No One Likes Double-Dipping

The Financial Times reported yesterday that an influential economist who predicted the economic crash of 2007/8 is warning people that we are in for a double-dip recession. That is, a recession with a slight leveling out (even followed by moderate economic growth), but ending with yet another crash.

The economist, William White, former chief economist for the Bank for International Settlements, credits the Federal Reserve under Alan Greenspan's mantra of "persistent cheap money" for the crash. He further observes that the central banks pumping trillions of dollars into the world economy will create an artificial bubble that will inevitably collapse.

So, basically, because governments are so worried about creating quick-fixes they are creating a system that will inevitably leave everyone worse off than they were before. The message here: if the government left the economy alone and let regular old supply and demand stabilize everything we'd be out of this mess quicker, and for a longer period of time.

William White isn't alone. The number of economists warning about a double-dip recession isn't small. Here's another article making the same warning. And another. And another. And another.