In reading through Paul Krugman's material through the years, I find that time and again he is in denial both about history and the present state of the U.S. Government. You see, in Krugman's world, whatever Progressivist historians (or, more accurately, distorians) claim about history MUST be true. Why? Because they said so.
Herbert Hoover, despite all evidence to the contrary, was a True Believer in laissez-faire. The New Deal was bringing economic recovery to the nation until the Fed raised interest rates in 1937. World War II brought the USA out of the Great Depression. The regulated banking cartel worked wonderfully but was phased out because of the ideology of free markets, the Republican Party, and Ronald Reagan. (This is despite the fact that much of the banking deregulation of which Krugman speaks took place when Democrats had an overwhelming majority in Congress and Jimmy Carter was in the White House.)
The beat, of course, goes on. We had prosperity during the late 1990s because Bill Clinton got Congress to raise the top income tax rate from 33 percent to 39.6 percent, and that the Fed-sponsored stock market bubble never existed or was irrelevant to the boom. Or, that cutting the top tax rate from 39.6 percent to 35 percent is largely responsible for the current deficits. We now get Krugman's latest rewriting of history: there has not been an increase in government spending since Obama took office. And so on.
As for the current state of affairs, Krugman actually seems to believe that the responsible thing is for the U.S. Government to continue to borrow and spend as though there is no tomorrow (for inflation can repudiate the debt, and, as all followers of Krugman know, inflation is your friend). Now, despite Krugman's utter partisanship, I am not taking the Republican side of things, especially given that it was the Republicans from 2003 to 2007 who jacked up spending, escalated U.S. involvement in military conflicts around the world, and encouraged the financial bubble that brought down the house.
However, when Krugman is claiming that Obama somehow is a "moderate conservative Republican," then I wonder what planet he inhabits. This president has run the largest deficits in history, has unleashed the EPA to throw a slew of new regulations in the middle of a depression, who is demanding that colleges and universities conduct what essentially are kangaroo courts in order to increase sexual assault claims so feminists will be satisfied, and Krugman fails to acknowledge any of this?
The Keynesian party is over, even if Krugman cannot recognize that we cannot spend our way out of an economic crisis. Contrary to what he claims in The Return of Depression Economics, printing money does not create a "free lunch." However, if the government continues to follow the Keynesian directives of borrowing and spending, the "free lunch" soon enough will create enough destruction to ensure that there will be no lunch at all.