Evan Soltas
Jul 11, 2012

1932, or 2012?

"In the United States it is almost inconceivable what rubbish a public man has to utter to-day if he is to keep respectable. Serious and sensible bankers, who as men of common sense are trying to do what they can to stem the tide of liquidation and to stimulate the forces of expansion, have to go about assuring the world of their conviction that there is no serious risk of inflation, when what they really mean is that they cannot yet see good enough grounds for daring to hope for it."

Via Bruce Bartlett's most recent piece for The New York Times' "Economix" blog, I came across this fascinating old article in The Atlantic which John Maynard Keynes wrote in support of reflation and government spending, from which comes the above excerpt.

By the end of the deflation in 1933 -- almost four years after it began in 1929 -- the Consumer Price Index had fallen by more than 25 percent. (See here for a graph.)

The extent to which this quote feels contemporary both amazes and disturbs me.