In a Business Week interview, William Wolman gives a very sensible take on the current US economy (that is, he and I agree on almost every point). Highlights are
(i) His critique of Greenspan for not deflating the bubble earlier
(ii) His discussion of pension liabilities, particularly those for firms with defined benefit plans
On the latter point, it’s also worth looking at The New Pinch from Pensions. Paul Krugman estimates the impact at “50 WorldComs”, but doesn’t say how much a WorldCom is. I assume he means the $4 billion in outright fraud, making the total impact $200 billion. Since this would occur with -6 per cent returns, it looks conservative.
More on pensions as a 50+ supporter of Social security privatisation recants.
And a bit more from Floyd Norrisat the NYT