Sean King

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San Juan, Puerto Rico, United States

Tuesday, January 19, 2010

Why Such a Deep Recession?

Arnold Kling:
Several economists, not just Scott Sumner, have argued that the recession is too deep and too broad to be explained by the Recalculation Story. I think that there are many weaknesses in the Recalculation Story. It is far from a well established scientific thesis.

However, I would suggest that explaining the depth of the recession is a challenge for just about any macroeconomist. There is no well-established theory that can explain how we got to 10 percent unemployment.

If by "well-established" he means "orthodox", then I suppose Mr. Kling is correct. But, there are heretical theories of economics that not only explain how we got here, but also successfully predicted these events in advance.

I would add to the above-linked list of "those who saw it coming" the following:

1) Robert Prechter
2) Harry Dent
3) Martin Weiss

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