The Economic Narrative
I love listening to the Corn Flakes trot out Krugman now that he’s
offering continuing his scathing criticism of the policies put forward by the Obama economic team as too little, and now maybe just to late. Here, Krugman slaps down on supply siders who seize his remarks as proof of Keynesian failure, instead of proof that we did not go far enough.
Why do people like me feel the need to revisit the fateful decision to go for an underpowered stimulus right at the beginning of the Obama administration? It’s not about “I told you so”, or at least not mainly. It’s about the economic narrative, which will matter long after the current players are off the scene.
The way the right wants to tell the story — and, I’m afraid, the way it will play in November — is that the Obama team went all out for Keynesian policies, and they failed. So back to supply-side economics!
The point, of course, is that that is not at all what happened. A straight Keynesian analysis implied the need for a much bigger program, more oriented toward spending, than the administration proposed. And people like me said that at the time — we’re not talking about hindsight.