Handbasket to Hell

Was the Great Recession Just Phase 1?

Felix Salmon sounds the alarm over what he believes to be "arguably the most uncertain outlook, in terms of the global political economy, since World War II ended and the era of the welfare state began... Most fundamentally, what I'm seeing as I look around the world is a massive decrease of trust in the institutions of government."

"It looks increasingly as though we're entering Phase 2 of the global crisis, with 2008-9 merely acting as the appetizer. In Phase 1, national and super-national treasuries and central banks managed to come to the rescue and stave off catastrophe. But in doing so, they weakened themselves to the point at which they're unable to rise to the occasion this time round... And that failure, in turn, is only going to further weaken institutional legitimacy across the US and the world. It's a vicious cycle, and I can't see how we're going to break out of it."

Richard Posner: "If we were being honest with ourselves, we would call this a depression. That would certainly better convey both the severity of our problems, and the fact that those problems have no evident solutions."