Turns out forgiveness can be a virtue when it comes to easing hard economic times, as well as other areas of life.
The world economy is still stumbling, Paul Krugman writes in his column today.
Recovery is stalling. “If this story sounds familiar, it should; it has
played out repeatedly since 2008,” Krugman writes, somewhat
depressingly. “As in previous episodes, the worst news is coming from
Europe, but this time there is also a clear slowdown in emerging markets
— and there are even warning signs in the United States, despite pretty good job growth at the moment.”
Then he sets out to
answer this question of why things areso bad. After all, we are many
years past the housing bust and banking crisis, i.e., the causes of the
Great Recession.
The sad truth is that
the ongoing economic hardship around the word is and perhaps still is
avoidable, in Krugman’s view. It is the result of a series of policy
mistakes: “Austerity when economies needed stimulus, paranoia about
inflation when the real risk is deflation, and so on.”
Next question, then, why do governments keep making these mistakes?
The answer, Krugman
posits, is misplaced righteousness, overzealous moralizers intent on
continuing to punish debtors even if doing so drags everyone down. Here
is the background: Before the crash, credit was exploding. “Old notions
of prudence, for both lenders and borrowers, were cast aside,” Krugman
writes. “Debt levels that would once have been considered deeply unsound
became the norm.
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