recovery off its path, and the further possibility that the recovery will be extremely protracted because of long-term changes in consumer preference.”

The Cowboy is open to the characterization as a depression.  It seems likely that in retrospect, future historians will call it that.  In the present, however, it may be better to alleviate despair by simply allowing the currently favored word – recession – to continue to hold sway.

Still, it may be time for a drink and some appropriate music.  Santé.

Published in: on May 22, 2009 at 22:24  Comments Off on Life Is A Cabaret, Old Chum  
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