Paul Krugman: 'I'm sick of being Cassandra. I'd like to win for once'

The American economist has a plan to escape the financial crisis, and it doesn't involve austerity measures or deregulating the banks. But will policy-makers, including our coalition government, heed his advice?

Decca Aitkenhead
guardian.co.uk, Sunday 3 June 2012 15.00 EDT

By now you will probably have read an awful lot about the financial crisis. Perhaps I've been reading all the wrong stuff, but until now I hadn't managed to find answers to the most puzzling questions. If the crash of 2008 was preceded by an era of unprecedented prosperity, how come most of the people I know weren't earning much?

Deregulation of financial services was supposed to have made us all better off, so why did most of us have to live off credit to keep up? Now that it has all gone wrong, and everyone agrees we're in the worst crisis since the Great Depression, why aren't we following the lessons we learned in the 1930s?