Friday, November 13, 2009
Ahead of the Curve
Krugman is always ahead of the curve. You can get onboard or you can just sit and watch.
Free to Lose
”We could, for example, have New-Deal-style employment programs. Perhaps such a thing is politically impossible now — Glenn Beck would describe anything like the Works Progress Administration as a plan to recruit pro-Obama brownshirts — but we should note, for the record, that at their peak, the W.P.A. and the Civilian Conservation Corps employed millions of Americans, at relatively low cost to the budget. “
Krugman has mentioned this a couple of times now. I’m sure it’s deliberate. The thing to note is that our problems -- the economy, health care, unemployment -- are solvable. Our problems have technical solutions. What we lack is political consensus to implement the solutions. If you aren’t communicating with your Congressmen, you aren’t helping.
If you’re keeping up, you should remember that Krugman basically wanted a stimulus double the size of what was approved. That is because he could see far enough into the future to recognize unemployment would be a problem.
”Just to be clear, I believe that a large enough conventional stimulus would do the trick. But since that doesn’t seem to be in the cards, we need to talk about cheaper alternatives that address the job problem directly. “
He called for a bigger stimulus at the start. He called for a second stimulus after the first passed but was too small. He’s now calling for direct action on the unemployment problem.
I read a first-hand account of the Depression the other day. I should have saved it. In short, the author talked about how people had their heads in the sand. Things really weren’t that bad in 1929 after the stock market crashed. Some had a tough time but not all. Things would get better in the Spring. Then it was things will get better in the Fall after the harvest. Things will be better next year -- in the Spring. Or the next. Or maybe the next.
What was really happening was that every day that passed made things just a little bit worse. A few more lost a job. A few more lost their homes. A few more got sick and couldn’t pay their rent. The Depression didn’t come on with a bang. It was a long, slow spiral into deeper and deeper despair.
History puts the start of the Great Depression in 1929. Look at when unemployment peaked.
The Great Recession started in 2008. It’s only 2009 (1930). Getting the flick ?
We’ve only stopped the free fall of the economy. (That was a major feat but it was only the start.) We haven’t fixed it yet. We have a lot of things to do but it’s hard to think of a more important task than putting people back to work. Otherwise, they’ll just sit at home, depressed and listening to the likes of Glenn Beck. Always remember that the real danger of the economic upheaval is the social upheaval that will follow if we don’t solve it. We don’t want a World War III.
November 13, 2009