Why are things getting worse?


By Arthur MacEwan
Dollars & Sense


Dear Dr. Dollar:

I learned in my economics classes that in a market economy, problems tend to be self-correcting: when a recession starts, demand weakens; then prices drop, people and firms start to buy more and the economy picks up again. So why don’t we see this kind of self-correction now? Why does it seem as if things are getting worse and worse?
—Corina Chio, Los Angeles, Calif.


Life, it turns out, is more complicated than the way it is presented in many economics classes. “More complicatedâ€