You might want to check out this intriguing presentation from Richard Koo (the “balance sheet recession“ guy) about the global economic crisis.
He never said it but it’s often attributed to Albert Einstein: doing the same things and expecting different results is a sign of insanity. We’ve been doing the same things as the Japanese.
We’re all going “Japanified”? That’s a word, and its socially-acceptable?
Koo has a chart that appears to indicate that we have recovered from the policy mistakes from the collapse of Lehman Brothers, but we have not recoverd from the balance sheet problems at all. Does anybody know what he thinks those policy mistakes are?
Our policy makers (I have come to loathe that phrase) adhere to the same schools of economic thought as the Japanese. So we try the same policies, only we do it way harder.