Paul Krugman, "What Obama Wants": What Krugman Doesn't Want

Paul Krugman's columns have grown boring. You know before you begin reading that he will again be demanding that the U.S. spend its way out of the recession, and in that respect, his latest New York Times op-ed, "What Obama Wants" (http://www.nytimes.com/2011/07/08/opinion/08krugman.html?hp), doesn't "disappoint." What does come as a mild surprise is his growing annoyance with Obama:

"It’s getting harder and harder to trust Mr. Obama’s motives in the budget fight, given the way his economic rhetoric has veered to the right. In fact, if all you did was listen to his speeches, you might conclude that he basically shares the G.O.P.’s diagnosis of what ails our economy and what should be done to fix it.

. . . .

Almost all the high-profile economists who joined the Obama administration early on have either left or are leaving.

. . . .

Mr. Obama’s people will no doubt argue that their fellow party members should trust him, that whatever deal emerges was the best he could get. But it’s hard to see why a president who has gone out of his way to echo Republican rhetoric and endorse false conservative views deserves that kind of trust."

It sounds as if Krugman is calling upon Democrats to resist any compromise that Obama might reach with Republicans concerning the deficit ceiling. I doubt, however, with elections looming, that Obama's fellow Democrats will risk bringing the temple down upon themselves. Better to remain chained to the president's dictates than risk the wrath of the electorate come November 2012.

But why does Krugman remain enslaved to his conviction that it is possible to spend yourself out of the recession when you are overdrawn and risking, some would say, default and economic ruin? Obama has already thrown money at the economy, this year’s budget deficit is projected to reach a record $1.5 trillion, and there is no relief in sight. Krugman's model hasn't worked.

I would argue that today's economics, shaped by globalization and the real-time immediacy of the Internet, demand flexibility and a new view of the world that is susceptible to adaptation in accordance with developments. In this regard, Krugman probably agrees. In January 2009 he wrote an open letter to Obama in Rolling Stone entitled "What Obama Must Do" (http://www.cfr.org/united-states/rolling-stone-obama-must-do-letter-new-president/p18781), stating:

"Like FDR three-quarters of a century ago, you're taking charge at a moment when all the old certainties have vanished, all the conventional wisdom been proved wrong. We're not living in a world you or anyone else expected to see."

However, I would say that what worked for Roosevelt, i.e. spending, will not work today, and it is time to cast 1930s dogma aside. Technology bars the advent of a new WPA-type program. Moreover, I am also among those who are foolish enough to believe that you can't spend what you don't have and never will have.