The Homa Files

Excerpted from Washington Post, “Five Ways to Wreck a Recovery”, by Amity Shlaes, August 18, 2008

Perverse monetary policy was the greatest cause of the Great Depression. But five non-monetary missteps were important in making the Depression great, and the same missteps damaged the global economy as well. While many are thinking about the Depression, few seem concerned about replicating these Foolish Five today:

1. Giving in to protectionism.
2. Blaming the messenger (i.e. the stock market)
3. Increasing taxes in a downturn.
4. Assuming bigger government will bring back growth.
5. Ignoring the cost of change.

The proximate danger today is a repeat of the 1970s, not the 1930s. But if lawmakers don’t remember the old missteps, they might find that their new recovery legislation imperils our recovery.

Amity Shlaes is the author of “The Forgotten Man: A New History of the Great Depression” and a senior fellow at the Council on Foreign Relations.

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For full op-ed (worth reading):
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/17/AR2008081702079_pf.html

Thanks to Dave Fedlam, MBS-MBA ’09 for the heads-up

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This entry was posted on August 18, 2008 at 10:34 am and is filed under Economics, Government & Politics, Taxes, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.