Straight talk on the economic crisis
ON THE MEDIA
In the business of reporting on the economy, one commentator comes right out and says it: 'This looks an awful lot like the beginning of a second Great Depression.'
Business journalists have been straining for months to describe the economy. Some have it "struggling" or "staggering." They've labeled the downturn a "crisis" and a "meltdown." Others have reached for metaphors -- "off the rails" or "in a ditch."
That might have felt like strong stuff, but it pales in comparison to the alarms sounded by Paul Krugman, the New York Times columnist who topped himself Sunday.
"Let's not mince words," Krugman declared. "This looks an awful lot like the beginning of a second Great Depression."
Most business editors in America would have blanched if their reporters turned in such copy. Even the editor who runs financial coverage at the Detroit Free Press in woebegone Michigan told me he's not ready to have his reporters call the crisis, though "unprecedented," a depression.
But in the brief, ugly history of these hard times, economists and commentators must play a different role than the garden-variety reporter. And they too often have been misguided by a blind optimism.
The record shows that, even when they had been put on notice, the people with the power in Washington wouldn't act. Congress knew mortgage giants Fannie Mae and Freddie Mac needed fixing but couldn't put aside partisan differences to do it.
Lawmakers hardly need more reason for inaction. Krugman put it to me this way Tuesday: "There's at least as much risk that politicians will fail to appreciate the urgency of the situation as there is that the public will become excessively scared.
"So, all around, honesty is the best policy," he continued, by e-mail. "And if the truth is scary, so be it."
It's important for people to remember that Krugman fulfills a far different role than the business reporter at their local paper. He's a commentator, one of the few in the mainstream media who has spent years delving deep into macroeconomic theory. His recent Nobel Prize in economics confirms his stature.
And he has always been honest enough to wear his ideology on his sleeve. The name of both his 2007 book and ongoing blog: "The Conscience of a Liberal."
He aimed his Sunday column not so much at the huge audience that found it online (it was still among the most e-mailed stories on nytimes.com late Tuesday) but at the incoming Obama administration and the hundreds of lawmakers who will soon be voting on an economic stimulus package.
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