She’s no longer serving as a top economic adviser to President Obama, but Christina Romer is still sharing her thoughts about economic crisis with Newsweek. It’s unfortunate that readers familiar with the Great Depression encounter this exchange:
Your area of expertise is the Great Depression. Do you see parallels between today and the 1930s?
I do. Living through the recent crisis, I can see that when policymakers have to take extraordinary actions that are often unpopular, there’s a tremendous desire to get back to business as usual. But the reality is that unemployment is still 8.8 percent and the economy remains in desperate need of support.
Why is this unfortunate? The suggestions that policymakers “have to take extraordinary actions” and that the ill effects of those extraordinary actions show that the economy “remains in desperate need of support” demonstrate a complete lack of comprehension of the arguments Amity Shlaes‘ makes so forcefully in The Forgotten Man. Extraordinary government actions exacerbate existing economic problems and turn a normal economic downturn into a “Great” depression or recession.
