Krugman: The Secret of Our Non-Success

[eridani]

http://www.nytimes.com/2012/10/22/opinion/krugman-the-secret-of-our-non-success.html?_r=1&

Does this mean that nothing can be done to avoid a protracted slump after a financial crisis? No, it just means that you have to do more than just cut interest rates. In particular, what the economy really needs after a financial crisis is a temporary increase in government spending, to sustain employment while the private sector repairs its balance sheet. And the Obama administration did some of that, blunting the severity of the financial crisis. Unfortunately, the stimulus was both too small and too short-lived, partly because of administration errors but mainly because of scorched-earth Republican obstruction.

Which brings us to the politics.

Over the past few months advisers to the Romney campaign have mounted a furious assault on the notion that financial-crisis recessions are different. For example, in July former Senator Phil Gramm and Columbia’s R. Glenn Hubbard published an op-ed article claiming that we should be having a recovery comparable to the bounceback from the 1981-2 recession, while a white paper from Romney advisers argues that the only thing preventing a rip-roaring boom is the uncertainty created by President Obama.

Obviously, Republicans like claiming that it’s all Mr. Obama’s fault, and that electing Mr. Romney would magically make everything better. But nobody should believe them.

For one thing, these people have a track record: back in 2008, when serious students of history were already predicting a prolonged slump, Mr. Gramm was dismissing America as a “nation of whiners” experiencing a mere “mental recession.” For another, if Mr. Obama is the problem, why is the United States actually doing better than most other advanced countries?