Friday, August 27, 2010

Paul Krugman says something rational

In a New York Times article this week, Paul Krugman actually said something libertarian economists can completely agree with:
What will Ben Bernanke, the Fed chairman, say in his big speech Friday in Jackson Hole, Wyo.? Will he hint at new steps to boost the economy? Stay tuned.

But we can safely predict what he and other officials will say about where we are right now: that the economy is continuing to recover, albeit more slowly than they would like. Unfortunately, that’s not true: this isn’t a recovery, in any sense that matters. And policy makers should be doing everything they can to change that fact.
Then he goes and says the Fed should buy more debt, the government should spend more money on stimulus, blah blah blah. But at least he ends with the right sentiment, sort of: "It’s time to admit that what we have now isn’t a recovery, and do whatever we can to change that situation."

Of course, the real task is to make real growth possible, not, as Krugman would have it, to play god with the economy.

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