The article "Revenge of the Glut" was published on March 1, 2009 in the New York Times. The author Paul Krugman is an opinion columnist for the New York Times. This article talks about what might have led our economy into a downward spiral it is in now. Mr. Krugman is an American economist and professor of economics and international affairs. Krugman is a recent winner of the Nobel Prize in Economic Science for his take on trade patterns and economic activity. So Mr. Krugman is no stranger to watching the economy, and is educated enough in this subject to make his opinion valid.
Krugman helped predicted; before the crisis happened; that the housing market was going to soon fall. He predicted that it would soon fall to 25% over all and 50% in high populated areas like Miami and Los Angeles. He also blamed the economic fall on two people and they would be Greenspan and Gramm. As Krugman thinks that the housing market was a part of the economic downfall; it was not the only thing. There were several things that got rolled into a ball causing the downhill snowball effect.
Home loans, interest rates, borrowers of money, the account deficit, US currency rate, plus more problems helped our economy be thrown out of whack. In turn the whole world's economy has seen a huge drop. The greed of many people on the political level and else where also did not help our economy. Bankers, Wall Street investors, and many other trading company investors are now having to reap what they have sown. Also, large capital flows ended up flowing into the Untied States placing all the burden on us. It was almost as a tornado came down and hit our economy; causing a catastrophic mess.
If you ask me it was bound to happen almost putting the saying to use. That history repeats itself. Mr. Krugman is trying to inform everyone on how this happened, and argue that we should have seen this coming. I mean how could we have not seen this coming. People buying houses they could not afford, and banks deceiving them into thinking they could. Credit card companies giving credit to those who have already has bad credit. Also the federal government bailing out companies like Bear Stearns in an already overloaded deficit. This then obligated the federal government to help other failing companies; thus making other companies cry wolf. There were several things the government could have done to help stop this but were obviously blinded by other things that seemed more important than this. So now thanks to greed and other things us as Americans now have to face huge inflation, joblessness, and homelessness. Even though we are in a resection if something is not done soon then we are going to slip back into history and go back into another depression.
