Paul Krugman Is Now Using The 'D Word'

Never thought I'd write these words, but Krugman is depressing me: (h/t Vicci Rocco)

It’s time to start calling the current situation what it is: a depression. True, it’s not a full replay of the Great Depression, but that’s cold comfort. Unemployment in both America and Europe remains disastrously high. Leaders and institutions are increasingly discredited. And democratic values are under siege.

On that last point, I am not being alarmist. On the political as on the economic front it’s important not to fall into the “not as bad as” trap. High unemployment isn’t O.K. just because it hasn’t hit 1933 levels; ominous political trends shouldn’t be dismissed just because there’s no Hitler in sight.

That's right, Paul Krugman just pulled the Godwin card. But as anyone who has studied periods of great economic strife in history, this isn't a flippant thing. Howie Klein continues:

I've had friends who have been saying we've been in a Depression since the last year of Bush's disastrous term. But they don't have Nobel Prizes in economics. NY Times columnist/Princeton economics professor Paul Krugman is a Nobel laureate and he's managed to not call it a depression-- until this week. And not just a depression, but one that is already starting to inspire a fascist reaction, the way the Great Depression of the 1930s did in much of the world. He points out that the euro crisis "is killing the European dream. The shared currency, which was supposed to bind nations together, has instead created an atmosphere of bitter acrimony." Spain just elected a far right government. Italy and Greece had far right governments imposed on them by banksters backed by Germany.

It's a like a rubber band: you can only stretch it so far and if you stretch beyond that, it snaps and breaks. Economically, we appear to be right at that breaking point. You cannot steal the livelihoods and futures from so many people, demanding austerity and sacrifice, while simultaneously protecting those who are living large and refusing to hold anyone accountable for this kind of injustice.

We've seen what this kind of economic disparity did in the 1930s and it sure looks like we're barreling right back over that cliff again. More Krugman:

Nobody familiar with Europe’s history can look at this resurgence of hostility without feeling a shiver. Yet there may be worse things happening.

Right-wing populists are on the rise from Austria, where the Freedom Party (whose leader used to have neo-Nazi connections) runs neck-and-neck in the polls with established parties, to Finland, where the anti-immigrant True Finns party had a strong electoral showing last April. And these are rich countries whose economies have held up fairly well. Matters look even more ominous in the poorer nations of Central and Eastern Europe.

Last month the European Bank for Reconstruction and Development documented a sharp drop in public support for democracy in the “new E.U.” countries, the nations that joined the European Union after the fall of the Berlin Wall. Not surprisingly, the loss of faith in democracy has been greatest in the countries that suffered the deepest economic slumps.

And in at least one nation, Hungary, democratic institutions are being undermined as we speak.

One of Hungary’s major parties, Jobbik, is a nightmare out of the 1930s: it’s anti-Roma (Gypsy), it’s anti-Semitic, and it even had a paramilitary arm. But the immediate threat comes from Fidesz, the governing center-right party.

Fidesz won an overwhelming Parliamentary majority last year, at least partly for economic reasons; Hungary isn’t on the euro, but it suffered severely because of large-scale borrowing in foreign currencies and also, to be frank, thanks to mismanagement and corruption on the part of the then-governing left-liberal parties. Now Fidesz, which rammed through a new Constitution last spring on a party-line vote, seems bent on establishing a permanent hold on power.

The details are complex. Kim Lane Scheppele, who is the director of Princeton’s Law and Public Affairs program — and has been following the Hungarian situation closely — tells me that Fidesz is relying on overlapping measures to suppress opposition. A proposed election law creates gerrymandered districts designed to make it almost impossible for other parties to form a government; judicial independence has been compromised, and the courts packed with party loyalists; state-run media have been converted into party organs, and there’s a crackdown on independent media; and a proposed constitutional addendum would effectively criminalize the leading leftist party.

Taken together, all this amounts to the re-establishment of authoritarian rule, under a paper-thin veneer of democracy, in the heart of Europe. And it’s a sample of what may happen much more widely if this depression continues.

I'd like to think we've learned the lessons of history so that we're not doomed to repeat it, but this doesn't give me a lot of confidence.

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