Paul Krugman calls for a faked alien invasion to get the government to spend even more money it doesn’t have. This is based on the erroneous idea that “World War II ended the depression”, i.e. that the depression was ended by a version of war communism. The US economy was essentially transformed into a command economy during the war – GDP certainly soared, and yet, there was rationing of even the most basic consumer goods, never mind “luxury items” such as cars! In reality it was the fact that Congress repealed large swathes of Roosevelt’s “New Deal” in 1946 that got the economy back on its feet. The erroneous notion that “war is good for the economy” is highly popular with economic illiterates who fail to grasp the principles explained in Bastiat’s famous fable of the broken window . . . .[1]Mr. Tenebrarum is unfair to Prof. Krugman who said said if we discovered a threat from space aliens and engaged in deficit spending and inflationary policies then our current slump would be over post haste. He didn’t call for it but he does think acting as though there were such a threat would be beneficial. Clearly he believes spending on WWII is what got us out of the Depression of the 1930s. Good then. Good now.
Anyway, I didn’t know that about repealing lots of New Deal legislation. I did know that Congress didn’t waste a lot of time after the war reducing sky-high income tax rates. Which Ocasio-Juarez would like to bring back. Such is the economic genius of one so young.
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Notes
[1] Comment by Pater Tenebrarum on "Washington's Latest Match Made In Hell." By M.N. Gordon, ZeroHedge, 1/12/19 (emphasis added).
"our current slump" ??
ReplyDeleteAre you kidding? What slump?
We do have areas where our free trade and open borders policies have decimated local economies, and that does seriously impair the living standards of working class people whose parents could work at industrial jobs. It is also a major contributor to the opioid epidemic.
[Doesn't anyone remember the heroin, pot and cocaine epidemics in the black underclass? Once upon a time it seemed every jazz musician was hooked on heroin. Miles Davis being the prime example.]
But those same polices have greatly enriched the Ruling Class and produced an economy that really hums for them. Some drips and drabs fall down to the Middle Class, too.
So, while averages hide problems, I don't see an overall slump.
Colonel, remember her name this way, "occasional cortex", not "occasional whore". I'll pass over the topic of her political funding here, in the interest of good taste.
ReplyDeleteI am blameless as usual, sykes.1. I believe those are Mr. Krugman's words. However, in truth, I'm not too far from entertaining the same notion. The middle class is being squeezed in a terrible way and strong forces work against the affordability of family formation and preservation. Lots of our factories are STILL in China and was it Ford that just announced its intention to open a new factory in Mexico? Harley-Davidson?
ReplyDeleteTrump wants to open the door to more H1B visa competitors for tech jobs and you can't swing a cat in any university student lounge without striking 3-400 Chinese students. All occupying seats that should have Americans in them.
A giant bubble makes housing a perilous adventure for anyone in most places and student debt is crushing young people on the threshold of their working lives. Such jobs as they get are barista-quality jobs.
Not to mention spending for entitlements, Medicare/Medicaid, war, pensions, and other gimmes is immense and as of the hour uncontrolled and quite distant from any place of control.
Serious inflation is denied but can be seen in food prices, jobless citizens are hidden behind a curtain of statistical sophistry, and pension costs are through the roof and placing intolerable pressure on local tax bases.
Trump has erred in equating stock market levels with overall economic vitality, whereas they indicate the deleterious effects of absurdly low interest rates and the malinvestment that goes along with them. He's done good work and his accomplishments are very real but, if we're not in a bona fide slump, we're a long way from returning to any kind of economic sanity. Any retreat from social justice, envirowacko, or other crazy regulation and expense is greeted with the anguished cry of "neoliberalism," whatever that is.
Mr. Day, I'll file that away. Thanks. I'm liking "Crazy Eyes" more and more though. Everything she says is with those eyes right out of a vampire movie and they punctuate her socialist views perfectly.
ReplyDeleteHer funding can only be endlessly fascinating.