Paul Krugman: Economy Was Never 'On The Road To Recovery'

Why there needs to be investigat­ions, hearings and prosecutio­ns should become clear after you watch this.

In that clip, Dylan Ratigan said:

Last week we learned that the recession at the end of Bush's 2nd term was worse than initially measured.  Revised numbers show a shocking 8.9 percent loss of GDP, which provoked this analysis in "The Economist" -

"Had the new Obama administra­tion seen that the economy was shrinking at close to 9 percent per year, it might well have pushed for a much larger stimulus plan, and might reasonably have expected Congress to agree to it.  If government was too thrifty before, it looks downright stingy in the light of new informatio­n.  Against this backdrop, fiscal policy is tight and growing tighter.  Government consumptio­n and investment has dragged growth down in five of the last seven quarters, thanks to the cuts at the state and local level and falling defense spending.  More cuts are coming."

Howard Fineman said:

Over the years, spending cuts have cut back on the ability of the government to collect data and do research about what's actually going on in the economy.  And I dare say there will be more cuts as a result of the deal that they just made.  The fact that we knew so little about what really had been going on in the economy at the time when Barack Obama was making fateful decisions even before he became president is shocking.  And we need real time informatio­n about what's going on in what is still the largest economy in the world. If you cut government­, and if your attitude is you want to cut government­, you blind government to the realities that it needs to understand in order to help lead the country and the world.  

Lawrence O'Donnell then asked Robert Reich, former labor secretary in the Clinton administra­tion and economics professor at UC Berkeley:

As a former labor secretary, you got an early look at all of these government statistics on the economy, the Bureau of Labor Statistics­.  How surprised are you that these revisions that have been done lately have shown that things were so much worse than we thought? 

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