Friday, November 4, 2016

What Irving Kristol Really Thought About Supply-Side Economics

Austrian school economists have always been suspicious of supply-side economics.

Below Murray Rothbard discusses the problems with supply-side economics. What  is fascinating in this clip is that Rothbard specifically calls out neocon Irving Kristol and suggests that Kristol knew all along that supply-side theory is a scam.

I point this out because of what Paul Krugman writes today in The New York Times. Krugman provides the proof positive that Rothbard suspicions about Kristol were correct.
We’re supposed to think back nostalgically to the era when serious conservative intellectuals like Irving Kristol tried to understand the world, rather than treating everything as a political exercise in which ideas were just there to help their team win. 
But it was never like that. 
Don’t take my word for it; take the word of Irving Kristol himself, in his book “Neoconservatism: The Autobiography of an Idea.” Kristol explained his embrace of supply-side economics in the 1970s: “I was not certain of its economic merits but quickly saw its political possibilities.” This justified a “cavalier attitude toward the budget deficit and other monetary or financial problems”, because “political effectiveness was the priority, not the accounting deficiencies of government.”

In short, never mind whether it’s right, as long as it’s politically useful.