The Bad Old Days, Revisited
At home or abroad, the 1970s were truly an awful decade:
- The London Daily Mail flashes back to "When the Big Apple was rotten to the core: Gritty 1970s photos capture New York as a city in decline as crime soared and hundreds of thousands of its inhabitants fled to the suburbs." A horrific era that plenty of leftist New Yorkers would love to see return, as Daniel Henninger memorably wrote a few years ago.
- Meanwhile in England, courtesy of the BBC: "Your 1970s: Strikes and blackouts." And pedophile TV hosts. Also courtesy of the BBC.
Naturally of course, Paul Krugman is quick today to destroy Margaret Thatcher's role in turning England around; which James Pethokoukis of the American Enterprise Institute debunks with a chart and a few questions:
What a strange column on Thatcherism by Paul Krugman.
1) Krugman acknowledges that 1970s Britain was a country with “huge economic problems.”
2) Krugman also acknowledges that there was a “huge turnaround.”
3) But Krugman is hesitant to credit Margaret Thatcher’s economic policies because “the big improvement in British performance doesn’t really show in the data until the mid-1990s. Does she get credit for a reward so long delayed?”
Again, let’s compare UK economic performance to that of France. In 1961, UK real per capita GDP was 104% of France’s. By 1978, UK real per capita GDP had fallen to just 81% of France’s.
Quite a two-decade decline.
Then Thatcher arrives in May 1979 as the UK decides to embrace free-market economics. France stays the statist course.
A commenter at Hot Air has a little fun with Krugman's sophistry:
I’ve learned two things from Krugman.
1) Thatcher had nothing to do with the mid-1990′s economic boost in the UK as she left office in 1990 and a leader can NOT possibly have any effect on an economy 4-5 years after they leave office.
2) Obama is still NOT responsible for the current US economic downturn, BUSH IS responsible… because a leader often has a significant economic impact 4-5+ years after they leave office.
Conclusion: X and NOT X at the same time must be true…
This makes at least the second time that Krugman is forced to admit, grudgingly, that an excess of corporatism, statism, and Keynesianism can grind an economy to a halt -- even if he's awfully fuzzy about what has caused the economy to recover. As James Taranto noted a couple of years ago, Krugman was reduced to championing "The Economic Miracle of the 1940s" as jumpstarting the American economy -- or as you and I like to call it, the horrors of World War II -- after FDR's New Deal failed in the 1930s. Which brings us to another look at the Bad Old Days, this time via a new video from Prager University:
President Franklin Roosevelt's "New Deal," has long been credited with rescuing the nation from the Great Depression of the 1930's. Lee Ohanian, Professor of Economics at UCLA, challenges this conventional wisdom in a provocative examination of FDR's economic policies.
[jwplayer config="pjmedia_eddriscoll" mediaid="61977" width="590" height="360"]
Update: Also from Jim Pethokoukis, this time at Ricochet: "Counterfactual: What Would Have Happened to the UK Economy Without Thatcher?"