Paul Krugman is scaring me

A very surprising picture from the Unofficial Paul Krugman page.

Paul Krugman may be the gloomiest recent Nobel Prize winner. His New York Times pieces on the economic crises have never been very sunny, but his last column is about as scary as it gets. For example, in summarizing his argument that the stimulus package is inadequate (too small) he says:

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.

If you respect Krugman as an economist and commentator - considering his resume, you should - it's hard not to let that get you down. But I'm hoping there's another explanation for his grimness than that the next Great Depression is obvious in the economic models.

In his book The Conscience of a Liberal, Krugman distinguishes "progressive" from "liberal" by saying a progressive is someone actively working to change society to better reflect liberal values. Needless to say, he considers himself a progressive. He would want to, then, move the debate as far as possible to the left. The need for a large stimulus package is actually a great opportunity for progressives. As Rahm Emanuel said: "we should never let a crisis go to waste." Krugman would want to pick as big a number as possible and say anything less is insufficient. So, in the end, his alarmism might be more of an ideological calculation - an honorable one, in my opinion - than actual economics.

The problem is that Krugman also has an interest in maintaining his credibility as an economics commentator, and being needlessly alarmist too often puts that at risk. In fact, it is likely that he really does believe things are that bad. One can only hope he's wrong.