Krugman bleeds the patient
Here’s Krugman trying desperately to salvage Keynesianism from the wreckage:
Why do people like me feel the need to revisit the fateful decision to go for an underpowered stimulus right at the beginning of the Obama administration? It’s not about “I told you so”, or at least not mainly. It’s about the economic narrative, which will matter long after the current players are off the scene.
The way the right wants to tell the story — and, I’m afraid, the way it will play in November — is that the Obama team went all out for Keynesian policies, and they failed. So back to supply-side economics!
The point, of course, is that that is not at all what happened. A straight Keynesian analysis implied the need for a much bigger program, more oriented toward spending, than the administration proposed. And people like me said that at the time — we’re not talking about hindsight.
You can argue that nothing bigger and better was politically feasible; we’ll never know about that. But what we do know is that (1) senior administration officials, even in internal arguments, claimed that half-measures were the right thing to do, based on … well, invented doctrines that certainly weren’t basic Keynesian. And (2), the administration has never said that it had to make do with an underpowered plan; on the contrary, to this day it maintains that what it did was just right. And this just feeds the false narrative.
So I’m trying to keep the record straight here. It may not matter for the immediate political debate, but I think it does matter for the long game.
Even assuming he’s acting in good faith here (and I am straining with all my might to believe that), surely if good medicine is being taken, a little is better than nothing. Yes, more would be great, but a little dose shouldn’t kill the patient.
And what we have is a dead patient.
So Krugman must be arguing that his medicine can kill the patient if given in small doses, but miraculously returns the patient to vigorous health when given in massive doses. That’s a delicate balance, isn’t it? I mean, what kind of medicine kills in small doses, but works wonders in massive doses?
Do not trust a doctor like Krugman.
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