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As the stock market reaches new record highs, Wall Street’s ‘fear gauge’
also is rising. Here’s what that means.
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The VIX doesn’t usually rise when the market is closing at records.
15 minutes ago
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The discussion touched on many themes, but the increasing need for economists -- and politicians -- to learn the lessons of history was a key point. Both Krugman and Stigtliz appeared troubled that much of our economic misery is not the result of uncontrollable forces, but self-inflicted pain springing from a failure to appreciate the lessons learned in past crises and to understand the role of government in creating and maintaining a strong economy.
Krugman, author, most recently, of End This Depression Now , pointed out that a glance at history provides "overwhelming confirmation that increased government spending would be freeing" in an economic situation like that which America currently faces. He explained that such spending was not merely a "sugar pill" and reminded the audience that a properly stimulated economy --which can come with a little inflation -- allows people to pay their debts down. Such debt doesn't tend come back, which gives people a more firm financial footing. Stiglitz added that government investments in things like road construction have a high rate of return, and they allow businesses to flourish. On the contrary, when you spend on war and dropping bombs, he noted drily, you don't get much back.
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