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This Time Is Different

Friday, September 10, 2010

Kenneth Rogoff, a Thomas D. Cabot Professor of Public Policy and professor of economics at Harvard University, looks at the current recession in context of centuries of financial meltdowns. This Time Is Different: Eight Centuries of Financial Folly, written with Carmen Reinhart, shows that throughout history, rich and poor countries alike have been lending, borrowing, crashing—and recovering—their way through an extraordinary range of financial crises.

Guests:

Kenneth Rogoff
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Comments [3]

matt

Best quote of the day by Kenneth Rogoff:

" They [Congress] should be grilling themselves! "

No kidding. Finally someone says it out loud. I wonder which Congressmen were responsible for allowing/pushing the irresponsible loaning practices that caused the mortgage bubble to pop?

Answer: It's the ones who (1) set up bank debt insurance institutions e.g. Freddie & Fannie, and (2) passed the National Affordable Housing Act and other bills that basically encourage loans to lower income individuals which they *know* would never be able to afford monthly payments b/c, well, it's OK: Freddie & Fannie will cover they debt on behalf of the U.S. taxpayer.

Which Congressmen were those? Democrats. By the way, I am NOT Republican. Don't even get me started on Republican tax & business policy... Corporate pawns, all of them. Independents for the win!!

Another great point by Kenneth Rogoff was that the voters are just as responsible for the recession as are the politicians for basically being uneducated and/or apathetic and not voting these incumbents out.

One thing I disagree with Kenneth on is that people were responsible for the recession by buying and selling houses, riding the bubble. I would say "contributory", but not "responsible". Don't hate the player; hate the game...

Sep. 10 2010 03:17 PM
Amy from Manhattan

What about the economic recovery in the US, Europe, & Japan after WWII--was that time actually different? Could the Marshall Plan be likened to a stimulus that worked?

Sep. 10 2010 12:29 PM
Phil Henshaw from way uptown

It's curious that our cultural myths keep us from conceiving of that a natural physical limit to consumption would also mean that there is a natural physical limit to money too, as Keynes actually first pointed out. He pointed to the rather dramatic but quite simple choice, that money will climax when either investors spend all their profits and stop the increase their investments in our consuming more of the earth, or, the other choice. The other choice is for the economy stop being able to generate net earnings on their investments. He called it "the Widow's cup" after a story about Elijah and a limitless cup of oil. For my ref's search my site: "site:synapse9.com Keynes"

Because we have not questioned our cultural myth of limitless money we have not asked how either of those two extremely different options would really work... That's why we had the crash, the real reason. We are clearly beyond our physical limits of multiplying or consumption of the earth, and because of ignorance flying blind by not asking what reaching our physical and money limits would mean.

Sep. 10 2010 12:25 PM

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