Kudlow’s Money Politics

Shiller Backs Away from ‘Late Great Depression’ Remark

After declaring that the world is in a state of “late Great Depression” on Tuesday, renowned Yale economist Robert Shiller hedged his words on that evening’s Kudlow Report. “Did I say that?” he remarked. Well, I think there are a lot of analogies to what we’ve been going through to that of the Great Depression, but I don’t really think we’re in a depression, so I might have said it slightly wrong.”

Shiller, co-developer of the Case-Shiller index on housing trends and author of Finance and the Great Society, told me that while the U.S. is not in recession, certain elements of the economy resemble one. “The persistence of high unemployment is a problem,” he said, along with interest rates at “depression levels.”

On Monday, in an interview with Squawk Box Europe, Shiller said the world is in a “new age of austerity.”  He said, “Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most trusting mood now.”

And when I asked him on Tuesday whether the economy is in a recovery, Shiller said “not quite.”

“Depends on how you define these things. In some ways, we are not in a recovery. Look at the employment-population ratio. It’s stuck at 58.5 percent. That’s kind of close to the lowest it’s been in this whole debacle,” he said. “We haven’t recovered jobs. Unemployment rate is down, but that is because people have left the labor force.”

Shiller also reiterated his support for Keynesian stimulus. “I’ve been advocating raising taxes and expenditures as a temporary measure to get us out of the weak economy,” he said. “That’s the balanced-budget multiplier first proposed by William Salant and Paul Samuelson in the 1940s. Now’s the time to use it.”

And when I challenged him on the idea that President Obama’s stimulus hasn’t worked, Shiller defended it. “We’ve had a worse recession than anybody expected,” he said. “I don’t think it proves that the principle is wrong. I think we need to do that. We can’t give up on the economy.” Shiller claimed that the Obama stimulus has had “no impact on the natural debt.”

He did, however, say that he still believes in market forces. “I would like to see financial markets expanded,” he said, adding that he had faith that the stock market was still a good bet.

Asked to weigh in on Jeremy Siegel’s prediction that the Dow would hit 17,000 by the end of 2013, Shiller took a more modest outlook. “I agree with [Siegel] that stocks are a good investment,” he said. “I’m just not as high and gung-ho as Jeremy is.” 

Larry Kudlow — Larry Kudlow is the author of JFK and the Reagan Revolution: A Secret History of American Prosperity, written with Brian Domitrovic.

Most Popular

Film & TV

The Dan Crenshaw Moment

Given the spirit of our times, things could have gone so differently. On November 3, when Saturday Night Live comic Pete Davidson mocked Texas Republican Dan Crenshaw’s eye patch, saying he looked like a “hit man in a porno movie” — then adding, “I know he lost his eye in war or whatever” — it was a ... Read More
Elections

Fire Brenda Snipes

Brenda Snipes, the supervisor of elections in Florida’s Broward County, does not deserve to be within a thousand miles of any election office anywhere in these United States. She should be fired at the earliest possible opportunity. Snipes has held her position since 2003, in which year her predecessor, ... Read More
World

How Immigration Changes Britain

Almost nothing is discussed as badly in America or Europe as the subject of immigration. And one reason is that it remains almost impossible to have any sensible or rational public discussion of its consequences. Or rather it is eminently possible to have a discussion about the upsides (“diversity,” talent, ... Read More
PC Culture

The Lonely Mob

Just before the election, an Andrew Gillum intern named Shelby Shoup was arrested and charged with battery after assaulting some college Republicans on the campus of Florida State University. It was rather less exciting than that sounds: She went on a rant about “Nazis” and “fascism” — Gillum’s ... Read More
Elections

Sorry, Brian Kemp Still Won

Here was the state of play as of yesterday per the Kemp campaign’s breakdown of publicly available information: As of Saturday, November 10, 2018 (12:00 p.m.) *Information below is public.  Total votes reported: 3,924,658 Kemp: 1,975,162 (50.33%) Abrams: 1,912,383 (48.73%) Metz: ... Read More