When Obama was elected in 2008, many progressives looked forward to a replay of the New Deal. The economic situation was, after all, strikingly similar. As in the 1930s, a runaway financial system had led first to excessive private debt, then financial crisis; the slump that followed (and that persists to this day), while not as severe as the Great Depression, bears an obvious family resemblance. So why shouldn’t policy and politics follow a similar script? But while the economy now may bear a strong resemblance to that of the 1930s, the political scene does not.
The great financial crisis of 2008–2009, whose consequences still blight our economy, is sometimes portrayed as a “black swan” or a “100-year flood”—that is, as an extraordinary event that nobody could have predicted. But it was, in fact, just the most recent installment in a recurrent pattern of financial overreach, taxpayer bailout, and subsequent Wall Street ingratitude. And all indications are that the pattern is set to continue.
So, should progressives just give up? History says no—over the past decade American politics have proved astonishingly mutable, with not one but two supposedly permanent majorities quickly collapsing in 2006 and 2010. Things may turn again, as long as progressives fight on. But what would fighting on look like?
We’ve already argued—in the first part of this review—that a rise in government deficits played a key role in preventing the crisis of 2008 from turning into a full replay of the Great Depression. Why not use more deficit spending to push for a full recovery? That’s a question that deserves more serious consideration than it has received so far.
It hasn’t been much of a recovery. Unemployment has hardly fallen in either the United States or Europe and US economic growth is slowing. Given this bleak prospect, shouldn’t we expect a scramble to put forward plans for promoting growth and jobs? Apparently not. There is room for action, both monetary and fiscal. But politicians, government officials, and economists alike have suffered a failure of nerve—a failure for which millions of workers will pay a heavy price.
Following are excerpts from a symposium on the economic crisis presented by The New York Review of Books and PEN World Voices at the Metropolitan Museum of Art on April 30. The participants were former senator Bill Bradley, Niall Ferguson, Paul Krugman, Nouriel Roubini, George Soros, and Robin Wells, with Jeff Madrick as moderator.
The good news is that we know more about the economics of health care than we did when Clinton tried and failed to remake the system. There’s now a large body of evidence on what works and what doesn’t work in health care, and it’s not hard to see how …