Finance and Economics
Free exchange: A lost decade
Governments prevented a second Depression, but left the world vulnerable.
Ten years ago this month, America entered the “Great Recession”.
A decade on, the recession occupies a strange space in public memory.
Its toll was clearly large.
America suffered a cumulative loss of output estimated at nearly $4trn, and its labour markets have yet to recover fully.
But the recession was far less bad than it might have been, thanks to the successful application of lessons from the Depression.
Paradoxically, that success spared governments from enacting bolder reforms of the sort that might make the Great Recession the once-a-century event economists thought such calamities should be.
Good crisis response treats its symptoms; the symptoms of a disease, after all, can kill you.
On that score today's policymakers did far better than those of the 1930s.
Government budgets have become a much larger share of the economy, thanks partly to the rise of the modern social safety net.
Consequently, public borrowing and spending on benefits did far more to stabilise the economy than they did during the Depression.
Policymakers stepped in to prevent the extraordinary collapse in prices and incomes experienced in the 1930s.
They also kept banking panics from spreading, which would have amplified the pain of the downturn.
Though unpopular, the decision to bail out the financial system prevented the implosion of the global economy.
But the success of those policies, and the relatively bearable recession that resulted, allowed governments to avoid more dramatic interventions of the sort which, after the 1930s, gave the world half a century of (relative) economic calm.
1.labour markets 劳动力市场
例句:The shift has already been manifested in tighter labour markets and higher wages in many sectors.
2.financial system 金融体系
例句:Loss of confidence could trigger a run on Citibank that would threaten the entire financial system.
3.global economy 全球经济
例句:Our trade and our commerce is the engine of our global economy.
4.bail out 营救；保释
例句:Only there would be no one to bail out their creditors if America or Britain showed signs of defaulting.