Krugman: Economy Still Bad

The human wet blanket, New York Times columnist Paul Krugman warns that recent optimism over the economy may be overblown in a piece today. "The most you can say is that there are scattered signs that things are getting worse more slowly," Krugman writes. While bank earnings numbers that have propelled the stock market to a recent rally are encouraging, they should be taken with a hefty grain of salt thanks to some creative accounting—Goldman Sachs, for example, changed its definition of "quarter" to drop a difficult month from its quarterly earnings report. Even if things are getting better, unemployment is still a long way from improving. According to Krugman, the biggest danger to the economy is that the federal government becomes too optimistic too soon and cuts its recovery programs short. "There's a real risk that all the talk of green shoots and glimmers will breed a dangerous complacency," he writes.