So the Nobel Prize-winning economist Paul Krugman has spoken: The "usual tools of economic policy — above all, the Federal Reserve's ability to pump up the economy by cutting interest rates — have lost all traction" ("Depression Economics Return," Nov. 14, The New York Times).
The article brought to mind my friend Takafusa Shioya's conclusion in his book about the Japanese economic bubble that burst in 1989. Measures that had worked earlier did not work in dealing with the aftermath of the bubble. A top economic officer while in government, Shioya observed the policy struggle firsthand, often as part of it.
So, the worry now is that the United States might repeat the Great Depression. As this has come to the fore, the concern has receded that it might have to go through what Japan did after its bubble. Also, in place of the talk a few years ago of the onset of the decline of the American empire as President George W. Bush's wars against Afghanistan and Iraq refused to go as planned, the talk today is of a "historic geopolitical shift" now that "the American free market creed has self-destructed."