Everybody in America should be quite concerned about Paul Krugman’s most recent Op – Ed piece in the New York Times. Mr. Krugman is a staunch and loyal supporter of Barack Obama. However, Krugman is now saying that the current recovery may very well collapse leaving the economy in what he is calling The Third Depression. His recent Op-Ed piece can be found here.
In order to understand the magnitude of Krugman’s recent column it’s important to understand a bit about Mr. Krugman himself. Krugman is a Yale and MIT educated economist who won the Nobel Prize in Economics in 2008. His academic credentials are beyond repute.
However, in addition to being a pre-eminent economist Krugman is also a liberal’s liberal. Like his credentials in economics his credentials in liberalism are also beyond repute. Mr. Krugman writes a twice weekly Op – Ed piece in the New York Times. He is a long time and bitter critic of George W. Bush to the point that he often seems to exhibit Bush Derangement Syndrome (BDS). Finally, he has written what I can only imagine to be the world’s shortest book – The Conscience of a Liberal. If you look up “liberal” in the dictionary you find Nancy Pelosi’s picture next to the definition. However, if you look up “coherent liberal” it will be Krugman’s hirsute likeness next to the definition.
For the last 18 months Mr. Krugman has been heaping praise on Barack Obama in general and Mr. Obama’s economic policies in particular. Which is why Krugman’s recent Op – Ed piece is so shocking. At first, he seems to be admitting that the New Keynesian economics theory which he and President Obama espouse has failed. However, a closer reading of the Op – Ed piece reveals that Mr. Krugman actually thinks that New Keynesian economics is just what the world needs. Unfortunately, the world is just too dumb to realize the economic healing power of the monetary printing press. Mr. Krugman finds special fault with the recent European belief that endless spending and deficits may actually be harmful. It seems that Krugman and Obama have accomplished the seemingly impossible – they have “out liberaled” Europe.
Despite all this apparently bad news I see three rays of light in an otherwise jet black sky. First, Bacon’s new book ought to be a best seller if we are really headed for a Third Depression. Hopefully, Mr. Bacon will remember all of us “little people” when we send him e-mails asking, “Hey buddy, can you spare a dime?”. Second, even uber-liberal Paul Krugman has stopped blaming Bush and moved on to the somewhat improbable thesis that it is the Europeans who are the new villains. Finally, Ed Risse’s long running predictions of doom and gloom may be coming true. Perhaps his prescription for reducing the inevitable pain will gain a wider audience.