Krugman Polishes the Statue of FDR and Gloats over his Successes. We need to Spend 50% More than you Think!

The New York Times—aka the Walter Duranty Papers [1]  has an all-embracing and tortuous history of apologizing for Communism, propping up losers like Al Gore[2] or the Princeling of Wails[3], celebrating AIDS along with the perverted practices that spread this horror, practicing the wanton tax whoring for higher taxes for any implausible reasons, praising African and South American dictators and despots in their opinion columns and scrounging for original new ways to reinvent Marxism as a new-fangled and magical solution to achieve a great society. The Times has relentlessly praised any leftist parasite or pervert who will openly parade their dishonor in our now degenerated society.  Today, the Times hauls out their Rooseveltian Memorabilia to reeducate us on the glory of the Democratic Party when they partied during the Great Depression.

Our newest, but least capable igNoble Leechette[4][5], will now bless us with his special insights and demonstrate his arcane ability to dive into the particulars of command government policies and will now polish and decorate the statues and legends of Franklin Del Ano. [6] He has a new deal for us to pay for.

We begin the celebration with questions:

“Suddenly, everything old is New Deal again. Reagan is out; F.D.R. is in. Still, how much guidance does the Roosevelt era really offer for today’s world?”[7]— Franklin Delano Obama? B y Paul Krugman

Our krugmaniacal one now drinks the Kool-Aid and shares his flashbacks of big government glory with funny stories about success and security.

“About the New Deal’s long-run achievements: the institutions F.D.R. built have proved both durable and essential. Indeed, those institutions remain the bedrock of our nation’s economic stability. Imagine how much worse the financial crisis would be if the New Deal hadn’t insured most bank deposits. Imagine how insecure older Americans would feel right now if Republicans had managed to dismantle Social Security.”-- B y Paul Krugman [Emphasis is mine in all quotes.]This link references all quotes in this essay unless otherwise stated.

Or course, this Good Deal from the Sour Deal of Del Ano  has bloated over time, grown into a virulent cancer  and is rotting and now burdens us with somewhere between 43 and 60 trillion dollars in shortfall.[8] This is indeed a success for liberals and big government socialists. They can, however, dwarf this incredible hulk with socialized medicine and they will try.

Think of all the money we can print! We can all be billionaires!

But, wait; there is a patch of slime in the message that foams up from The Old Gray Lady:

“But the new administration should try not to emulate a less successful aspect of the New Deal: its inadequate response to the Great Depression itself.”

The big caveat springs forth:

“Now, there’s a whole intellectual industry, mainly operating out of right-wing think tanks, devoted to propagating the idea that F.D.R. actually made the Depression worse. So it’s important to know that most of what you hear along those lines is based on deliberate misrepresentation of the facts. The New Deal brought real relief to most Americans.”

That is the heavy propaganda thrust. The rest just justifies more tax whoring.

Here is a synopsis of what FDR did: These are the facts:

In just 8 hours congress came up with the Emergency Banking Relief Act of 1933

That was fast!

This new law invested the president with the power to regulate banking transactions and foreign exchange and to reopen solvent banks.

Big  mistake. Now, look at Paulson and Bernanke. What are they doing?

Roosevelt gave his assurances that it was now safer to keep money in a reopened bank than "under a mattress."

Like during the runs at IndyMac and Wachovia? What good will a ‘safe bank’ be if they have bins of your worthless money  kept openly on the sidewalks  with no threat of theft?

This, after he took our money away.

The Glass-Steagall Banking Reform Act provided for the creation of the Federal Deposit Insurance Corpoation (FDIC)

The FDIC insured individual deposits up to $5,000

Roosevelt next ordered all private holdings of gold to be surrendered to the Treasury in exchange for paper currency and then took the nation off the gold standard.

Theft. The government stole wealth in exchange for inflated paper?

The goal was to create inflation, which he believed would relieve debtors' burdens and stimulate new production.

In February 1934, FDR returned the nation to a limited gold standard for purposes of international trade.

And then a dent in the amour of our champion appears and needs to be excused:

“That said, F.D.R. did not, in fact, manage to engineer a full economic recovery during his first two terms. This failure is often cited as evidence against Keynesian economics, which says that increased public spending can get a stalled economy moving. But the definitive study of fiscal policy in the ’30s, by the M.I.T. economist E. Cary Brown, reached a very different conclusion: fiscal stimulus was unsuccessful “not because it does not work, but because it was not tried.”-- Paul Krugman

Did we try astrology or snake oil or surrendering to our enemies? We didn’t signal Mars for help!

Oh, it seems the phony Keynesian economics theories must be defended even thought his measures did nothing to affect the Great Depression. That is nice. We now have some revisionist who thinks no significant fiscal stimuli were used by either Hoover or Del Ano. This implies we need to tax and spend some more!

