Þe 2008-9 collapse was not driven by a flight of assets & income from housing, but a flight to liquidity & safety. The first is a sectoral shift. It isthe second that is a general glut...
No mention in your write up at the time of what the Fed was not doing. Do we not at least know now (2023) that Ben should have been saying that the Fed would do what it takes to get and keep inflation back up to target? And have been flooding the markets with liquidity? Banks should have been begging mortgage holders to refinance at lower rates? But the FI that went under in THAT environment should just have got their equity zeroed out and been gobbled up by well financed vultures?
And that relief bill (ne "stimulus"). Couldn't its elements have been defined in term of outcomes? Unemployment insurance duration, etc. depending on unemployment rates? Nothing date terminated. Transfers to S&LG dependent on lost tax revenue (the way UI should work)?
That's the right narrative. But Brad, I have to say that after unearthing the Open Letter you might have given us a slightly bigger recess before reminding us of a horrible time. I must now complete the experience by listening to Mountains Beyond Mountains.
If I recall in my local area, the economy was depressed for that “Lost Half-decade.” I also remember people moving to South Dakota to work the oil industry during that time. I suspect that export growth was oil and oil products; capital equipment growth, to support the fracking industry. Hopefully we will have something similar this time around.
No mention in your write up at the time of what the Fed was not doing. Do we not at least know now (2023) that Ben should have been saying that the Fed would do what it takes to get and keep inflation back up to target? And have been flooding the markets with liquidity? Banks should have been begging mortgage holders to refinance at lower rates? But the FI that went under in THAT environment should just have got their equity zeroed out and been gobbled up by well financed vultures?
And that relief bill (ne "stimulus"). Couldn't its elements have been defined in term of outcomes? Unemployment insurance duration, etc. depending on unemployment rates? Nothing date terminated. Transfers to S&LG dependent on lost tax revenue (the way UI should work)?
Ken Rogoff placed in administrative detention? :)
How this happened is explained by the actors quoted in my book, “a crisis wasted”
That's the right narrative. But Brad, I have to say that after unearthing the Open Letter you might have given us a slightly bigger recess before reminding us of a horrible time. I must now complete the experience by listening to Mountains Beyond Mountains.
If I recall in my local area, the economy was depressed for that “Lost Half-decade.” I also remember people moving to South Dakota to work the oil industry during that time. I suspect that export growth was oil and oil products; capital equipment growth, to support the fracking industry. Hopefully we will have something similar this time around.