Business-investment hemorrhaged in 2000-01 — don’t forget it.
Larry Kudlow is one of my favorite living economists, and in this item from The National Review he explains why the recent recession was a serious one indeed. He also takes Alan Greenspan to task for failing to see the deflationary period as the danger it was and how it affected capital investment and thus job creation. The seed corn of an economy is the cash it can put back into the improvement of productive activity, and it dried up for several years due to deflation. Only now is it coming back again. Will the fed repeat its mistakes? Stay tuned.
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