A correspondent with senior experience in government emails with respect to Battered
but Not and Beaten:
You should be a lot less depressed, and a lot prouder of the economics profession's role over the past three years. Remember Barry Eichengreen's and Kevin O'Rourke's observation: because of the extraordinary leverage of the shadow banking system and the complete lack of control of senior management over their firms' derivative books, we had an initial shock that was larger than that which produced the Great Depression.
But we do not have 23% unemployment.
We do not even have the 16% unemployment of the Zandi-Blinder baseline.
Instead, we have only 10% unemployment.
That is a great victory. It is not the victory that we would have wanted to have. But it is a great victory.