Facts matter: Sign up for the free Mother Jones Daily newsletter. Support our nonprofit reporting. Subscribe to our print magazine.


THE RECESSION COMETH….Atrios points us to the latest from Nouriel Roubini, the Cassandra of the banking crisis:

Nouriel Roubini, the professor who predicted the financial crisis in 2006, said the U.S. will suffer its worst recession in 40 years, causing the rally in the stock market to “sputter.”

“There are significant downside risks still to the market and the economy,” Roubini, 50, a New York University professor of economics, said in an interview with Bloomberg Television. “We’re going to be surprised by the severity of the recession and the severity of the financial losses.”

The economist said the recession will last 18 to 24 months, driving unemployment to 9 percent, and already depressed home prices will fall another 15 percent. The U.S. government will need to double its purchase of bank stakes and force lenders to eliminate dividends to save them from bankruptcy, Roubini added.

This actually sounds about right to me. Another round of recapitalization strikes me as at least a 50-50 probability; forcing banks to suspend dividends sounds like a painful but necessary move; and there’s really no question that we’re headed into a fairly deep recession. In fact, what really surprises me is that it’s only in the past week or so that newspapers have stopped running fatuous headlines along the lines of “Is U.S. Slipping Into Recession?” Of course the U.S. — and the rest of the world — are slipping into recession. Frankly, I think that’s been obvious for months, but certainly nobody sentient could have doubted it anytime after mid-September.

And my arcane concerns about the current account deficit notwithstanding, massive stimulus is pretty obviously the right fiscal response to this now that monetary policy has been mostly played out. Along those lines, check out Steve Teles for some good ideas on what a stimulus package should look like. “Right now the Democrats are in danger of doing the obvious,” he warns, “which will be bad economics, bad government, and bad politics. Someone needs to get them thinking bigger.” Get to work, blogosphere!

THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

payment methods

THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate