We’re hearing about “glimmers of hope" from policymakers, but the president’s biggest lefty naysayer has a word of warning: “Don’t count your recoveries before they’re hatched,” Paul Krugman writes in the New York Times. “Premature optimism” has been disastrous during previous downturns, and we can’t let “complacency” foil us now. “The most you can say is that there are scattered signs that things are getting worse more slowly.”
Four reasons not to jump the optimism gun:
- Despite some positive signs, “things are still getting worse”: foreclosures are up again, industrial production is down.
- Some of the “glimmers” don’t hold up: Banks may be arranging their bookkeeping to make things look better than they are.
- The Great Depression saw “a pause in the plunge” before the situation got worse.
- Even after the recession ends, it will take time for employment to turn around.