End This Depression Now!
(Norton, hardback, list price $24.95; Kindle edition, list price $24.95)
If you’d like to watch some ultra-right conservatives break out in hives, do a St. Vitus Dance or just spontaneously combust, ask them to read End This Depression Now! by Paul Krugman.
Most of them won’t read it, of course. They will cast it aside or maybe even set it on fire. Their hearts and minds are firmly set in ideology and rhetoric concrete. No matter what Krugman says or writes, they will remain firmly convinced he is a spawn of the Devil or, at the very least, some kind of Communist-Socialist-Liberal-Radical Raider of the Lost Tax Cut.
Actually, Paul Krugman is one of America’s smartest economic smart guys, and he has some very good ideas about how to help America pick itself up–and stay standing–after getting knocked down, hard, and robbed of its wallet by the Great Recession and depression that followed.
I am an unabashed fan of Krugman, winner of a well-deserved Nobel Prize in economics. He makes clear and steady good sense in his New York Times columns, and he makes damned good sense throughout his new book.
“In the Great Depression,” he writes, “leaders had an excuse: nobody really understood what was happening or how to fix it. Today’s leaders don’t have that excuse. We have both the knowledge and the tools to end this suffering.”
We do, indeed, as he demonstrates convincingly in his book. But we also have seemingly intractable political polarization at the very time when our leaders should be gathered in the middle, rapidly hammering out compromises, and actually doing something to help the nation, not just their financial backers and parties.
Krugman lays out many solid strategies, most of them built around growth, not European-style fiscal austerity, particularly in a time of lingering high unemployment, stagnant or falling wages, and tepid consumer spending. And he looks toward the November election with at least a token effort to appear independent and bipartisan. He has, in fact, strongly criticized economic mistakes made by both sides.
If Obama wins, Krugman writes, “obviously it makes it easiest to imagine America doing what it takes to restore full employment. In effect, the Obama administration would get an opportunity at a do-over, taking strong steps it failed to take in 2009. Since Obama is unlikely to have a filibuster-proof majority in the Senate, taking these strong steps would require making use of reconciliation, the procedure that Democrats used to pass health care reform and that Bush used to pass both of his tax cuts. So be it. If nervous advisors warn about the political fallout, Obama should remember the hard-learned lesson of his first term: the best economic strategy from a political point of view is the one that delivers tangible progress.”
On the other hand: “A Romney victory would naturally create a very different situation; if Romney adhered to Republican orthodoxy, he would of course reject any action along the lines I’ve advocated.”
But that’s not all. In Krugman’s view: “It’s not clear, however, whether Romney believes any of the things he is currently saying. His two chief economic advisors, Harvard’s N. Gregory Mankiw and Columbia’s Glenn Hubbard, are committed Republicans but also quite Keynesian in their views about macroeconomics. Indeed, early in the crisis, Mankiw argued for a sharp rise in the Fed’s inflation target, a proposal that was and is anathema to most of his party. His proposal caused the predictable uproar, and he went silent on the issue. But we can at least hope Romney’s inner circle holds views that are much more realistic than anything the candidate says in his speeches, and that once in office he would rip off his mask, revealing his true pragmatic/Keynesian nature.”
To which Krugman adds: “I know, I know, hoping that a politician is in fact a complete fraud who doesn’t believe any of the things he claims to believe is no way to run a great nation. And it’s certainly not reason to vote for that politician!”
The upcoming election is still just a distracting sideshow to what America needs now. We need jobs, spending, revenue, investments in education, and re-training for the long-term unemployed. And, yes, we need for a lot of Krugman-style clear-thinking and common sense to miraculously infect the brains of our economic and political leaders.
Get, read, and heed this book.
— Si Dunn