Debating the Economy

Paul Krugman on the economic debate:

Yet a destructive passivity has overtaken our discourse. . . . The truth is that creating jobs in a depressed economy is something government could and should be doing. Yes, there are huge political obstacles to action — notably, the fact that the House is controlled by a party that benefits from the economy’s weakness. But political gridlock should not be conflated with economic reality.

Paul Krugman, "No, We Can't? Or Won't?" New York Times, 11 July 2011.

1938 again?

Paul Krugman, "1938 in 2010," New York Times, 6 September 2010.

Now, we weren’t supposed to find ourselves replaying the late 1930s. President Obama’s economists promised not to repeat the mistakes of 1937, when F.D.R. pulled back fiscal stimulus too soon. But by making his program too small and too short-lived, Mr. Obama did just that: the stimulus raised growth while it lasted, but it made only a small dent in unemployment — and now it’s fading out. . . .

Paul Krugman has been warning about this possibility for two years, and he says it is now showing signs of happening.