Bill Gross, the so-called bond king, whose monthly market investment outlook never fail to be penetrating has this to say in his latest entry:
As Keynes theorized and then Krugman affirmed, when private demand falters, it becomes the responsibility of government to fill the breach. Because it likely will not do so effectively until after a new Administration is elected in late 2008, the U.S. economy and its somewhat coupled global companion will sleep walk for some time and a resumption of prosperity as we knew it will be dependent on reforms of monetary and fiscal policy resembling the 1930s more than our past decade.
As the Great Depression and the 1930's in general are bandied about more and more it was only a matter of time before Keynes became fashionable again. Should what is now only an economic slowdown turn into something more sinister and prolonged, we should be hearing a lot more of this kind of chatter. If, God forbid, this morphs into a global depression, as some are already predicting, the name Karl Heinrich Marx could possibly start popping up here and there.
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