Here is an attack on that fool Keynes:

Milton Friedman severely criticized Keynes on his foolish notion that inflation was not related to the quantitative measure of the money supply.  This is an insane notion, but it offers governments the gift of certified meddling with some ’theoretical’ backing as an excuse. The proper way to address inflation is to focus on monetary policy [Monetarism] and control the money supply. The reason that leftist ‘economists’ and other soothsayers like Krugman despise Monetarism is because the levers on this part of the economy need not be worked by tax hungry politicos and socialist tax whores to be effective.

Now, we need to study this from Hayek who wrote The Road To Serfdom. [9]

“ Hayek criticized Keynesian economic policies for what he called their fundamentally collectivist approach, arguing that such theories, no matter their presumptively utilitarian intentions, require centralized planning, which Hayek argued leads to totalitarian abuses. Keynes seems to have noted this concern, since, in the foreword to the German version of the 'The General Theory of Employment Interest and Money', he declared that "the theory of aggregated production, which is the point of ['The General Theory of Employment Interest and Money'], nevertheless can be much easier adapted to the conditions of a totalitarian state [eines totalen Staates] than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire."^”[10]

Hats off to the Commies! Keynes is their champion! How often do we hear the Crypto-Kommies praise Keynes and beg for bigger government?? How many leftist and near totalitarian economies are in the tank now or headed that way? Can we find even a hint of criticism of the idiot Keynes from our Famous non-economist and IgNoble Leechette from the New York Times—aka the Walter Duranty Papers? [11]  

So, we need to try something that was never tried!  Keynesianism didn’t go far enough. Spend more! Haven’t we already done that with that phony 150 bln dollar stimulus? Did that work? No? It had not visible effect? Gee, is Keynes wrong again?

Some more revisionism:

“… The New Deal famously placed millions of Americans on the public payroll via the Works Progress Administration and the Civilian Conservation Corps. … Didn’t all these public works amount to a major fiscal stimulus?”-- Paul Krugman

“Well, it wasn’t as major as you might think. The effects of federal public works spending were largely offset by other factors, notably a large tax increase, enacted by Herbert Hoover, whose full effects weren’t felt until his successor took office. Also, expansionary policy at the federal level was undercut by spending cuts and tax increases at the state and local level.”-- Paul Krugman

Isn’t it interesting to hear that tax increases, the only thing the leftists can cling to as they tip toe around Marxism, were not good for the Great Depression? I thought that Obama was going to ‘spread the wealth around’ with higher taxes? Oh, no, he wants to give a tax cut to ‘95%’ of Americans. But, he wants to increase tax on businesses and double the taxes on investment, the ones that provide the jobs and now he threatens to make the US the most inhospitable place to do business outside of Cuba. Where do the jobs come from? Public works projects? We must suppose that some tax cuts are not cuts and that some     wild spending is prudent. That makes sense in the krugmaniacal world.

And more:

“And F.D.R. wasn’t just reluctant to pursue an all-out fiscal expansion — he was eager to return to conservative budget principles. That eagerness almost destroyed his legacy. After winning a smashing election victory in 1936, the Roosevelt administration cut spending and raised taxes, precipitating an economic relapse that drove the unemployment rate back into double digits and led to a major defeat in the 1938 midterm elections.

What saved the economy, and the New Deal, was the enormous public works project known as World War II, which finally provided a fiscal stimulus adequate to the economy’s needs.”-- Paul Krugman

Isn’t it interesting how tax increases are viewed as measures we either should or should not use when fighting a Great Depression like the one we are entering? We can have both ways.  We wonder if Krugman can offer us a scenario where both tax hikes and wild spending will solve this economic puzzle for us. I am confident he can. Let us start the printing presses. Better yet, let us start World War III. How in Mexico or Iran or Africa? It apparently doesn’t matter where it happens as the only important factor is the spending.

Our krugmaniacal one now sums up with this stirring thought:

“The economic lesson is the importance of doing enough. F.D.R. thought he was being prudent by reining in his spending plans; in reality, he was taking big risks with the economy and with his legacy. My advice to the Obama people is to figure out how much help they think the economy needs, then add 50 percent. It’s much better, in a depressed economy, to err on the side of too much stimulus than on the side of too little.”

Gee, this is great! We hear that tax increases work or don’t work and that various stimuli like world wars might work but we have to guess a bit and then add 50% to our guesses.

Let us all take some of Krugman’s advice: let us  all add about 50% more to our tax deductions  for this year 2008 and then send the Treasury about 50% less than our tax returns show  just to be safe.  That exertion seems to balance out the risks using the kinky economics we read at the New York Times. But, let us also seek out a new place to start World War III.  How about California and Oregon?

rycK

Comments: ryckki@gmail.com