Krugman: U.S. Headed for 'Jobless' Recovery
"This Week" Spotlight: Nobel-Prize winning economist Paul Krugman.
July 1, 2009 — -- Nobel-Prize winning economist Paul Krugman said the nation is on course for a "prolonged jobless" economic recovery unless the Obama administration steps in with a second round of government stimulus money.
"The fact of the matter is that the unemployment rate is much worse than the administration contemplated or that most people expected," Krugman told ABC News. "So the economy is much weaker than we thought it'd be, meaning, in fact, it could use more stimulus."
The Princeton University economist and New York Times columnist has become one of the leading voices of the left critiquing the Obama administration's handling of the economy, the financial industry bailout, health care reform and climate change.
"I'm trying to move the public debate in a better, more sensible direction," Krugman said. "There were not a whole lot of voices at least in the public eye saying what a lot of economists had concluded, which was that the Obama stimulus plan was, if anything, too small."
Krugman has been one of the most vocal opponents of the stimulus package the president signed in February, long arguing the $787 billion price tag was inadequate to lift the country out of recession.
"The last two recessions were both followed by prolonged jobless recoveries when industrial production and GDP rose, but the unemployment rate continued to rise," he said, "We're almost certainly headed for another patch like that this time around which means that we need the economic support more than ever."
"I think its important to see how the economy evolves and how effective the first stimulus is," Obama said at a White House news conference last Tuesday.
Krugman's media megaphone got a boost last October when he won the Nobel Prize in economics for his academic research dating back to 1979 explaining trade patterns among countries.
"In the economics profession, people knew my work and either they already thought it was pretty good or they didn't think it was very good in which case they didn't think I should have gotten the prize," Krugman said.
He added, "It certainly helped in terms of a little extra credibility."
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