At City Journal, Guy Sorman reviews Krugman’s new book, End This Depression Now! (If that’s a personal cry for help, I hear they’re doing wonderful things these days with Prozac and polo mallets, as another denizen of Manhattan would say) and concludes “The Nobel-winning economist embraces fantasy:”
To be fair, Krugman acknowledges that he has become a “pundit,” an implicit admission that his book is informed by his liberal views as much as by his economic knowledge. End This Depression Now! is essentially a pamphlet pretending to offer scientific answers to the U.S. economic slump. Its argument is easy to summarize: we have the knowledge and tools to revive the economy and provide jobs to millions of unemployed Americans. Consequently, those in positions of power who refuse to put Krugman’s advice into practice, themselves motivated by ideology, are the enemies of the unemployed. They want Americans to suffer for their past sins of excessive borrowing and spending. As if to emphasize that he sees the economic debate as a morality play, Krugman dedicates his book to the unemployed.
“Ending the depression should be incredibly easy,” Krugman asserts. The government must simply spend more, because the American consumer is spending less. Borrowing from Keynes, Krugman argues that the crisis, having been provoked by a decline in private demand, can only be solved by an increase in public demand. This is “a moral imperative” (the book constantly zigzags between ethics and economics). Public spending would be not only efficient, Krugman contends, but ethical.
This inflationary solution, which Krugman calls “a feel-good experience,” has been tried before. It worked, he claims, during World War II, when arms-building programs lifted the U.S. economy out of the Great Depression. Half-jokingly, Krugman says that the threat of an alien invasion should suffice to motivate more government spending. But he knows well—or should—that President Obama has already tried to rekindle growth this way. He admits that the results were not impressive, but only because public spending didn’t go far enough and wasn’t sustained.
Krugman embracing fantasy? I just can’t see it myself:
Whenever Krugman starts babbling in Keynesian again, just yell “Japan!” at him… eventually he will either be cured or jump off a half-finished bridge to nowhere. Either way, he’ll be out of our hair for good.
Interesting that he admits that we’re in a depression. He’s off the reservation. Somebody from Chicago needs to pay him a visit.
He went on TV and showed off mathematically invalid charts two weeks ago, that would get an undergraduate a failing grade.
He’s a moron.
I’d say he’s an academic, but if your numbers don’t add up you fall in the other category.
“This inflationary solution, which Krugman calls “a feel-good experience,” has been tried before. It worked, he claims, during World War II, when arms-building programs lifted the U.S. economy out of the Great Depression. ”
Lost in that whole discussion is the fact that our primary competition (read Europe and Asia) had been completely wiped out by the war and would not challenge us again economically for decades. Funny how PK (and pretty much every other “Keynesian” holding up that example) studiously ignores that part of the picture.
It is utterly unclear, there is no agreement at all, about just what it was that ended the depression at the same time as our war effort began.
One possibility which is utterly anti-Krugman is that FDR, to facilitate the effort, stopped trying to crush all private enterprise and instead engaged it. Not to mention that consumer demand was crushed for the duration, so a strict austerity coincided with huge deficit spending. After the fact can we tell which one was responsible for what? Doubt it, jack. Krugman doesn’t even try, which gives him absolutely zero credibility on the topic.
Krugman fails to note the most obvious example of Keynesian economic policy combined with massive wartime spending levels: North Korea. North Korea has been on a wartime economy for over 50 years. If Krugman’s Nobel-prize-winning economic theory was true North Korea would currently be a global economic dynamo, rather than a massive population of people reduced to eating grass and tree bark.
Kruggles is a lunatic. The fact that the Times continues to showcase him is a sign of the deep death wish of the West. If Kruggles succeeds in bringing the temple down, he’ll be among the most amazed to find himself standing — or crouching — in the ruins.
When I initially commented I appear to have clicked on the -Notify me when new comments are added- checkbox and now whenever a comment is added I get four emails with the same comment. Is there an easy method you are able to remove me from that service? Cheers!
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