Who Is in Charge? Economic Crisis Worsens Because of Transitional Power Vacuum
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Krugman brings up something this morning that I was coincidentally chatting about over dinner with a friend last night -- what are the ramifications of having the lamest of lame ducks visibly uninterested and engaged at this moment of economic crisis, (not to mention a congress that has time to laud convicted felons in their midst but can't seem to stick around to deal with this huge problem developing in Detroit?) I vaguely recalled something similar in 1932 but couldn't remember the details.
Krugman fills in the blanks:
There is, however, another and more disturbing parallel between 2008 and 1932 -- namely, the emergence of a power vacuum at the height of the crisis. The interregnum of 1932-1933, the long stretch between the election and the actual transfer of power, was disastrous for the U.S. economy, at least in part because the outgoing administration had no credibility, the incoming administration had no authority and the ideological chasm between the two sides was too great to allow concerted action. And the same thing is happening now.