Saturday, November 15, 2008

Covering your bases rather than sticking out your neck

Brad de Long writes (9:11 14 Nov 2008) on his blog, "I am now going to stick my neck out and say it will probably be the worst downturn since the Great Depression."  Is this a case of his sticking out his neck or just covering his bases?

Only last July BDL wrote, "If the tide of financial distress sweeps the Fed and the Treasury away--if we find ourselves in a financial-meltdown world where unemployment or inflation kisses 10%--then I will unhappily concede, and say that Greenspanism [lowering interest rates to prevent an economic slump] was a mistake."  

Since unemployment hit 10.5% per cent in the 1980-1982 recession, it would seem that BDL is now saying that unemployment will "kiss" higher than 10%.   Will he concede that Greenspanism was a mistake?   Or is he just trying to have it both ways - predicting a 10% unemployment rate in the one case, pretending it's not going to happen in the other?

Why oh why can't we have better economists?

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