The Federal Reserve Is Going to Wait Until After the Election to Move: Eighteen Months Late and at a Third of the Scale the Economy Calls For

Paul Krugman:

The Unbearable Slowness of Understanding: [Sewell Chan's New York Times] article about how the Fed is gradually coming to realize that low inflation and a liquidity trap might be a problem fills me with despair. I mean, we’ve been there for two years.... Yet we’ve spent most of the last two years worried about the wrong things — inflation, crowding out, invisible bond vigilantes.

Even now, we get things like this:

Many economists remain confident that the United States will avoid the stagnation of Japan, largely because of the greater responsiveness of the American political system and Americans’ greater tolerance for capitalism’s creative destruction. Japanese leaders at first denied the severity of their nation’s problems and then spent heavily on job-creating public works projects that only postponed painful but necessary structural changes, economists say.

There are multiple things wrong with that paragraph — but what on earth would give one reason to consider our political system “responsive”? The truth is that we’re responding worse than Japan did.

And yes, I’m depressed about it.