Economy's Tanking Too Fast to Wait for Obama: Krugman

The downtime before inaguration could make things grimmer yet
By Katherine Thompson,  Newser Staff
Posted Nov 21, 2008 10:32 AM CST
The only positive difference between now and 1932, as Paul Krugman sees it, is that FDR was inagurated in March; Barack Obama will take office two months earlier than that.   (AP Photo)
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(Newser) – The state of the economy right now reminds Paul Krugman a lot of the start of the Great Depression, including a lame-duck administration that seems to have no credibility, hence no influence on the markets, the columnist writes in the New York Times. Drastic damage was done to the country in the months of paralysis between the election and the inauguration of Franklin Roosevelt, and Krugman sees the same thing happening now.

In 1932, "the outgoing administration had no credibility, the incoming administration had no authority, and the ideological chasm between the two sides was too great to allow concerted action." Similarly, two months of policy drift now could be devastating to hundreds of thousands of Americans who will lose their homes and their jobs, and worries are mounting that we could face an irreversible, lost-decade-style deflation.