DEPRESSIVE PASSIVISM: A LETTER TO THE ECONOMIST (February 4, 2008)
The American response to the threat of recession certainly deserves your verdict: aggressive activism (“Aggressive Activism,” February 2, 2008). In addition to the fiscal-stimulus package of slightly over one-percent of the gross domestic product, which will soon be passed by the Congress, the Federal Reserve Board has slashed the prime rate of interest twice in a row to slightly under one-percent above the official inflation rate. Wow! One cannot but wonder what will come next, though. All will be well if the economy picks up, no matter how slowly, but what if it does not? Given that both the Congress and the Fed have used up all their ammunition in one fell swoop, there can be hardly any doubt about the sequel to aggressive activism: depressive passivism.