Paul Krugman on the Federal Reserve

Paul Krugman tells Jeffery Brown the Federal Reserve and the Obama administration is not doing enough to help the economy. Krugman explains that policymakers have become complacent.

We need to do something to make this economy stronger, not five years from now, not 10 years from now, but now. We need to prop this up. Yes, it's true that the aftermath of financial crises is usually a long period of poor economic performance. But that's not something to just accept.

We're supposed to do something different. When Japan had a somewhat similar situation in the 1990s, after its bubble burst, American economists, American officials were caustic about the unwillingness of the Japanese to take strong action to deal with their problem, the way they were just sitting there. And now we're doing the same thing.

We are turning Japanese in our economic policy. This is not something we should be accepting. This is -- it's very easy for comfortable people, like all of us, right, in this discussion to say, well, you know, these things take time. Not necessarily. And -- and we should be trying to do better, not just sitting and accepting this prolonged period, when -- when productive workers, men and women who want to work, can't find jobs.

Former John McCain campaign economic advisor Douglas Holtz-Eakin pushes the nonsense that the free market will take care of all. Holtz-Eakin was annoying during the campaign and his solution is during nothing about what is being described as a growth recession. The economy is slowly starting to grow but not enough to offset unemplyment. I recently read an economic report explaining how unemployment may increase.

So, take the tax increases off the table. Don't rely on government spending. Let the private sector drive this thing. And it's not imaginary to -- to look at things the administration wants credit for, increased emphasis on clean technologies, increased health I.T. Those aren't stimulus. Those are costly changes in the American economy they're trying to do in the name of stimulus. That's not helpful.

Encouraging the free market to invest in clean energy technology. Holtz-Eakin does not like free market solutions when they are proposed by Democrats.