Any way you slice it, Paul Krugman, who prides himself on being a disciple of John Maynard Keynes, is a socialist. His op-ed in the New York Times yesterday makes that clear, if his drooling partiality to President Obama and his failed policies was not already disgustingly apparent. Your Rambunctious, yet Sedated, Rodent is here to tell Mr. Krugman a thing or two.
Krugman compares Obama’s spending with Reagan’s and — surprise of surprises! — Obama comes out the thriftier. Reagan spent lots of money on a big, bad military build-up, so Krugman makes his point all the more saliently while he preaches to his leftist choir. Right, Dr. Nobel, Reagan spent our money on things of lasting value — building things — not trying to make us feel good. In not trying, he succeeded. People were put to work, significant research was done, and Communism was laid to rest, leading to a brighter future for all of us. The financial scandal of the time, the Savings and Loan debacle, was handled in an adult manner, and the Resolution Trust Corporation oversaw the shovel job as a partnership between the public and private sectors, spreading the burden via debt assignment and auctions. It was a helluva lot more effective and painless than TARP I and TARP II, which threw big gobs of money around with little planning and follow-up.
“[Republicans] love, in particular, to contrast President Obama’s record with that of Ronald Reagan, who, by this point in his presidency, was indeed presiding over a strong economic recovery. You might think that the more relevant comparison is with George W. Bush, who, at this stage of his administration was — unlike Mr. Obama — still presiding over a large loss in private sector jobs.”
At this point in the Bush administration, the “dot bomb” bubble had burst, for which Bush could not be blamed, as the big, speculative run-up was 1998-2000. Bush took office in 2001, nine months before the second great economic shock, the 9/11 attacks, which threw already precariously perched markets into turmoil. Meanwhile, back at Obama, it is the business cycle, not fiscal policy that is causing the bounce-back in employment, which, by the way, is slowing. Hewlett-Packard recently announced a five-figure layoff, for example. Krugman must be looking at the famous job growth chart that Obama’s operatives posted on the White House website and Obama uses ad nauseam. The devil, as usual, is in the details.
Krugman apparently uses the other famous Obama chart to “prove” that Obama is a less profligate spender than Reagan. This is the appropriately named Nutting Chart, published in Market Watch a couple of weeks ago. As you are all undoubtedly aware, this chart has been debunked. It threw every major expenditure of Obama’s first year in office into Bush’s column, just because the fiscal year started on Bush’s watch. Also, TARP I, which Bush was going to leave to his successor to implement, was pushed through congress at Obama’s pleading on Bush’s watch. Sure, succeeding years’ increases look puny when compared with a false base. Just sayin’.
Krugman’s rambling continues until he eventually reaches his real point, just before he adds as an afterthought (whoops, I almost forgot what I was trying to prove here because I’ve been prattling on) that in his opinion, Reagan was a Keynesian and his success proved that we should be doing the same now. The real point is:
“As many economists have pointed out, America is currently suffering from a classic case of debt deflation: all across the economy people are trying to pay down debt by slashing spending, but, in so doing, they are causing a depression that makes their debt problems even worse. This is exactly the situation in which government spending should temporarily rise to offset the slump in private spending and give the private sector time to repair its finances. Yet that’s not happening.”
Deleveraging is going to be painful, no matter how and when it is done. The socialist bureaucracy can make it appear less painful by sucking money out of my pocket and sticking it into the pocket of some poor schmuck who didn’t know how to properly manage risk, thus kicking the can down the road to an eventual massive deleveraging of government debt, devaluation, and a monetary crisis, or we can bite the bullet now and admit that actions have consequences. Why are some of us better off than others? Perhaps we worked harder and managed risk better. Those who played the game and lost, well, pick your asses up and start over. Why penalize those of us who are debt free, forcing us to pay off the debts of those who sucked ass at managing money and were too greedy for their own good?
With “Taxmageddon” looming, throwing more money around is like running water into a bathtub with the drain open. At the end of the month, you have to pay the water bill and you didn’t even get clean. Obama’s stratified society will only become more stratified into the ever growing supported class, the screwed middle class (who wind up bearing the brunt of the tax increases that begin in 2013), the affluent middle class (whom Obama calls “rich”), and the true upper crust wealthy (those who Obama courts for support). Add to this mix as burgeoning class consisting of overpaid and unnecessary government workers, and that’s what this Mouse calls Obamanomics. It ain’t going to work!
Sorry, Krugman, Nobel Prize or no, you are wrong.
I am the Mouse Who Ate Xanax, and I approved this message.