Soggy Laurels
By Mitch Berg
If there’s one thing that America could do for its own long-term betterment over the next few years (that doesn’t involve big electoral victories for the GOP), it’s sending Paul Krugman to work at McDonalds or in a nursing home, or something else productive.
This past week, he said the US needed another World War II – at least, in terms of Keynesian government intervention in the market – to revive the economy.
Victor Davis Hanson points out that the US economy recovered in spite of the government involvement, largely because the war left us as the last market standing:
As WWII ended and the clean-up began, there was an enormous amount of pent-up global demand for goods. Given the wreckage in Europe, Japan, and Russia and the underdevelopment of India, Asia, and South America, we were about the only ones with the industrial and commercial wherewithal to supply the world rebound — often receiving cheap oil, gas, minerals, and interest in exchange, which supplemented our own vast supplies of comparatively cheap and easily recoverable resources. Nor should we forget the psychological element: Americans, after winning two wars, were enormously confident about their newfound international stature and influence.
At home, four years of consumer deprivation during the war and the weak demography of the 1930s had combined to create huge demand, all while society was increasingly leaving the farm for good and becoming suburbanized. The result was that in the late 1940s and 1950s, the birth rate soared and consumers enthusiastically made first-time purchases of washers, dryers, fridges, cars, etc. Thus, the American economy grew by leaps and bounds.
Any similarities between 1948-1958 and today are purely coincidental:
Today’s situation is not comparable: We are in hock to foreign creditors for trillions and have not been a net creditor since the 1980s. A China, Brazil, South Korea, Taiwan, or India is as or more likely to supply recovering demand for food, steel, or electronics.
Massive spending will only revive the economy if it involves destroying the rest of the world economy, in other words.
September 8th, 2010 at 7:40 am
I wouldn’t put it past Obumbler to try that with say, Iran close to an election. In typical liberat fashion, he would need to create the next “crisis” on which to capitalize.
LBJ tried that in Viet Nam, but that didn’t work out so well. Hubie Humpme was shocked that Viet Nam veterans didn’t vote for him, when he and his minions thought they had their votes in the bag. Maybe that’s why dims are so scared of the absentee ballots cast by our military personnel that they do everything possible to derail those votes. As an example, the commie state of VA, ignored some 6,000 absentee ballots during the 2008 election because they were late. IMO, every one in the lefty VA government should be tried for treason for that move.
But then, dims never get it. Just like with their economic policies, they keep making the same aggregious blunders over and over, thinking that the results will be different this time.
September 8th, 2010 at 9:25 am
Massive spending will only revive the economy if it involves destroying the rest of the world economy, in other words.
Isn’t that what DhimmoRats are after? Everyone has to be equally poor?
September 8th, 2010 at 9:46 am
JPA,
Perhaps; there are days I do feel that cynical, and when I do I’m rarely shown wrong.
But the point was that the union system – artificially high wages and unsustainably generous pensions and benefit – was only sustainable while the US had immense pent-up demand, and the rest of the world was rebuilding their industries. Germany and Japan didn’t really start performing til the sixties; Britain still had food rationing in the fifties; in the seventies, India and China were still having famines.
Now all that’s changed; the old business model is unsustainable.
Krugman, economic genius that he is reputed to be, doesn’t get that.
September 8th, 2010 at 11:09 am
Krugman would never make it through his first shift at McDonald’s. He’d be too busy arguing with the manager to ever pay attentiion to his job.
September 8th, 2010 at 11:20 am
Krugman is such a genius at economics that he can draw a trendline from a single data point!
http://krugman.blogs.nytimes.com/2009/09/15/macro-situation-notes/
Krugman has quite a following of academic econ bloggers who make a hobby out of dissecting his flawed reasoning and plain errors of fact.
The man is a fatuous idiot & disgrace to the NYT editorial page. He’s worse than Bob Herbert. At least Herbert makes no claim to being an expert in any subject other than being a Disgruntled Person of Color.
September 8th, 2010 at 1:23 pm
But, then again Terry, the whole NYT staff is a disgrace!