Gisi

Why We Need a Recession

Your article makes a very good point and I especially agree with your last comment regarding the Fed's obligation to interfere. However, this ultimately goes back to the underlying problems in American capitalism. The recession is not only necessary to move us through the economic cycle but also to, in a way, reinvent American values. A sort of a call back to reality.

I think it's absolutely ridiculous, for example, that as the price of gas increased, Americans become enamored with hybrid cars and saving the environment. Then gas prices dropped and now consumers welcome back with open arms those unnecessarily large SUVs (though clearly not enough for the Big Three). This just goes to show that Americans DON'T believe in saving money. They want to spend every bit they have and a lot of what they don't have if they can get their hands on it. What I'm seeing now is two extremes: one causing the economic meltdown and the other prolonging it.

What we really need is to encourage saving everyday, not only in emergencies. As the saying goes, buy an umbrella on a rainy day.