Throughout our economic crisis, Nobel Prize-winning economist and New York Times columnist Paul Krugman has been nailing it. His analysis and predictions have been spot-on, but his dismal view of how this crisis will play out has turned off a lot of people.
Once again, this week, reviewing the minutes of the most recent meeting of Federal Reserve's open market committee, Krugman finds the news, something that others may have ignored.
He writes: "Most press reports focused either on the Fed's downgrade of the near-term outlook or on its adoption of a long-run 2 percent inflation target.
"But my eye was caught by the following chilling passage (yes, things are so bad that the summarized musings of central bankers can keep you up at night): 'All participants anticipated that unemployment would remain substantially above its longer-run sustainable rate at the end of 2011, even absent further economic shocks; a few indicated that more than five to six years would be needed for the economy to converge to a longer-run path characterized by sustainable rates of output growth and unemployment and by an appropriate rate of inflation.'"
Krugman says this economic slump is unlike others this nation has experienced and will cause a great deal of pain and suffering before it's all over. Economic stimulus plans and rescue plans for financially troubled homeowners may mitigate the slump, he writes, but we're in for a long, dark period.
Is there a silver lining? He says we may pull out of it eventually, but it's going to take longer than we think.
Read the whole thing here.
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