Deje Vu All Over Again

A blog entry today by Paul Krugman reminds us of bigger picture that should be far more obvious to policy makers and pundits than it is.

In the face of declining employment numbers and wobbly markets in the U.S. and impending doom in the Euro zone, the increasingly dominant policy prescription is retrenchment. Neo-hooverism is alive and well, and inexplicably, we seem determined to repeat the mistakes of 1937 and push the world economy off the cliff again.

This zombie recession that just won't die seems to be gathering life once again. Andrew Mellon, Hoover's treasury secretary, lives! And a seemingly progressive president, like Roosevelt then, seems determined to place political expediency and fear of an intransigent right ahead of economic common sense.