Not My Fathers Recession | Christina D. Romer
Christina Romers parting speech at the National Press Club yesterday. Very unwonky, it really struck a nerve with me.
The current recession has been fundamentally different from other postwar recessions. This is not my father’s recession. Rather than being caused by deliberate monetary policy actions, it began with interest rates at low levels. It is a recession born of regulatory failures and unsound practices that contributed to a housing bubble and eventually a full-fledged financial crisis. Precisely what has made it so terrifying and so difficult to cure is that we have been in largely uncharted territory. An all-out financial meltdown in the world’s largest economy and the center of the world’s financial system is something the world has experienced only once in the past century — in the 1930s. Thus, the President took office in the midst of a recession of historic proportions, but for which history provided little guidance.
This afternoon, I want to talk about the tremendous economic challenges the country faced in January 2009 and the challenges we continue to face as we reach the second half of 2010. I want to discuss what I think we have learned over the past twenty months about the causes of our economic difficulties, what we have accomplished through extraordinary policy actions, and the tremendous work that remains before the economy is fully recovered.