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Dean Baker Snark


They kept spraying water on the wood, but they just couldn't get the fireplace started. The Post wrote the equivalent in an article on the Greek crisis:

"The government has raised taxes and cut services and is announcing tougher steps every other week. So far it has been to no avail; the economic outlook keeps getting worse, not better."

And therefore, prepare for worldwide economic collapse:

The German government agreed Thursday to bolster the ESFS. That's encouraging news but many analysts say it's insufficient to contain Greece's collapse on its own.

If those analysts are right and no further steps are taken, the U.S. is exposed via trade and finance. "Europe back in recession hurts US exports, since they buy less. Worries about the Euro lead to a stronger dollar/euro exchange rate, which further hurts U.S. export competitiveness. US banks and money market funds have exposure to Europe, so their balance sheets are damaged if Europe goes under."

This has led economist Nouriel Roubini to conclude it's not just a question of if the U.S. will tumble back into recession, but of how deep it will be.

By fnord12 | September 30, 2011, 10:57 AM | Liberal Outrage