Thursday, February 05, 2009


From the New York Times, new Krugman:

On the Edge

A not-so-funny thing happened on the way to economic recovery. Over the last two weeks, what should have been a deadly serious debate about how to save an economy in desperate straits turned, instead, into hackneyed political theater, with Republicans spouting all the old clich├ęs about wasteful government spending and the wonders of tax cuts.

It’s as if the dismal economic failure of the last eight years never happened — yet Democrats have, incredibly, been on the defensive. Even if a major stimulus bill does pass the Senate, there’s a real risk that important parts of the original plan, especially aid to state and local governments, will have been emasculated.

Somehow, Washington has lost any sense of what’s at stake — of the reality that we may well be falling into an economic abyss, and that if we do, it will be very hard to get out again.

It’s hard to exaggerate how much economic trouble we’re in.

More here.

Krugman then goes on to summarize exactly how bad things are. Go read the essay right now to understand Washington's utter depravity in the face of grave crisis.

I know I posted on this just yesterday, but I continue to be amazed by the sense of business-as-usual in our nation's capitol. I mean, neoliberalism, as an economic philosophy, now lies in tatters. Tax cuts don't work--if they did, things would be just dandy now because, as far as economic policy goes, that's all we've been getting for years, even before Bush. Deregulation doesn't work: just look at the mortgage and lending crisis for maddening proof, not to mention the ever downward spiral of salmonella and E. coli scares, just to make things more fun. Monetary policy, the shifting of interest rates to warm or cool the economy, no longer has any effect--as Krugman observes in his essay, we're tapped out; interest rates are effectively at zero, and the economy continues to worsen.

Republican ideas just don't work. Okay, after thirty years of Reagan America, they're Democrat ideas, too, but at least some Democrats are willing to try old school Keynesian stuff. Problem is, Democrats have also been conditioned like Pavlovian dogs to sit up and beg whenever Republicans say "tax cuts," so the "debate" about government spending continues, even though current events make such a "debate" an exercise in futility.

That is, Washington is fiddling while Rome burns. I just know they're going to fuck this up good.