I would hope that progressive economists argue that overcoming the
Treasury view does not guarantee that the economy can be free from
downturns or even protracted depressions. Otherwise, progressive
economists are simply subscribing to the hydraulic or mechanical view
of Keynesianism or rather the idea that Keynesianism is a panacea
which illusion Mattick Sr has already subjected to critique. That
there is an easy govt solution to economic crises is doubtless
comforting, perhaps as comforting as believing that US foreign policy
at present is directed against clerical fascism. But truth can be
unpleasant.
I also think a more careful criticism of Krugman's views are in
order. Gore is easy to beat up on. Krugman has not argued--and he
could not be more explicit about this--against deficit financing at
present; he is arguing that the long term wrecking of the state's
fiscal position by Bush's to-be-phased-in regressive tax cuts are
getting in the way of recovery through the pressure exerted on the
long bond. It seems to me that this is what Daschle was trying to
echo.
Rakesh
