Paul Krugman fails to realize he’s talking about himself:
And I don’t know about you, but I’ve got a sick feeling in the pit of my stomach — a feeling that America just isn’t rising to the greatest economic challenge in 70 years. The best may not lack all conviction, but they seem alarmingly willing to settle for half-measures. And the worst are, as ever, full of passionate intensity, oblivious to the grotesque failure of their doctrine in practice.
Keynesian fiscal stimulus failed after the 1922-1929 boom. It failed after the 1980-1989 Japanese boom. Monetary stimulus sufficed to prop things up after the 1996-1999 equity boom, but it’s clear that both monetary and Keynesian stimuli are going to fail again following the 2003-2007 housing boom. One would do well to describe it as a grotesque failure, even as adherents of the doctrine roll out their excuses that it wasn’t big enough… again.