Paul Krugman compares the economic expansion that occured between 2001 and 2007 to other post-war booms and comes away with two key points: growth was weaker, but corporate profits were higher.

Corporate profits were so high, in fact, that profit margins hit 50-year highs. This made the stock market look reasonably priced, because earnings were temporarily high. Now, it appears, they're rapidly regressing to the mean, especially in the financial sector. Unfortunately, the stock market remains still expensive.

Krugman attributes the current economic malaise to thre factors: the housing bubble; sky-high commodity prices; and rising healthcare costs. He insists that both Bush and his Republican colleagues of yester-year share the blame for a raft of policies that blocked healthcare reform and conservation efforts:

if Bill Clinton’s attempt to reform health care had succeeded, the U.S. economy would be in much better shape today. But the attempt failed — and let’s remember why. Yes, the Clinton administration botched the politics. But it was Republicans in Congress who blocked reform, as Newt Gingrich pursued a strategy of “coagulation” designed to “clot everyone away” from Mr. Clinton.

As for high food and fuel prices, they’re mainly the result of growing demand from China and other emerging economies. But oil prices wouldn’t be as high as they are, and the United States would have been much less vulnerable to the current price spike, if we had taken steps in the past to limit our oil consumption.