Krugman is essentially arguing that the current economic news is in fact a "blip" -- good news that is transitory, largely because of the "inventory bounce." He then argues that the good news will all go away soon. But let's look a little further. What's his proof? Notice how there is no mention of a specific set of numbers from the current economic news which bolsters his argument. He is merely saying "it's happened before." Using Krugman's logic we might as well bet on the Florida Marlins to in the World Series this year. Why? They've won it before.
What Krugman is really saying -- and what he should have outright said -- is we're not out of the woods yet and we need to guard against thinking we are out of the woods. That would have been an entirely appropriate argument to make. This is an argument against "getting comfortable" with the current situation when in fact the economy still has a long way to go.
But in defense of Dr. Krugman (who certainly doesn't need me to defend him), I think that's exactly what Krugman was saying...albeit in a slightly more drawn out way.
I've said it before. Krugman is a typical professor (y'know, aside from the New York Times column, New York Times blog, regular appearances on MSNBC, and...you know, the whole...Nobel Laureate thing) in that he's got a universe of knowledge in his head, and sometimes doesn't react well when people don't understand what the hell he's talking about. (Bondad clearly does). This frustration tends to show up in his writing. He also has a tendency, when really, really mad, to ignore political realities and go into "just get it DONE" mode (which Dr. Krugman is kinda in now).
But the fact of the matter is, he does know what he's talking about. He may not have provided numbers in this particular column Bonddad refers to, but he certainly has in the past, and will again in the future. He's worried about 1937. So am I. So are we all.
Do I think Krugman is being overly pessimistic? Yeah, probably...given his history with the Stimulus. But is he right to point out that the same Stimulus might not have been enough? Hellz yeah.
