Keynes’s intellect was the sharpest and clearest that I have ever known. When I argued with him, I felt that I took my life in my hands, and I seldom emerged without feeling something of a fool. I was sometimes inclined to feel that so much cleverness must be incompatible with depth, but I do not think this feeling was justifed. —BERTRAND RUSSELL
The fairmont hotel ballroom In chicago was whirring with excitement as Nobel Prize winner Paul Krugman walked to the podium in front of 2,000 people. Speaking to the Chicago
Council on Global Affairs on the frigid last day of January 2013, Krugman assailed the state of the American economy, which was slowly recovering, but which he characterized as still being in a depression. The New York Times columnist and Princeton pro-fessor weighed in on what it would take to restore full employ-ment, a subject that had haunted John Maynard Keynes for most of his career. This evening, though, Krugman was a rock star.
The audience had braved subzero windchill to receive his wisdom. Like many in his profession, he was expounding on how to fx the American economy, which was still reeling from the recession that had followed the 2008 meltdown. As 2013 dawned, U.S. unemployment was still hovering around 8 percent, and Congress was wrestling with making more than $1 trillion in budget cuts and raising the debt ceiling to allow more borrowing. As one of the world’s foremost Keynesians, Krugman gave prescriptions for what ailed the economy.
Using the framework for describing crisis economics that Keynes developed in his General Theory of Employment, Interest and Money, Krugman called the post-2008 period a “lesser depres-sion” because of the severe lack of consumer demand and corpo-rate spending.