The powerful elites on both sides of the Atlantic suffer from group think. And, instead of proving the truth of the old adage, “great minds think alike,” they offer a vivid illustration of the flip side of that coin: fools never differ.
Like Gray and many others, I’ve been reading Krugman’s commentary on our “Lesser Depression” for quite some time. Yet I still wonder about questions that Krugman never, or at best only peripherally, confronts: Why precisely is it that our political culture is not capable of accepting the neo-Keynesian free lunch that he wants on the menu? If we ordered it, what would the impact be globally, with what feedback possibly limiting its effectiveness? What would its actual implementation further require in terms of decision-making – real choices about recipients of all the artificially created “demand,” real winners and losers?
Justly and effectively implementing massive fiscal and monetary expansion of the sort Krugman favors (he uses precisely those words) would be impossible without a level of express social democratic intent and control that is currently beyond the imagination, traditions, and ideals of American and even European political culture. The frequent invocation of the error of 1937 – or, to cite the title of a recent Krugman blog post, 1937! 1937! 1937! – emphasizes this fact: Even our greatest peacetime statist, FDR, sought to return to the other free lunch tradition – laissez-faire – as soon as possible, prematurely in the view of Krugman and other economic historians. In this one respect, regarding the implicit further-leftism in practice of Keynes and one-step-beyond Keynes, the suspicions on the hard right are correct, and the failure to confront those suspicions directly and openly, in order to overcome them, may tell us what we really need to know about why Krugmanism is merely a stance among political intellectuals rather than a live policy option: It’s the political love that, for now, dare not speak its name.
What Krugman and his supporters are calling for is always and inevitably a supremely political and cultural project as much as it is an economic one – assuming that it’s realizable enough to be called a “project” at all. Otherwise, massive stimulus or expansion is and can only be a massive stimulus and expansion of this – this very same whole thing, this state of affairs, this political system and the culture it upholds and, through complex and interlocking habits, assumptions, and real transactions, re-produces. Integral to those habits, assumptions, and real transactions are the ones that allow for and require the very disproportions and inequities that infuriate Krugman and those who have adopted his criticism uncritically. In that sense, and even setting aside the fact that under present circumstances the Krugman option is pure counter-factual fantasy (something Krugman also frequently acknowledges), it suggests a proposal to push really hard for some limited period on the biggest string of all.