newmogul

“In our view, comparisons with those disasters are greatly exaggerated.  To be sure, serious risks still point to a weaker economy, a longer downturn and the threat of deflation.  And today’s sins of omission have been similar to the 1930s and the Lost Decade: Policy has yet to break the adverse feedback loop from the deleveraging of lenders’ balance sheets to the economy that is at the heart of  this credit-crunch-induced recession.  More importantly, however, those two earlier calamities also involved egregious sins of commission or at least delay.  Tightening monetary and fiscal policy turned a serious recession into the Great Depression, and protectionism made it worse.  Japanese authorities eventually embraced the right policies, including cleaning up bank balance sheets, but it took a decade to adopt them. ” source...