Paul Krugman apologizes to Japan for lambasting them during their own economic crisis for their policy decisions. Of course, it’s a fake apology.
“Now, I’m not saying that our economic analysis was wrong. The paper I published in 1998 about Japan’s “liquidity trap,” or the paper Mr. Bernanke published in 2000 urging Japanese policy makers to show “Rooseveltian resolve” in confronting their problems, have aged fairly well. In fact, in some ways they look more relevant than ever now that much of the West has fallen into a prolonged slump very similar to Japan’s experience.
The point, however, is that the West has, in fact, fallen into a slump similar to Japan’s — but worse. And that wasn’t supposed to happen. In the 1990s, we assumed that if the United States or Western Europe found themselves facing anything like Japan’s problems, we would respond much more effectively than the Japanese had. But we didn’t, even though we had Japan’s experience to guide us. On the contrary, Western policies since 2008 have been so inadequate if not actively counterproductive that Japan’s failings seem minor in comparison. And Western workers have experienced a level of suffering that Japan has managed to avoid.”
I think old Paul needs a lesson in the art of apologizing.
That aside, he’s right to say that their analysis wasn’t totally off the mark. Japan’s response their crisis made it worse, not better. That isn’t changed by the fact that our response was even worse to our crisis.
Further, he’s right to point out how insane it is that we didn’t allow the lesson of Japan’s reactions to influence our own. That’s the opposite of wisdom.
Now go lift something heavy,