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The Great Recession will turn into the Great Depression II unless...

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Yes, it's sure to turn into the Great Depression II unless our governments STOP trying to reduce budget deficits and turn instead to what should be their top priority: job creation. Balanced budgets have become a political mantra, and the unemployed be damned!

And yet, as I blogged last week, the bottomline problem in this crisis is the LACK of jobs, especially among the young.

How could our political class get it so wrong? It's hard to understand. Yet one thing should be obvious: with the retreat of government as an economic agent in an economy that is still weak, economic indicators have but one way to go: DOWN. And that includes the revenue governments get from taxes. Which means that overtime budget deficits will grow larger rather than smaller. Politicians will have obtained exactly the reverse of what they had hoped for from their hallowed austerity measures. If you have any doubts, take a trip to Greece or Ireland.


Paul Krugman has recently published…

Unemployment, a Hydra that keeps growing

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Unemployment is the one feature that distinguishes the current crisis from past ones. It just won't go away.Why?

A hard question to answer. It's been haunting economists since the Great Depression - the last time unemployment would NOT go away. To cure unemployment, Keynes came up with a solution that was deceptively simple: replace the shortfall in private investment with government spending. Pump money in through paying out salaries even for useless activities like digging holes. That will strengthen consumption and jump-start the economy. Industries will be encouraged to expand employment as they see a renewed demand for their products.

That was back in the 1930s. And we all know how it played out in the end. President Roosevelt didn't dare keep up with the Keynesian recipe because of the political upcry over the ballooning deficits. So, in 1937 he went back to old-fashioned deficit cutting and budget balancing. With the result that the economy immed…

Whatever Happened in Haiti?

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Have you been wondering what's been happening in Haiti since the earthquake? I certainly have. It seems like a century has passed, yet it was only some six months ago, on 12 January 2010. Recently the press has been mum on the subject and focusses on the latest,  the floods in Pakistan - serious stuff, with 4 million displaced and 1500 killed - and the fires in Russia...

Well, almost mum except for an excellent comment in the International Herald Tribune (August 6) made by Joel Brinkley, a journalism professor at Stanford University with a long experience as foreign correspondent for the New York Times. The title is arresting: "Don't let Haitians help themselves" ! He argues rather convincingly that the Haitian authorities are hopeless and that nothing will ever be done if one waits for them to take things in hand. Not to mention endemic corruption. So he calls for donors to forge ahead without waiting for President Préval to make decisions. Other…

Tricks in Cooking - for a superb Melanzane alla Parmigiana

I've said it before and I'll say it again: I'm convinced that cooking METHODS are far more important than actual recipes if you want to be known among your friends as a "good cook". And unfortunately, most cookbooks don't give you the tricks of the trade. No, that's not quite right: some cookbooks do, but they rarely tell you everything. There are cooking secrets so well kept that they never, ever surface anywhere!

That's the case with melanzane alla parmigiana, a cheese and eggplant dish that is a classic of Italian cuisine. In most restaurants, it's a disaster. Lukewarm, oily, swimming in old tomato sauce with gooey cheese that gets stuck in your teeth. Actually the cheese - usually slices of mozarella - tastes of nothing at all. And that yellow and black stuff in the middle, that feels like a greasy sponge, is (presumably) eggplant. Poor eggplant...

Once, a long time ago, in a small trattoria in the countryside near Naples, I had a superb melan…