The guy hits it out of the park tonight, once again. What part of:
"We need another stimulus, now!" don't Democrats understand?
I really wish everyone on this blog would just print out Krugman's column this morning and post it on their wall...or, better yet, on their website (if they have one)...or, at least mail it to their congresscritters.
Meteor Blades provided us with some exceptionally awesome coverage on this very topic, earlier today, in: "Official Unemployment Hits 9.5%."
And, rumor has it that the brilliant and downright sublime historical backgrounder that
gjohnsit posted on Wednesday, "
Unemployed Councils and Eviction Riots," during DKos "rush hour," might be making a quick reincarnation on these pages, real soon, too.
I posted something fairly extensive regarding all of this, earlier today. (I'm not linking to it. But, by all means, check it out!) Then again, I've been ranting about this for quite a few days...weeks...months...years. I could link to a bunch of my diaries calling up just about everything Krugman says here--but I don't say it nearly as well as he does--in triplicate, but I'm not that much of a sadist. (Heh.)
Scores of millions of people are suffering folks...unlike they've suffered in generations.
Here's the link: "Krugman: That '30s Show."
Krugman: That '30s Show
By PAUL KRUGMAN
Online: July 2, 2009 Published In Print: July 3, 2009
O.K., Thursday's jobs report settles it. We're going to need a bigger stimulus. But does the president know that?
Let's do the math.
Since the recession began, the U.S. economy has lost 6 1⁄2 million jobs -- and as that grim employment report confirmed, it's continuing to lose jobs at a rapid pace. Once you take into account the 100,000-plus new jobs that we need each month just to keep up with a growing population, we're about 8 1⁄2 million jobs in the hole.
And the deeper the hole gets, the harder it will be to dig ourselves out. The job figures weren't the only bad news in Thursday's report, which also showed wages stalling and possibly on the verge of outright decline. That's a recipe for a descent into Japanese-style deflation, which is very difficult to reverse. Lost decade, anyone?
Wait -- there's more bad news: the fiscal crisis of the states. Unlike the federal government, states are required to run balanced budgets. And faced with a sharp drop in revenue, most states are preparing savage budget cuts, many of them at the expense of the most vulnerable. Aside from directly creating a great deal of misery, these cuts will depress the economy even further....
Krugman continues on to talk about the details of Obama's stimulus plan. The Nobel prize-winner's succinct, three-word sentence pretty much says it all: "That's not enough."
As we've heard from many in recent months, and as Krugman reiterates it, "We've failed to learn from history."
He then provides us with a link to another piece to which I've linked in some of my recent diaries, comments from Christina Romer, the chairwoman of the Council of Economic Advisors, entitled, "The lessons of 1937."
The lessons of 1937
Jun 18th 2009
From The Economist print edition
In a guest article, Christina Romer says policymakers must learn from the errors that prolonged the Depression
AT A recent congressional hearing I cautiously noted some "glimmers of hope" that the economy could stabilise and perhaps start to rebound later in the year. I was asked if this meant that we should cancel much of the remaining spending in the $787 billion American Recovery and Reinvestment Act. I responded that the expected recovery was both months away and predicated on Recovery Act spending ramping up greatly. Only later did it hit me that I should have told the story of 1937.
The recovery from the Depression is often described as slow because America did not return to full employment until after the outbreak of the second world war. But the truth is the recovery in the four years after Franklin Roosevelt took office in 1933 was incredibly rapid. Annual real GDP growth averaged over 9%. Unemployment fell from 25% to 14%. The second world war aside, the United States has never experienced such sustained, rapid growth.
However, that growth was halted by a second severe downturn in 1937-38, when unemployment surged again to 19% (see chart). The fundamental cause of this second recession was an unfortunate, and largely inadvertent, switch to contractionary fiscal and monetary policy. One source of the growth in 1936 was that Congress had overridden Mr Roosevelt's veto and passed a large bonus for veterans of the first world war. In 1937, this fiscal stimulus disappeared. In addition, social-security taxes were collected for the first time. These factors reduced the deficit by roughly 2.5% of GDP, exerting significant contractionary pressure...
Krugman's final bit of advice to President Obama...
...So here's my message to the president: You need to get both your economic team and your political people working on additional stimulus, now. Because if you don't, you'll soon be facing your own personal 1937.
With regard to all of this I say:Hal-le-freakin'-leu-jah!
(A high-profile piece like this from Krugman is just what the Progressive doctor ordered.)