False Readings on Economic Recovery
May 28, 2009
During the Great Depression of the 1930's, the government projected a lot of happy thoughts and convinced a lot of people to put their money back into stocks. The markets actually went up about 48%, only to crash again to even lower lows, because ultimately the fundamentals of the economy had not been fixed at all. They were trying to "restore confidence" by singing "Somewhere Over the Rainbow."
Don't get caught in the same propaganda. Here's what a leading economist has to say from the Bank of England.
The leading Bank of England official who accurately predicted the recession warns today against complacency that the worst of the slump is over and predicts a further surge of more than a million in unemployment this year.
David Blanchflower, who steps down from the Bank’s rate-setting Monetary Policy Committee this week, says that the recovery predicted by the Chancellor for the end of this year may not materialise, and is likely to prove lacklustre if it does.
Challenging growing optimism over prospects for economic revival, he says in an exclusive interview with The Times: “My worry is that there can be many false dawns and we shouldn’t just assume that everything is over.”
Dr. Stephen Jones