Nomura economist Richard Koo is out with a new note that treads a lot of familiar ground.
He is relieved that Obama won the election, because he’s more in favour of fiscal stimulus though he is worried about the fiscal cliff.
He notes that if there were any kind of premature austerity, the US would go into double-dip recession, and so forth, and that that would make the deficit worse in the end.
This is all in keeping with his notion of a “balance sheet recession,” which is distinct from most recessions in that monetary policy can’t address them, and then they must be addressed via the government spending money to repair private sector balance sheets.
In the middle he tantalizingly takes a swipe at two US newspapers.
He writes about his frustration with teaching the US about the the balance sheet recession:
Seeing that the dangers of balance sheet recessions had not been mentioned in any of the televised presidential debates, I made a point of writing an introductory article about them for a major US newspaper. However, the article was rejected as being too difficult for a general readership.
I then submitted the piece to another major US daily, with the same result.
Soon after, I was fortunate enough to receive a request from the Financial Times for just such an article, and this time it was quickly accepted. The article was published in last Monday’s paper under the title “Explain the disease, then US citizens will feel better.”
The title on the FT’s website is “Explain the disease to help US citizens,” and the URL is http://www.ft.com/intl/cms/s/0/b1dfd2f0-243e-11e2-94d0-00144feabdc0.html#axzz2Byr7vY Xq)
So, anyone have any guesses which two newspapers didn’t think their readers were smart enough for Koo?
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