Krugman’s piece in today’s NYT, Build We Won’t, is one of his best, which is saying something:
You often find people talking about our economic difficulties as if they were complicated and mysterious, with no obvious solution. As the economist Dean Baker recently pointed out, nothing could be further from the truth. The basic story of what went wrong is, in fact, almost absurdly simple: We had an immense housing bubble, and, when the bubble burst, it left a huge hole in spending. Everything else is footnotes.
And the appropriate policy response was simple, too: Fill that hole in demand. In particular, the aftermath of the bursting bubble was (and still is) a very good time to invest in infrastructure. In prosperous times, public spending on roads, bridges and so on competes with the private sector for resources. Since 2008, however, our economy has been awash in unemployed workers (especially construction workers) and capital with no place to go (which is why government borrowing costs are at historic lows). Putting those idle resources to work building useful stuff should have been a no-brainer.
But what actually happened was exactly the opposite: an unprecedented plunge in infrastructure spending.
Read the entire piece, then click through to the Dean Baker piece Krugman cites, Robert Samuelson Wants People to Be Unemployed: The Economics of the Economics of the Great Recession, which is equally awesome.
Happy Fourth!
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The third–world–ization of America continues.
This is the deliberate ‘starving of the beast’ and ‘drowning it in the bathtub’.
This is why we have Uber and AirBnB…not because these are amazing new internet-enabled avenues for capitalism, but because we’re steadily destroying the economy of the country for the benefit of the 0.01%, who sure as hell aren’t using Uber…and the rest of us have to scrabble for a living however we can.