Thursday, January 28, 2010

Krugman and Obama's "Conservative" Ideology

Until reading the Great Wisdom of Paul Krugman's blog, I had no idea that Barack Obama really was a Reaganite Conservative, but the Great Nobel Laureate has made this secret discovery and shares it with the common folk:

These days quite a few people are frustrated with President Obama’s failure to challenge conservative ideology. The spending freeze — about which the best thing you can say in its favor is that it’s a transparently cynical PR stunt — has, for many, been the final straw: rhetorically, it’s a complete concession to Reaganism.
According to what I heard on the radio yesterday, the government plans to "freeze" spending in a way that will "save" about $25 billion a year -- this from a multi-trillion-dollar budget. And this is a "complete concession to Reaganism"? (It is not as though Ronald Reagan froze government spending, and under his presidency, the budget grew, and grew.)

To let us know that he always has been on the case, Krugman shares a column he had a couple years ago that "proves" Obama must be a secret admirer of Reagan. (Maybe he has a candle shrine to the Gipper somewhere in a secret room in the White House.)

According to Krugman, the 1980s was a time when the rich got richer and the poor got poorer, a veritable (let's hear it) "decade of greed." However, if one can think back to the time when personal computers were in their infancy and the high-tech sectors began to grow, that was the 1980s. Everything you are using now just to read this article came to the fore during that time.

Furthermore, Krugman claims all over his columns that the only true way to fight a recession is through huge increases in Keynesian spending, and that permitting inflation to fall and not trying to prop up failing sectors is the way to disaster. Well, he might remember that the Reagan administration was the last one to permit the liquidation of malinvested resources, and out of it came not only a strong recovery, but the base for gains in productivity that lasted nearly 20 years.

Look at what has happened in the last year. The government has been printing money and throwing it everywhere, yet unemployment is growing, and we are farther from a real recovery now than we were when Obama took office. Krugman's typical Keynesian response is that the government has not spent enough. Right. The USA now has debt that guarantees either an outright default or repudiation of debt through inflation, and Krugman still is not satisfied and wants even more profligacy.

Ludwig von Mises and the Austrians were on the Keynesian scam from the beginning. Just because the latest Prophet of the Hoax has a Nobel Prize does not mean Keynesianism has stopped being fraudulent. It was and always will be a pathetic excuse for economic analysis.

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