Blue Monday - Krugman: 'Depression Economics"

Growing unemployment mixed with media focus on holiday spending. We seem to be floating on a plane of uncertainty, if not unreality. This recession has either hit you really hard already or you have a sense of concern or uncertainty that it is looming out there. If you haven't been immediately hit, that is, you still have a job and you didn't have much money to invest in the first place, so you haven't really lost any, you are aware of how bad things are in a more abstract sense. Statistically, we know things are bad and getting worse for a lot of people. Where is it going. Will the incoming administration's steps do more than give hope -- will it have impact? No one can be certain, but clearly, the Government needs to do something. We are heading in the holiday season. Down deep, people still have hope that, as the year ends and the calendar changes, the new administration enters, the world will change. At the moment, and in the eyes of economists like Nobel winner Paul Krugman, we may be heading for a long climb back up. As the economy started to turn early this year, greeting card designers and trend spotters were already projecting a holiday focus on family, home, counting one's blessings. With the holidays already a lot less merry and bright than past years, we are surely in for some post-holiday gloom in January. Let's hope the public sector financial engineers and political economists can, if not make some magic, begin to provide some leadership and sustenance to those most immediately in need and to our nation as a whole.

from the Krugman interview:

Salon: How bad do you think this is going to get?

Awful. Without a major stimulus package -- sorry, I guess the politically correct term is now "economic recovery plan" -- I'd say that we were definitely headed for double-digit unemployment. Right now the economy is clearly falling as fast as, or faster than, it was in 1981-82, which was a terrifying slump. If Obama doesn't come up with a massive plan, and possibly even if he does, this is going to be a slump that pushes 10 million-plus Americans below the poverty line, and more.

Full interview at Salon here:
http://www.salon.com/tech/htww/feature/2008/12/08/paul_krugman/print.html