"...which is that we are not now and have never been on the road to recovery." That's what Krugman is saying in his most recent Op/Ed.
Now, he's certainly right that "we are not now and have never been on the road to recovery." That's true. But is it impossible to deny this obvious fact? Of course not. Obama and the Democrats will continue to do it right up until election day in 2012. And large portions of the liberal left will be prodded into plugging fallacious narratives about "green shoots" and "recovery" and the like in order to advertise Obama's "accomplishments" during the campaign.
Readers of Krugman's column will by now have noticed a couple of frustrating trends. First of all, the guy repeats himself quite a lot. Part of that's not his fault. The economy really does suck, Washington really is worsening the crisis by holding tightly to neoliberal orthodoxy, austerity really is awful, etc. He's right that Washington cares about all the wrong things. That's not changing, so neither should critical commentary. I can't blame him for being repetitious in this sense.
But there are other repetitious features of Krugman's work that are less excusable. His perpetual surprise at the "excessive compromise" and "betrayals" of the Democrats (and Obama in particular) lacks rational grounding. Didn't Einstein say something about doing the same thing over and over and expecting different results... The fact is that Krugman, while his solidly liberal critique of existing policy is commendable, has nothing to say about how we can get out of this mess. He doesn't appear to have any views about how social change happens. He doesn't have a critical analysis of the electoral mechanism in our society and how it forecloses the possibility of real change. He doesn't have any perspectives on the role of social movements. Although his work sometimes shows brief glimpses of an analysis of class power, he doesn't follow through on these questions enough to understand why it is that the Democrats are flipping the bird at liberals. For the most part, he just seems perplexed that the Democrats aren't listening to his good ideas.
But the problem isn't that Obama and the Democrats are simply ensnared by "bad ideas". Neither is the problem that they are "cowards" or poor bargaining strategists. The certainly aren't cowardly when it comes to ridiculing and chastising the Left. They certainly weren't timid when it came to saying at onset of the health care "debates" that single-payer was absolutely off the table.
In order to understand the Demcorats' political trajectory as a party, one needs both a historical analysis of role of the Democrats have played at different points in time, as well as an analysis of the role that corporate-backed political parties play in a capitalist system. We get neither from Krugman.
For an excellent historical analysis of the role the Democrats have played, their relation to left-wing social movements, and so on, I highly recommend Robert Brenner's New Left Review article "Structure or Conjuncture?". Lee Sustar's The Democrats: A Critical History is also worth noting. But any critical study of a progressive social movement in relation to the DP will suffice, because the pattern is always the same. The Democrats (or Republicans, as the case may be, historically speaking), pressured by unrest and militancy from below, enact policies meant to quell social unrest and co-opt militant forces into the "official" political realm. The following co-optation typically leads to the terminal decline and passification of the movement in question and, with it, the hopes for deepening the process of reform. It's for this reason that many on the Left refer to the Democratic Party as the "graveyard of social movements".
For an excellent analysis of the role of the state in capitalist society, there are several sources of good, quick information. The basic point is this: regardless of which party is in power, the state is structurally dependent on the capitalist class. What that means is that the state relies upon capitalists to invest, employ people, grow the economy, produce necessary goods, and, importantly, to accumulate profits which can then be taxed to fund the state's activities. When the capitalist class isn't accumulating profits, they don't invest, jobs are lost, tax revenues plummet, and a political and economic crisis ensues. For this reason, state officials are compelled to do what they can to make sure the capitalist class is happy. Making the ruling class happy means creating a "good business climate", or putting in place "pro growth" policies aimed at creating the conditions for the maximal accumulation of profits. Call this the imperative of accumulation. Left to it's own devices, the system tends to encourage state officials to fulfill this function to the detriment of other functions (e.g. looking after the well-being of citizens).
But, as history makes clear, sometimes the imperative of accumulation comes into conflict with what we might call the imperative of legitimation. No society can reproduce itself over time unless it manages to convince a large portion of its citizens that it is legitimate. But when the imperatives of accumulation compel governments to, say, slash social spending and bail out banks, this creates legitimation problems. A contradiction between accumulation and legitimation arises. Governments will attempt to solve this in any number of ways. The main strategies we've seen thus far as "budget cut fatalism" and "deficit fear mongering". Both of these arguments aim to convince citizens, against their better judgment, that the policies meant to re-establish the accumulation process are, in fact, legitimate (in the interests of society as a whole).
Notice that I haven't even mentioned the problems raised by the colonization of state officials by big business. That is a serious problem, and, of course, public financing of elections would be a small step toward reducing the efficacy of some of the more common ways that politicians are bought off. But the problems go deeper than campaign financing and lobbying. There are fundamental problems here that have to do with the ways in which large amounts of social/economic power are concentrated in the hands of a small class that has a monopoly on the control and ownership of the means of production. A truly democratic society wouldn't be one in which democratic bodies were subordinated to a powerful economic class that owns the basic structure of society. Nor would a truly democratic society be one in which citizens are subordinated to the inhuman systemic imperatives of accumulation for accumulation's sake. A genuinely democratic society -that is, a socialist society- would be one in which the basic structure of society was under the democratic control of citizens. It would be one in which the operations of the economic system were subordinated to the needs of human beings, rather than the other way around.