On Wednesday, Paul Krugman swung through town to promote his new book, “End This Depression Now!”
I caught up with him at the Economic Policy Institute to talk about
whether Ben Bernanke could actually end this depression, the prospect
that Mitt Romney could be a closet Keynesian, and what we’ll be worrying
about in 10 years. A lightly edited transcript follows.
Ezra Klein: The book is premised off the idea that the recovery
has been, and will continue to be, slow. That something new needs to be
done. But something you hear inside the administration is that if you
step back, you can explain much of the sluggish recovery by adding
together the crisis in Europe, the weather, the Japanese tsunami,
instability in the Middle East, and a few other shocks. It’s been, in
other words, a kind of bad luck, but it has given credence to this idea
that the recovery is really off-track when it isn’t.
Paul Krugman: This has not been a surprise. It was predictable
and predicted. We have all of the Reinhart/Rogoff stuff on the aftermath
of financial crises. It’s a little bit funny to be invoking a lot of
special explanations for something that should have been expected. And
numerically, I don’t think those work. We only export 2 percent of our
GDP to Europe. We’re operating 7 percent of GDP below capacity. A
trillion dollars a year. That can’t be explained by these factors. The
actual shape of the recovery has been basically what those of us
concerned about the size of the stimulus predicted way back when.
Read the whole story in the Washington Post
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