Plain Sense Economics

Paul Krugman writes in The New York Times today :

Suddenly, everything old is New Deal again. Reagan is out; F.D.R. is in. Still, how much guidance does the Roosevelt era really offer for today’s world? The answer is, a lot. But Barack Obama should learn from F.D.R.’s failures as well as from his achievements: the truth is that the New Deal wasn’t as successful in the short run as it was in the long run. And the reason for F.D.R.’s limited short-run success, which almost undid his whole program, was the fact that his economic policies were too cautious.

In our macroeconomics class today we’ll be looking at FDR actions in response to the Great Depression. The president earned wide spread admiration for taking bold action to reverse the effects of the depression, yet the country stumbled in and out of recovery for 6-8 years afterwards. Krugman argues that FDR didn’t spend enough. This is a worthwhile read but not the full story.