> Severe recessions often turn out to be more severe and longer-lasting than is expected.If Peck is right, then our country is on track to follow the pattern, which means we are in for a long difficult decline in our economy. What prospect is there that this country will recover?
> In periods of economic stress, governments tend to retreat, reducing their commitments, and thus make the economic downturn worse. This seems to be a pattern in other societies than our own.
> Governments commonly underestimate the true cost of economic retreat and conservative spending. At the same time they overestimate the risks of taking aggressive steps to resolve an economic crisis. This has taken place over and over again in American history. Administrations commonly have done too little whereas more expansive commitments actually have helped the economy recover more quickly.
> True recovery requires adjusting to the wider patterns of change in the world at large.
> The primary agenda should be to help the middle class recover.
> A economic depression worsens class distinctions, so that the interests and perspectives of socioeconomic classes become all the more distinct. He refers to it as a “cultural separation” that tends to sort the populations into winners and losers. As a result, the ways of life of the nonprofessional middle class become more like those of the poor while the well-to-do develop ways of life that are quite different financially and emotionally.
Friday, August 12, 2011
Peck's comparative insights on why economic depressions become so severe
Don Peck’s new book, Pinched, How the Great Recession Has Narrowed Our Futures and What We Can Do About It makes several sobering points about how public sentiment during an economic downturn can make a bad situation worse. Several assertions of that book are worth giving serious thought to.