A new study by Alan Blinder, the distinguished economist and former Fed vice chairman, and Mark Zandi, chief economist of Moody's Analytics, finds that the federal response to the Great Recession almost certainly averted a second Great Depression. They write:

The U.S. economy has made enormous progress since the dark days of early 2009. Eighteen months ago, the global financial system was on the brink of collapse and the U.S. was suffering its worst economic down- turn since the 1930s. Real GDP was falling at about a 6% annual rate, and monthly job losses averaged close to 750,000. Today, the financial system is operating much more normally, real GDP is advancing at a nearly 3% pace, and job growth has resumed, albeit at an insufficient pace.

From the perspective of early 2009, this rapid snap-back was a surprise. Maybe the country and the world were just lucky. But we take another view: The Great Recession gave way to recovery as quickly as it did largely because of the unprecedented responses by monetary and fiscal policymakers.

You can read a summary of the paper here, and it's also available for download on Dismal Scientist.

This won't end the debate on either end of the spectrum. Conservatives argue that the intervention made things worse. Liberals contend the stimulus was too small and not targeted to investments that would repay the Treasury with new jobs, industries and productive infrastructure. Most Americans believe the bankers got off too easy while average folks pay the price.

But this is real research, not a polemic. It's probably the most detailed and objective view we have so far of the response to the panic and recession. Among the findings are that the combined bailouts and stimulus saved 8.5 million jobs and slowed the decline of GDP to 2.4 percent in 2009 instead of 7.4 percent. The moves by the Bush and Obama administrations also prevented full-blown deflation.

Expanding Washington state's export footprint: The Port of Grays Harbor will get $2 million in federal money for the construction of auto terminal rail tracks and another $2 million no-interest loan for rail infrastructure from the Washington State Community Economic Revitalization Board. The federal funds were announced last week by U.S. Sen. Patty Murray. The port hopes to raise $15 million to expand its rail capacity for moving autos and agricultural products.

Today's Econ Haiku:

Why is my iPhone
Worse now? A new Jobs brainstorm:
The Slow Phone Movement