Paul Krugman and what's left of The Left

In December, Krugman and five other liberal economic thinkers (Joseph Stiglitz, Robert Reich, Jeffrey Sachs, Alan Blinder, and Larry Mishel) were invited to the Oval Office for a 90-minute off-the-record audience with the president. It was a month after the midterms, and many progressives were worried that even the modified liberalism of the administration’s first two years would dissolve in a new spirit of conciliation with the ascendant right. The economists present understood the meeting, one of them says, as the moment when Obama “talked to the left."   

The economists sat ringing Obama�two Nobelists, a former Labor secretary, and a former vice-chairman of the Fed. Not a Gentile among them, Krugman noticed, but �an amazingly high proportion of beards.� To begin the meeting, Obama asked each of his guests to identify the most pressing economic issue. Five of the economists emphasized the same problem. Unemployment, they said, was so high that the recovery might never get out of first gear. It was not the time for austerity; the president should focus on short-term job creation and turn to the deficit later. But the other economist, Sachs, the director of the Earth Institute at Columbia, held out. Concentrate on the long-term outlook, he told the president.  

For Krugman, the path forward was perfectly clear: The only way to avert a deepening crisis was massive Keynesian stimulus. During the nineties in Japan, he had seen the nightmare alternative. Officials in Tokyo, faced with a very similar scenario, had done too little to stimulate the economy, again and again, and as their nation’s recovery stumbled, they found they were toggling an unplugged joystick. And yet now, after more than two years of economic calamity at home, the liberal solution again wasn’t getting through: Krugman couldn’t even build a consensus among six like-minded economists, let alone convince a Democratic president. �I have no idea what Jeff was talking about,� he says.

Read all of this very interesting article at New York Magazine: