Saturday, May 18, 2013

David Stockman on Paul Krugman

From Stockman's new book: The Great Deformation: The Corruption of Capitalism in America:
That the New Deal revivalists like Professor Paul Krugman of Princeton University are essentially telling fibs and peddling historical legends is not offensive merely because it distorts the distant past. These legends actually compound the deformations of the present by rationalizing policies that can not succeed and which will only bury the nation deeper in debt. And worse still, they perpetuate the busted monetary system and crony capitalism that arose from the wrong road taken by Richard Nixon.[...] 
That the New Deal had virtually nothing to do with modern Keynesian theories of countercyclical  demand management is crucial to understanding the nations present deformations. Contrary to the claims of unreconstructed Keynesians like Professor Krugman, the giant programs of fiscl stimulus and money printing after the September 2008 crisis had no trial run or validation during the Great Depression. They are based on a false narrative from beginning to end; that is, about why the depression happened and what the New Deal actually did.
In truth, the New Deal was a Chinese menu with little rhyme or reason. It included quasi-fascist schemes to regiment industries and agriculture;public works and regional pork barrel spending to reward the New Deal coalition; price support and control schemes to levitate farm prices; work relief and social programs to relieve the immense destitution and suffering among the unemployed; and endless special interest legislation sought by unions, the housing industry, and other organized lobbies.[...] FDR's opening blow was devastating and long lasting. He outright abolished the basis for sound money at home and personally blocked the revival abroad of stable exchange rates and common international money, that is currencies redeemable in gold.


No comments:

Post a Comment