A recent NOW broadcast on PBS featured Dr. Kenneth Rogoff, Professor of Economics at Harvard University as well as former Chief Economist and Director of Research, International Monetary Fund (and FIDE International Grandmaster). Dr. Rogoff had some things to say about the current economic crisis that I think are important, but have not gotten any exposure - here on dKos or elswhere.
Dr. Rogoff says the current situation fits the pattern of a "typical, super deep financial crisis." He says that although recessions do end, it will be a while before we recover from this one. In his estimation it will take about four years for income to recover and the housing market to hit bottom, with unemployment rising to 11% to 12%. That is, it will be at least until the end of 2011 before we are where we were at the end of 2007.
Here is the clip from the March 13 NOW program.
A few excerpts:
The big problem is they can't figure out how to solve is, while we were sleeping, they let this banking system grow and grow and grow, and they've provided these guarantees and said not to worry. But in a lot of european countries the banking liabilities, what they owe, are three and five times national income, so they can't guarantee them. Many of the policy makers are now really like deer caught in the headlights of this storm. They don't know what to do. They don't have a clear picture. There is a mammoth recession going on but in some sense, if you step back, that's manageable. We have booms and we have downturns. What's scary about this is that the financial system has imploded and you can't get going again without fixing it. If they are going to fix it, they gotta tell us where we're going. Where are going in four to five years? Where do we want to be?
(...)
... It's hard to not get angry. I mean this is just a once in a hundred years meltdown. It's awful. And you see we lived in this gilded age before where these people were getting richer in a way you just can't imagine. And we had these policies that just sort of stoked it. (...) It's just incredible that with house prices doubling in five years, just off the charts of things we had ever seen, that you would have the head of the Federal Reserve, the U.S. Treasury Secretary, our leaders, going and saying this is fine, this is financial globalization, it's just that we're doing a good job. It's hard to not get angry.
Rogoff says, "I would say this year's story is the economy, next year's story is really going to start to be more and the political fallout, as people realize how bad this is, and they are going to get angry. (...) I think there are going to be parts of the world, China could be unstable, Russia, Latin America, where it gets a lot uglier. It is a very frightening prospect."
I recommend watching the entire 24 minute clip.