Japan and the US situation have a lot in common and have been compared by many and Yes, this is a different beast than previous recessions and overcapacity is surely out there.

But having said that, let me defend the Fed for a second and ask if our situation is really all that bad. GDP is up 2.4% for 2002, unemployment is at a somewhat high but not unbearable level around 6% (it wasn’t that long ago we thought 5% unemployment was full employment) Inflation isn’t an issue nor is deflation. We have gone through corporate scandals, a bear stock market, and a world changing terrorist act and we’re still standing.

Did the Fed do such a bad job? What could they have done differently?