Even under F.D.R., there was never the political will to do what was needed to end the Great Depression; its eventual resolution came essentially by accident.I had hoped that we would do better this time. But it turns out that politicians and economists alike have spent decades unlearning the lessons of the 1930s, and are determined to repeat all the old mistakes. And it’s slightly sickening to realize that the big winners in the midterm elections are likely to be the very people who first got us into this mess, then did everything in their power to block action to get us out.
But always remember: this slump can be cured. All it will take is a little bit of intellectual clarity, and a lot of political will. Here’s hoping we find those virtues in the not too distant future.
From Paul Krugman’s 7/15 column in the New York Times:
Republicans are feeling good about the midterms — so good that they’ve started saying what they really think. This week the party’s Senate leadership stopped pretending that it cares about deficits, stating explicitly that while we can’t afford to aid the unemployed or prevent mass layoffs of schoolteachers, cost is literally no object when it comes to tax cuts for the affluent.
And that’s one reason — there are others — why you should fear the consequences if the G.O.P. actually does as well in November as it hopes.
The main moral you should draw from the charges against Goldman, though, doesn’t involve the fine print of reform; it involves the urgent need to change Wall Street. Listening to financial-industry lobbyists and the Republican politicians who have been huddling with them, you’d think that everything will be fine as long as the federal government promises not to do any more bailouts. But that’s totally wrong — and not just because no such promise would be credible.
For the fact is that much of the financial industry has become a racket — a game in which a handful of people are lavishly paid to mislead and exploit consumers and investors. And if we don’t lower the boom on these practices, the racket will just go on.
For today’s G.O.P. is, fully and finally, the party of Ronald Reagan — not Reagan the pragmatic politician, who could and did strike deals with Democrats, but Reagan the antigovernment fanatic, who warned that Medicare would destroy American freedom. It’s a party that sees modest efforts to improve Americans’ economic and health security not merely as unwise, but as monstrous. It’s a party in which paranoid fantasies about the other side — Obama is a socialist, Democrats have totalitarian ambitions — are mainstream. And, as a result, it’s a party that fundamentally doesn’t accept anyone else’s right to govern.
But let’s all take a deep breath, and consider just how much good this bill would do, if passed — and how much better it would be than anything that seemed possible just a few years ago. With all its flaws, the Senate health bill would be the biggest expansion of the social safety net since Medicare, greatly improving the lives of millions. Getting this bill would be much, much better than watching health care reform fail.
—Paul Krugman on Pass the Bill, NY Times Op-Ed 12/18/09
There was what President Obama likes to call a teachable moment last week, when the International Olympic Committee rejected Chicago’s bid to be host of the 2016 Summer Games.
“Cheers erupted” at the headquarters of the conservative Weekly Standard, according to a blog post by a member of the magazine’s staff, with the headline “Obama loses! Obama loses!” Rush Limbaugh declared himself “gleeful.” “World Rejects Obama,” gloated the Drudge Report. And so on.
So what did we learn from this moment? For one thing, we learned that the modern conservative movement, which dominates the modern Republican Party, has the emotional maturity of a bratty 13-year-old.
—Paul Krugman, NY Times columnist, 10/5/09
Stocks are up. Ben Bernanke says that the recession is over. And I sense a growing willingness among movers and shakers to declare “Mission Accomplished” when it comes to fighting the slump. It’s time, I keep hearing, to shift our focus from economic stimulus to the budget deficit.
No, it isn’t. And the complacency now setting in over the state of the economy is both foolish and dangerous.
More from Krugman
for the top .01 %
the real incomes of the top .01 percent of Americans rose sevenfold between 1980 and 2007
Yeah, that’s great! What about for the rest of us?