Titled "The Instability of Moderation," this post looks at the intellectual, political, and financial instabilities that led us to forget the lessons of the Great Depression and landed us in the Great Recession.
Here's a sample, from his discussion of intellectual instability, that is, the failure to hold micro and macro economics apart:
it was probably inevitable that a substantial part of the economics profession would simply assume away the realities of the business cycle, because they didn’t fit the models. The result was what I’ve called the Dark Age of macroeconomics, in which large numbers of economists literally knew nothing of the hard-won insights of the 30s and 40s – and, of course, went into spasms of rage when their ignorance was pointed out.
Let me be clear on where I stand here. What's important is that these garden variety Keynesian ideas can't even get a hearing in the US today among the Serious People (tm). Sure, Krugman writes for the NYT, but other than him, it's all neolibs all the time, which includes those whom Obama listens to. So if even *Keynes*, self-described savior of capitalism, can't get a hearing, then left critiques of Keynes are so far off the map that we might as well be Martians rather than Marxists!
As for Obama's stimulus, Krugman has consistently argued that the stimulus has been much too small, so that it has basically only matched state expenditure cuts, resulting in a close to zero net effect. His slogan for this is "50 little Hoovers" meaning the 50 governors.