Economists Paul Krugman and Richard Layard, the latter of the London School of Economics, today posted a “Manifesto for Economic Sense” that lays out a sound framework for reviving the global economy.
“I’ve been arguing for a long time that policy makers have misunderstood the nature of our economic crisis, mistaking symptoms for causes, and responding in ways that make the situation worse,” Krugman wrote today on his blog at The New York Times. The goal of the manifesto is, in the words of the manifesto itself, to “offer the public a more evidence-based analysis of our problems” and change the direction of the economic debate away from austerity and toward using government as a kindle for rebuilding the middle class.
“A key priority now is to reduce unemployment, before it becomes endemic, making recovery and future deficit reduction even more difficult,” the manifesto says.
Many of the signatures on the manifesto are those of economists and policy experts, but you are encouraged to sign the manifesto as well to show your agreement with its basic principles.
In an op-ed in the Financial Times, Krugman and Layard explained the thinking behind the manifesto. “More than four years after the financial crisis began, the world’s major advanced economies remain deeply depressed, in a scene all too reminiscent of the 1930s,” the piece begins, because their economic leaders, and conservatives in the United States, insist on replicating the failed economic strategies of the 1930s before the New Deal.
Instead, the manifesto calls for economic experts and policy makers to speak up more loudly against the arguments that “austerity will increase confidence and encourage recovery”—there is no evidence that austerity policies are having that effect anywhere in the world—and that a key causes of our weak economic recovery are structural, rather than a general lack of spending and demand.
The statement echoes the same themes of our own 2010 “Don’t Kill Jobs” economic manifesto, signed by more than 300 economic experts. That statement urged the president and Congress to “redouble efforts to create jobs and send aid to the states whose budget crises threaten recovery by forcing them to lay off school teachers, public safety workers, and other essential workers. It also makes sense to invest in public service jobs—and in infrastructure projects for transportation, water, and energy conservation that will make our economy more productive for years to come.”
If our political leadership had taken that message to heart in 2010, it would not have been necessary for Krugman and Layard to post their own manifesto with the same message. But Washington conservatives still refuse to admit the failures of their policies and end their wrong-headed obstruction in Congress. It’s exasperating to have to repeat the message over and over, but as the Krugman-Layard manifesto concludes, “The whole world suffers when men and women are silent about what they know is wrong.”