There was a time when a Nobel Prize meant something. Paul Krugman is a Nobel Laureate in the field of economics, but he’s most well-known for his economic propaganda on behalf of leftist ideas. He appeared on Fareed Zakaria’s show to propose the preposterous, meanwhile making an admission that is not only damaging to his long-held Keynesian notion of “pump priming,” but also inadvertently destroys the leftists’ notion of how the U.S. finally clawed its way out of the Great Depression. Krugman has argued that the United States was able to climb out of the pits of depression by the massive stimulus spending of FDR. FDR’s many make-work programs and vote-buying schemes like the CCC and WPA jobs seem suspiciously like the ideas President Obama is now proposing.
Krugman explains that if we were invaded by aliens, the stimulative effect would get us out of the prevailing pathetic economic environment of the moment. Unfortunately, what he’s also saying is that a war would be good for the US economy, and once again, he misses the mark entirely. What lifted the US out of the Great Depression was when we began to supply England and Russia, among others, with the materials of war in 1939 under the Lend-Lease Act. We would not actually enter the war ourselves until more than two years later, and so in effect, the US was growing its economy on the basis of war-time production without yet being in a war. This is what got the US out of the Great Depression, but the problem is that we needn’t have a World War erupting in order to bring us back from this brink.
All of this admits of something leftist stooges in the economic propagandists’ press like Mr. Krugman have long denied: The big government programs of Franklin D. Roosevelt did approximately nothing to recover the U.S. from the Great Depression. As late as 1938, Roosevelt was concerned he might even lose Democrat Party control of Congress, because the number of unemployed in the country was then higher than it had been in 1933 when he had been inaugurated. This is because, as I’ve detailed elsewhere, there is no way to create lasting demand with borrowed money. At the time, Treasury Secretary Henry Morgenthau complained bitterly that they had discovered the weakness of Keynesian notions in testifying to the House Ways and Means Committee:
“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong…somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises…I say after eight years of this administration we have just as much unemployment as when we started…And an enormous debt to boot!” (Morgenthau Diary, May 9, 1939, Franklin Roosevelt Presidential Library)
Consider what this demonstrates: In 1939, our government already knew Keynesian “pump-priming” was nonsense, and still, after all the years between, with all the evidence necessary to demonstrate the facts, commencing in early 2009, the Obama Administration decided to start again that practice which history had already condemned as a failure. There was Paul Krugman, Nobel Laureate, urging his recently-minted fellow Nobel Prize winner Barack Obama to carry on where FDR and the New Dealers had stopped. Among all the other things this may lead you to wonder, the value of a Nobel Prize may now rightly be questioned.
In his commentary, Krugman admits borrowing a plot in which scientists fake an impending alien threat to achieve world peace. Let me assure you that you cannot fake prosperity, and of all the lessons of the last century, this idea ought finally to be discarded. Mr. Krugman is another economic propagandist, because what he does not mention is that the reason the US was able to prosper on the sales of war materials prior to entering the war was precisely because we enjoyed a competitive advantage among the producers of war goods at the time. We had vast, untapped resources of workers and raw materials that could quickly be turned into the equipment fighting men around the world needed to go into battle. Unless we happen to have some particular weapon more able to repel aliens, or are able to deliver it to customers more inexpensively and reliably than our competitors, and unless the aliens decide to leave the U.S. alone for a while as they plunder the remainder of the globe, it is not possible to understand how Mr. Krugman’s fanciful suggestion bears any relevance on the reality under which we now suffer.
Perhaps rather than accost Americans with fantastic ideas about how war can rescue us from ourselves, Mr. Krugman can instead try his hand at real economic ideas that have withstood the tests of time, because his own have not, and he knows it. Mr. Krugman was among the number of Lame-Stream Media critics who last year pilloried Sarah Palin for her specific warnings about QE3, and we all know how that came out: As she predicted, food and energy prices have ratcheted up, and Americans are suffering from a rapidly devaluing dollar.
Now the left’s chief economic propagandist, apart from President Obama, is telling us that a World War of some sort would be good for the economy. How many of you now wonder if this portends a grave future? When your leaders consider advice that offers aliens or World Wars as the solution to your economic woes, you have every reason to be concerned. These people are not interested in right or wrong, but only in victory at all costs. I would urge my fellow Americans to observe with a shrewd eye the foreign policy machinations and manipulations of the Obama Administration, looking for any evidence that they would seek to use a foreign policy crisis to their domestic political ends. Given the history of this administration, it’s virtually certain that presented such an opportunity, and given their poor standing with the public at present, there may be no limit as to what they will permit themselves to do.