This article, “Revenge of the Glut” is very similar in content to the President’s recent address to Congress. President Obama pointed out, as did Mr. Krugman, that American’s are gluts. Mr. Krugman is targeting our past and present saving mode, yet President Obama pointed out our glutens behavior in living above our means. The subprime crisis Mr. Krugman mentioned from the ‘good old days’ was a direct result of Americans choosing to live above their means. In the late ‘80’s and 1990’s we purchased homes that were out of our financial grasp, but acquired mortgages that were below the subprime allowing us to live above our means. There is no real blame mentioned in this article, nor in the President’s speech. There is no blame cast on the mortgage companies, banks, realtors, or home buyers; yet there is an explanation for all of this downward economic spiraling. There is the influx of foreign monies mentioned in Mr. Bernanke’s speech, and the American dollars that went to other countries also; but none of this was enough to offset the gluten of American homebuyers.
The author is definitely addressing the average citizen, and his terminology and language exemplify that. He has not actually shown a specific side as I can determine from his wording, yet he does appear to have a view. Krugman sounds as disappointed in the slump as everyone else in the country. He sees the mess we have created clearly, but like the rest of us he does not have a solution. We continue to save due to our fears of the economy, we continue to live above our means, and we may have taken on an attitude of thrift, but it is still one of living above our means and saving for fear of not having a future.
Krugman wants us to see what is going on in the world and how we have repeated the same mistakes as our parent’s generation. He has laid it out, but not given us a solution. Is there a solution? Have we learned from history?
