It’s scary when I Disagree with a Nobel Laureate that I Usually Agree with
The actual lessons of 2009-2010, then, are that scare stories about stimulus are wrong, and that stimulus works when it is applied. But it wasn’t applied on a sufficient scale. And we need another round.
But it won’t happen. President Obama is incapable of a sustained fight against the GOP and his own conservatives, and it’s unclear where his heart is on this matter anyway.
Obama is facing exactly what any moderate faces today: the enmity of the hysterically Tea Partyish GOP and the anger of the disaffected liberals at the far left of the Democratic party.
Oh, I wish we could have a multiparty system, where at least there would be a hope of coalition politics instead of a two-party Mexican standoff.
Stowe Boyd (aka UnderpaidGenius) is right—and Krugman is oversimplifying, I think. And in a very scary, very subtle way, this is another example of the Absurd Disconnect. Krugman, and so many others, is/are ignoring the reality of our changing world. Not that I blame them. Over the past 100 years we’ve see not just a dramatic change in the way our economy works, but we’ve seen a dramatic rise in the rate of that change.
And our culture hasn’t been able to keep up.
Most of us are focused on fixing the system we already have—as though it’s not completely and utterly outmoded. People like Krugman aren’t facing the obvious-if-you-look reality that capitalism is broken. You can no longer define things through the basic “supply and demand” concept since the Internet changes so very much about how commerce is done.
Meanwhile, people like myself, Boyd and others, call for brand new ideas. This is what I think is missing from what we’re hearing from everyone in the establishment—even the more outspoken people like Krugman who think the old ways are worth saving.
I’m not sure what the new system should look like, but one thing is clear—our current system is a mess and it’s not getting any better. This isn’t about applying the stimulus—this is about building a new economy from scratch.
After all, how do we “stimulate” an economy that has had its foundation turned to sand?
Outsourcing has transformed our country into a land of consumers, not producers. The only thing we make here are ideas and, thanks to the Internet, those are cheap or free. Thanks to this inability to create value, the value of our dollar is dropping through the floor. The Fed is practically giving money away because we’re all subconsciously reacting to this new world and not wanting to take on any debt.
We’re at this point where the scam that was the old system is falling apart. Finally, the disconnect between what we are told (“Don’t spend beyond your means.”) and what our economy systemically requires (lots and lots of people debt-chained into the system) is getting so wide as to not be reconcilable by the participants (us).
So, now I find myself looking at all of these talking heads telling me that we’re going to recover. Recover what? The system that we’ve just driven into the ground?
Time for a new car.
Maybe a hybrid—or how about one that runs on solar? :)
(And by invoking environmental concepts, I’m suggesting the new economy be based around benefiting all, not just people who want to be rich and those who already are.)