Until a few months ago, it was accepted wisdom that the American economy functioned far more smoothly than in the past. Economic expansions lasted longer, and recessions were both shorter and milder. Inflation had been tamed. The spreading of financial risk, across institutions and around the world, had reduced the odds of a crisis.
Back in 2004, Ben Bernanke, then a Federal Reserve governor, borrowed a phrase from an academic research paper to give these happy developments a name: â€śthe great moderation.â€ť
These days, though, the great moderation isnâ€™t looking quite so great â€” or so moderate....
Of course, this is a NY Times article, which may explain a lot. The Times is liberal, supports liberal Democrats, and this is election year. A recession would help the cause, therefore spin the doom scenario. Doesn't matter that aside from oil price inflation and housing deflation, most of the economy is chugging along, thank you very much, with low inflation, decent corporate bottom lines, and low unemployment rates. But the Times, like the Democrat contenders for President, must present darkness, that they may be elected in order to bring light. And they are smart enough to know that creating the perception of awful things to come, will feed fear and cause the responses that bring about these necessary (for them) awful things. Markets and economies these days often respond from emotion rather than the intellect. This plays right into the hands of the non-thinking, but emotionally astute Democrat liberal politicians.