We said good-bye to an old friend in late May when Fior D’Italia closed. It seemed to be extra poignant that our Luncheon Society conversation with Nobel Laureate Paul Krugman on the current economic troubles also coincided with the final day that the oldest continuously run Italian restaurant west of the Mississippi.
After our luncheon, the staff prepared for their final dinner before the locks were placed on the front door. We hope that they will return under new ownership. If we were going to have a last bash with Fior, the Paul Krugman would be a grand way to bid farewell to a long time San Francisco favorite.
We were pleased that Paul Krugman joined us to discuss his new book End This Recession Now. In the largest Luncheon Society gathering to date, we all managed to huddle together for a great conversational “back and forth” that took the better part of two hours.
As the nation’s most elegant Keynesian economist, what frustrates Paul Krugman most was that during the Collapse of 2008 and its aftermath, the lessons learned from The Great Depressions are equally applicable to the Great Recession but policymakers (especially those on the far right) aimed for an austerity program, even if it does more harm than good.
Krugman makes the case that the United States would find full employment within a 2 year period and fund it with an inflationary rate in the 3-4% range. Runaway inflation is a scary matter for those who went through the 1970’s and now worry that any savings might be wiped away, but to those who worry about their 401K retirement programs, the lack of progress from the global economy upward has more of a financial drag.
Instead of supporting an austerity budgetary plan that fires teachers, firefighters and other civil servants, Krugman argues that policymakers should double-down on investing in people and projects. He felt that Obama’s actions amounted to half-measures when he arrived in office as the wheels were coming off the economy were too little, almost too late. Krugman argues that Obama lost an opportunity to be truly bold on the economic front and that made things far worse. Continue reading