As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth.
One thought kept coming up for me in reading Krugman's discussion of depressions and recessions. And it's pretty sobering. But basically, research in psychiatry has shown that if a person experiences one episode of major depression, they are usually able to pull through without any further relapses. But once someone has a second episode of major depression -- they are much more likely to experience relapses:
After having been depressed once, the average person has at least a 50% chance of becoming depressed again, but after two episodes, the risk of a third episode is 70%. After the third episode, the risk for a fourth is 80%, and after four episodes, the risk of another one is 90%.
--Essentials of Clinical Psychiatry by Robert E. Hales & Stuart C. Yudofsky
I wonder if the same thing is true, collectively, of depressions in national economies? Namely, the U.S. had one major economic depression in the 1930s -- and seemed to pull through just fine. But if we dip into a second one, will the U.S. end up like Mexico or Poland or Zimbabwe with endless economic swings and one economic depression after another?
This analogy from psychiatry suggests that the stakes in the debate over the economic stimulus are extremely high. And the Republican political gamesmanship and lack of seriousness regarding the major recession we are experiencing has the potential to turn the U.S. into a Third World country (which Republicans would probably like because 3rd world countries are usually thuggish patriarchies with no regulations). Furthermore, isn't a Third world country just a nation that got beat up by a first world bully (in the Conquest, Manifest Destiny, Colonialism, or the Middle Passage), then sank into a depression, and then has experienced one relapse after another for the past several hundred years?