Kevin Drum on Robert Samuelson's latest column, "Recession's Hidden Virtues":
The Great Depression Really Was Great!...., by Kevin Drum: Robert Samuelson looks on the bright side of the recession that he thinks is coming our way soon:
Recessions also have often-overlooked benefits. They dampen inflation. In weak markets, companies can't easily raise prices or workers' wages.
Stagnant wages are an "often-overlooked benefit" of recessions?
His basic argument seems to come down to recessions that aren't very bad aren't very bad. He even throws out the bad ones to make the point that mild recessions are mild:
[P]opular rhetoric exaggerates the damage. By and large, recessions are problems, not tragedies. Since World War II, there have been 10 of them, or one about every six years. On average, they've lasted 10 months... Disregarding two severe recessions -- those of 1973-75 and 1981-82 -- peak monthly unemployment has averaged 7.1 percent.
It is true that economic fluctuations have been less severe since 1984, but past performance is no guarantee of future results and I am not yet ready to declare that severe economic downturns are a relic of the past (though the same cannot be said for some columnists who still use notions of cost-push inflation arising from union power to explain inflation).