His post continues the "weaponized Keynesianism" theme covered in a blog post earlier, and at one level, I agree with him. When a Republican makes the claim that cutting military spending will hurt the economy because it eliminates military-connected jobs, but yet claims that a "stimulus" either will have no effect or will be harmful, then he or she needs to be called out on that contradiction, and Krugman has every right to do it.
One of the reasons I cannot support most of the Tea Party candidates is that they support both the police state at home and military empire abroad, and both are destructive. (I'd say that they were destructive to a "free society," but our society long ago stopped being free, thanks to a tag-team effort by the Right and the Progressives.) Military spending that supports invasions abroad is destructive because it does not protect the people of this country, instead making them more vulnerable to revenge attacks from disaffected peoples abroad.
For that matter, I would much rather see a United States as a country where entrepreneurs are free to pursue ideas rather than the country it has become: a nation of people getting rich by being politically-connected with a gargantuan government that is increasingly protecting itself by means of utter brutality against innocent people who are deemed as "threats" to the existing order. If one wishes to invoke the term "sustainability," this is the perfect situation.
Unfortunately, Krugman takes another road and at the same time exposes his partisan viewpoints that masquerade as "economic" analysis. He writes:
...there are also darker motives behind weaponized Keynesianism.I'm not sure that Krugman really needs to play the role of the Official Psychoanalyst of the Right, but from what I can see, the Right is being consistent in that people from that political perspective believe that government should "protect" us from assaults from abroad, and in their view, military spending performs that duty. Many of us on the libertarian front argue, however, that the current direction of military spending does NOT fall into that "protect us" category, even if the original premise -- that government should protect us -- is correct.
For one thing, to admit that public spending on useful projects can create jobs is to admit that such spending can in fact do good, that sometimes government is the solution, not the problem. Fear that voters might reach the same conclusion is, I’d argue, the main reason the right has always seen Keynesian economics as a leftist doctrine, when it’s actually nothing of the sort. However, spending on useless or, even better, destructive projects doesn’t present conservatives with the same problem.
Unfortunately, he then veers into a non sequitur that cries out for a response:
Beyond that, there’s a point made long ago by the Polish economist Michael Kalecki: to admit that the government can create jobs is to reduce the perceived importance of business confidence.What Krugman is saying here is that it does not matter if government blocks efforts of entrepreneurs and private business firms because, after all, government can easily replace the private economy through massive spending, financed by borrowing and monetary "creation." Thus -- and his logical construct really stretches credulity here -- if someone makes the claim that cutting military spending is bad because it eliminates certain jobs, that is "proof" that massive government regulations and control do not have any kind of negative effect.
Appeals to confidence have always been a key debating point for opponents of taxes and regulation; Wall Street’s whining about President Obama is part of a long tradition in which wealthy businessmen and their flacks argue that any hint of populism on the part of politicians will upset people like them, and that this is bad for the economy. Once you concede that the government can act directly to create jobs, however, that whining loses much of its persuasive power — so Keynesian economics must be rejected, except in those cases where it’s being used to defend lucrative contracts.
Furthermore, throughout the article, he seems to be saying that government spending on military items prevents government spending elsewhere, an Opportunity Cost situation. Yet, Krugman has been arguing that government spending can be limitless (or close to it) in a "liquidity trap," so it would seem to me that if Krugman wanted to be consistent, he would say that we can have it all, both Military Keynesianism and Civilian Keynesianism.
So, we see The Great One invoking Opportunity Cost on one side of the ledger, but not on the other. This is pretty typical of his "analysis," which is unfortunate, given that some people think that Krugman is writing about economics, which is not the case. He is a political operative, period.