The Toronto facedown was actually a tag-team match, Paul seconded by Canadian economist David Rosenberg, while Larry was backed up by Ian Bremmer, a previously unknown to me dude who’s connected with the “Eurasia Group.” Krugman went through his usual rap about the Obama stimulus not being big enough, about which he has been right longer than anyone, and that, absent a new and better stimulus, we’ll be heading into a “lost decade” that could last forever, or at least until we are all dead, which is effectively the same thing.
According to Felix, both Paul and Larry agreed that the economy is broken, and needs to be fixed. But if Larry gave a fix, Felix didn’t write it down. Instead, he gave a shout out to economic inequality—“Imagine if we had thirty Steve Jobs!”—that would be cool even if it increased the share of the nation’s wealth held by the top 1%, or even the top 0.1%. Felix acknowledges that this didn’t go over so well, but ultimately, he gave the palm to Larry: “Summers really is a formidable debater. He met Krugman’s gridlock argument head-on, saying that Barack Obama’s legislative achievements in 2009-10 were greater than those in any two year period since 1965-66, or possibly even 1933-34. And in his concluding remarks, he declared that “things are never as bad as you think they are when things are bad”, adding optimistically — and accurately — that in politics, “the transition from inconceivable to inevitable can be very rapid.”
As we say in the blog world, “huh?” Just because Summers says Obama’s legislative achievements were the equivalent of Johnson’s and Roosevelt’s, that doesn’t mean they were. And even if they are the equivalent, we’ve still got 9%+ unemployment, with no relief in sight. And, as for “the transition from inconceivable to inevitable can be very rapid,” rarely have I seen a statement that strikes me as so inaccurate. Wishing for 30 more Steve Jobs, it seems to me, makes a lot more sense than waiting for the inconceivable to become the inevitable—and I’d point out that when the inevitable comes along, sometimes it’s what you don’t want rather than what you do.
I would say that there’s very wide agreement that there has to be a transfer of assets from creditors to debtors, which is an elegant way of saying that so many people owe so much money that the economy won’t grow (won’t grow nearly fast enough) because people won’t spend enough to make it grow. At least one problem is that while people like Krugman say we need a new stimulus, other “respected” people like David Rosenberg says that the government is carrying too much debt. (Poor Paul, getting stuck with a right-wing Canadian economist!) But, regardless of what Canadians say, the likelihood of getting a new stimulus package is, well, it’s inconceivable, and it won’t be changing to inevitable any time soon, unless we get a Republican president and a Democratic Congress. And how conceivable is that?
