Robert Reich, the former Secretary of Labor in the Clinton administration (now acting as one of Obama’s informal economic advisors along with Warren Buffett and others) predicts the economy will begin to turn around in “two or three years” with prudent federal investment, but warns that U.S. unemployment rates may rise significantly without “effective government action.”
If you get the chance to watch the whole speech (about an hour long, with the Q&A) delivered last week to the Commonwealth Club of California, you’ll be rewarded with a refreshingly straightforward explanation of the causes of the current deep recession (or “liverwurst” Reich suggests it just might as well be called rather than a “Depression”) and sensible prescriptions for jump-starting the American economy in addition to more ambitious spending initiatives that he realistically notes won’t likely have any significant impact for years to come. Whether you agree or disagree with his philosophy, Reich is, as always, a delightfully engaging and edifying speaker.
From a Canadian perspective, if Reich is correct (taking the middle road between the “Pollyannas” and the “Chicken Littles”) then we can likely expect to be in much the same boat as our friends south of the border for the same period, or possibly even somewhat longer when accounting for delayed reaction time. Can a Harper minority government — firmly in the camp of the Pollyannas for the most part, except when they erratically flip-flop and act like the gloomiest of doomsayers — weather the storm through this year, into the next with no prospect of the cycle turning for another year after that?