The financial crisis and the recession are separate beasts, and we don’t usually get both at the same time. Everyone conflates these, and we should know better. There are financial crises without recessions (like the S&L crisis of the late 80’s), and nasty recessions without financial crises (like 1973-5). We haven’t had them coincide since 1929-1933. In particular, note that this recession’s first 9 months were relatively mild until the financial crisis hit and doubled the fun.
There’s an arthouse film called Thirty-Two Short Films About Glenn Gould. You’re getting Twenty-Six Short Posts from Dr. Tufte. :) These are on why it’s difficult to understand the current macroeconomic situation.
Joe Baker is not a macroeconomist, but we all do a little bit of everything at SUU, so he has to teach principles of macroeconomics sometimes. The other day he asked for pointers about summing up for his students why we can’t quite figure out what’s wrong with the economy. I came up with 26 reasons, most of which have been discussed in class, and all of which are now required.