Paul Krugman Does Not Plead Economic Ignorance

Paul Krugman believes that we know how to fix our economic problems but that we are intent upon making them worse.  We know what to do when there is a run on the banking system but we were not aware of the growth in the shadow banking system.  There was a run on the shadow banking system and we figured out how to fix it with a very large bailout.  Economics 101 tells us what to do in a recession when we are at the zero bound.  We are not doing that in the US.  We know what an optimum currency should look like and Europe does not look like that.  The knowledge that we possess is not being used very well.  Our inability to use what we know has created a lot of unnecessary pain for millions of people.