Ferguson joisted with Krugman, especially about the potential hyperinflationary effects of the government's printing money, not specifically regarding backing up all the bad debt in the financial system but decrying the fiscal stimulus. On the other hand, Paul (who believes that all this talk about hyperinflation is a way to wage war against further stimulus) despaired for the near future of ordinary Americans, which is 99.9% of all of us who are being laid off to the tune of 600,000+ per month.
I thrilled to Paul's thundering words:
The other thing not to miss is the importance of a strong social safety net. By most accounts, most projections say that the European Union is going to have a somewhat deeper recession this year than the United States. So in terms of macromanagement, they're actually doing a poor job, and there are various reasons for that: the European Central Bank is too conservative, Europeans have been too slow to do fiscal stimulus. But the human suffering is going to be much greater on this side of the Atlantic because Europeans don't lose their health care when they lose their jobs. They don't find themselves with essentially no support once their trivial unemployment check has fallen off. We have nothing underneath. When Americans lose their jobs, they fall into the abyss. That does not happen in other advanced countries, it does not happen, I want to say, in civilized countries.
In all the millions of words (along with the trillions of dollars) printed about this re/de/pression started December 2007, the pundits often overlook human suffering.
Niall became sarcastic, invoking the "lessons" of the 1970s:
The lesson of economic history is very clear. Economic growth does not come from state-led infrastructure investment. It comes from technological innovation, and gains in productivity, and these things come from the private sector, not from the state.
What could be more technologically innovative than synthetic CDOs (collateralized debt obligations) built according to mathematical models based on highly fallible projections? Or credit default swaps? Or securitization? And everyone agrees they are at the heart of this horrible economic disintegration.
As far as productivity goes, well, when you fire 4 out of 5 people in a company, that one person has to pick up the slack and eureka! productivity soars. So don't worry, Niall. Unemployment will continue to grow.