This is a terrible article. It strikes me as too technical to do anything but anger the casual reader (see the article's comment section for examples) and too vague to say anything meaningful to the informed reader.

The only new information presented here is the professor's (extremely late) admission that his strict adherence to a misguided school of theoretical economics that no longer applied in the face of structural changes and non-economic factors ("politics and ideology" as he repeats throughout the article) was wrong. Great - how much did they pay you to put your brand name behind this article in order to lend The World Post, the Huffington Post's new highbrow project, credence?

As for what the author says we should do:

What we need now is 1) debt relief to unwind the overhang and 2) much tighter financial regulation to prevent the growth of new fragilities. And if those prove inconsistent with full recovery, then we need massive government spending on infrastructure and other investments financed by money printing until full employment is reattained.

The second task will be one of political organization. For until politicians, finance ministry technocrats and central bankers feel under pressure to respond to and in fact internalize the diagnoses of Stiglitz, Eichengreen, Wolf and others, our problems will remain, as Stiglitz puts it, "not rooted in economics, but in politics and ideology."

And it is only after those ideological and political blockages have been removed that the tasks of economic policy -- and then of shifting policy to deal with the new problems that arise as consequences of fixing our current economic policies -- can be seriously begun.

1) debt relief to undwind the overhand

First of all, which debt is he referring to? Which overhang?

Bank mortgage debt caused by people taking out stupid loans on stupid housing projects, then walking away from that debt? That was already absolved and nationalized by in 2008.

Federal government debt? So we're going to ask everyone (including our own pension funds) who owns a treasury bond to forget that they have some claim that the US gov promised to repay? Or should we continue with QE and currency wars to try and devalue the dollar so that old debts become relatively less expensive, and long-term interest rates continue to fall?

Student loan debt that cannot be discharged through bankruptcy? This one is actually semi-reasonable, but would create a huge moral hazard for anyone looking to invest in education. We should probably stop creating that debt in the first place.

The debt that the captains of finance and industry owe to the average American for leading their companies and the country in an irresponsible and destructive fashion? Only one trader saw jail time post financial crisis - Kareem Serageldin, a senior trader at Credit Suisse who is serving 30 months. The rest have apparently absolved their debt through billions in fines paid out by the shareholders of the companies they managed. [1]

2) much tighter financial regulation

We established the Financial Stability Board, which adopted Basel III capital requirements, countercyclical capital buffers, surcharges for TBTF banks, stricter liquidity coverage ratios, minor decentralization of TBTF banks, enhancements to the terrible securitization model, etc. [2] What additional regulation is the author calling for, specifically?

Not to mention that financial regulation is causing the banks to be unable to lend out QE money! AKA restricting aggregate supply! So even if we were able to boost aggregate demand, it would be met with banks shrugging and saying - we need to keep more capital due to new regulation so we can't invest in your business or provide you with a loan, sorry.

3) massive government spending on infrastructure and other investments financed by money printing until full employment is reattained

Why would you return to Keynesian ideals when you've just admitted they were wrong?! We've already "printed" all the money we need through QE. We then gave it to the banks, who have subsequently parked it with the Federal Reserve, earning interest on it due to the LACK OF AGGREGATE DEMAND that the author describes in the first paragraph! It would make more sense for the Fed to enact a negative interest rate in order to spur the banks into loaning that money out!

As for spending on infrastructure - what budgets should we cut to get the funds? Social security and healthcare (~50% of budget [3])? Older voters would destroy any candidate who would even suggest such a thing, as they very well should. They contributed what the gov said was their fair share, they expect to be paid back in their old age.

Defense department (17%)? Good luck getting that past war lobbies and a public that's terrified of any mention of terrorism whether real or imagined. Other mandatory (12%)? It's mandatory. Interest (6%)? Can't change without renegging on bond contracts which would be terrifically destructive.

[1] http://www.theatlantic.com/magazine/archive/2015/09/how-wall...

[2] https://www.imf.org/external/pubs/ft/wp/2014/wp1446.pdf

[3] https://en.wikipedia.org/wiki/United_States_federal_budget#/...