Monday, September 08, 2008


Sometimes it doesn't pay to get up in the morning. The first thing I read was that a USA Today/Gallup poll has it at McCain 54% and Obama 44%. I'm suspicious of this, especially considering the daily tracking polls, but it's a heck of a way to start your day.

Then I turned to economist Paul Krugman's column in the NY Times. To give you a flavor:

So Fannie and Freddie had to be rescued — otherwise debt deflation would have gotten much worse....

But is it enough? I doubt it.

The current U.S. financial crisis bears a strong resemblance to the crisis that hit Japan at the end of the 1980s, and led to a decade-long slump that worried many American economists, including both Mr. Bernanke and yours truly....

...[T]he effort to contain the financial crisis seems to be failing. Asset prices are still falling, losses are still mounting, and the unemployment rate has just hit a five-year high. With each passing month, America is looking more and more Japanese.

So yes, the Fannie-Freddie rescue was a good thing. But it takes place in the context of a broader economic struggle — a struggle we seem to be losing.

Don't worry, though. Sarah Palin will save us.

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