The linked article reports on comments by Dr. Peter Morici, economist and business professor at the U. of Maryland, in which he discusses the possibility that we are entering a depression.
“We’re probably in a depression now. But it’s not going to be acknowledged until years go by. Because you have to see it behind you,” said Peter Morici, a business professor at the University of Maryland.
The article then goes on to list those factors that economists have traditionally used to define a depression. But it’s this comment by Morici that really caught my eye:
Morici said a depression is a recession that “does not self-correct” because of fundamental structural problems in the economy, such as broken banks or a huge trade deficit.
This may be the boldest criticism of our trade deficit that I’ve seen yet from Dr. Morici , someone who’s gotten a lot of “face time” in the media since the start of this crisis and whose credibility seems to be on the rise. By identifying the trade deficit as a fundamental problem making this recession/depression unable to self-correct, he’s calling for government action to eliminate it. Let’s hope the Obama administration is listening.