Paul Krugman graces the cover of the latest addition of Newsweek today. The story focuses on Krugman's continuing criticism of the economic Policies of the Obama administration, criticism that has increasingly become loud and strong.
Today Krugman was on ABC, last week on Charlie Rose. His daily blog, and regular op-ed Pieces for the N. Y. Times have blasted the economic policies of the administration.
Krugman's criticism is that men like Geithner and Summers are too connected to Wall Street, and have essentially bought into our market system. These economists, Krugman argues, are trying to resuscitate a dead system, which they believe is still fundamentally sound. The problem here, Krugman is telling us again and again, is that the system is not sound. Our system, since Reagan, is failed and a failure, it is time to scrap it. In particular, Krugman has argued that the stimulus was far too small, and that the administration needs to stop dithering and actually nationalize - temporarily - some of the banks.
The Obama Administration at first ignored Paul Krugman. Perhaps they hoped he would be dismissed as an unreasonable radical. But Krugman's criticisms have only grown more powerful and the administration has begun to respond. The response, sadly, only confirms that Krugman is right about Summers and Geithner. Last week Summers declared that he could not even understand Krugman's position nor his arguments. Which seems to indicate that Summers cannot think outside of the broken model that got us where we are now. To make matters worse, Geithner said today on Meet The Press that we cannot even think of changing the system.
So there it is. Geithner and Summers are advocates of the financial system that got us into this mess, and their main goal is to restore it to what it was two or three years ago. If this does not sound too bad, read Krugman's blog, his op-ed pieces, or his latest books. Krugman is not necessarily right about what needs to be done, but his arguments are frightening compelling. We had better take Paul Krugman seriously.
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