Free Markets, Free People

Krugman – Speaking of Zombie Ideas

Today Paul Krugman attempts to make the case that “government intervention isn’t always bad”. However, he says such an argument has a tough time establishing itself because the “zombie ideas” of Reaganism just won’t die, i.e.”government intervention is always bad.”

You know, I don’t remember it that way at all. In fact, few will argue that all government intervention is bad, to include Ronald Reagan. Reagan did say that most times not only is government not the solution, but it is the problem. But I’m not sure that translates into what Krugman is claiming.

As we’ve said many times, the primary function of government is to protect the rights of its citizens and it does so by protecting them from force or fraud. That obviously requires some level of government intrusion and intervention. I don’t think Reagan saw it any differently. As I recall, he, unlike Krugman, just didn’t see government as the solution for the vast majority of problems we encountered.

So what Krugman has erected is a strawmen argument. Most see some role for government that they’d deem necessary and legitimate. But not necessarily in all areas. What Reaganism said was that there are areas of our life and economy which are much more efficiently run by the private side. Government should stick to the protection game – something it actually does relatively well – and leave the rest to private enterprise.

That, of course, doesn’t sit well with the “government is always the answer” crowd. It is a battle they’ve been fighting – and losing – for decades. What is really bothering Krugman is he is seeing it happen again at a time when he believes it should finally be clear sailing for the government intervention crowd.

This how Krugman begins his argument today:

The debate over the “public option” in health care has been dismaying in many ways. Perhaps the most depressing aspect for progressives, however, has been the extent to which opponents of greater choice in health care have gained traction — in Congress, if not with the broader public — simply by repeating, over and over again, that the public option would be, horrors, a government program.

You have to appreciate his choice of wording. Krugman has come right out and said that he sees the public option as one that could “evolve” into what he prefers, single-payer. Yet within two sentences, he tries to brand those who are against the public choice trojan horse as “opponents of greater choice in health care”. Nice try, but no cigar, Mr. Krugman.

He then launches into a fairly incoherent attempt at “proving” Reaganism (as he’s defined it) failed.

But in fact, it didn’t fail. People remember the ’80s and the prosperity they brought with some fondness. It’s one of the reasons voters were willing to give an uninspiring Republican VP a shot, before turning him out of town for another smooth talking Democrat who promised “change”. But what should you believe, Krugman’s version or your own lying eyes?

Krugman transparently attempts to erect this strawman of Reaganism, declare it thoroughly discredited, further declare its “zombie” ideas to be worthless and proclaim that since he’s destroyed the zombie, the opposite (don’t try to apply logic here) must be true – i.e. government intervention is good. And if government intervention is good, then it follows it must then be good in all areas, to include health care.

Of course even Krugman’s hero, Barack Obama, in a Freudian moment, mentioned that it wasn’t UPS or FedEx constantly in financial trouble, no siree – it was the good old, government run USPS that couldn’t quite cut the mustard.

Krugman laments:

But some of the blame also must rest with President Obama, who famously praised Reagan during the Democratic primary, and hasn’t used the bully pulpit to confront government-is-bad fundamentalism.

My goodness, you’d think praising Reagan was akin to praising some fascist who made the trains run on time, wouldn’t you? But for those who are deacons in the church of “government intervention is good”, that’s probably a valid comparison. Because everyone knows history is rife with examples of government intervention success stories . That’s why people are constantly trotting them out instead of attempting to discredit arguments about government that were never made.



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58 Responses to Krugman – Speaking of Zombie Ideas

  • You know things are getting desperate when Krugman is rolling out Ronnie as the bogeyman. That kind of thing died out in the 90s.

  • Great…now we’re going to be subjected to the 246th installment of Erb’s Reagan rant. Do you bait him on purpose?

    • Heh … maybe Ott will show up and do us the kindness of a pre-Erb strike.

      • Yet again you dense righties fail to understand that Krugman is absolutely right about Reagan. Krugman became a full convert to the holy writ of post-modernism, and of course one of the axioms is that good things never happen because of Republican actions. It’s a simple logical chain really. First, Republican intentions are always bad, and nothing good can come from bad intentions. So don’t start with all that invisible hand imaginary stuff, you hear me! Markets don’t adjust by themselves, there’s no reason to believe they do, as I’ve argued cogently and in a content-laden fashion many times before.

        Krugman and I understand this, and we understand that the benificent hand of government is almost always the answer to any problem. That’s why I support each and every one of Obama’s grandiose programs. But, as I’ve said before, I worry about too much debt, and I also have claimed to be in favor of less government interference. Of course, that was in my “trying to get along with dense righties by pretending to be libertarian” phase, but still. But I never lied about it! No, sir! Post-modernism means there are multiple truths, and that lets we wise pragmatic post-modernists redefine terms to suit ourselves, so I just whipped myself up a new definition of libertarian.

        I never, ever stooped to praising that odious Reagan though, and the fact that he was the closest thing to being a libertarian president in my lifetime is beside the point, because the whole libertarian thing was just a post-modern exercise in redefining terms, as I said before.

        Reagan was just awful. Reagan caused us to turn into a shallow, consumerist society. He made us stop caring about going into debt. And it was not the free-spending Democratic Congress that did that! Stop saying that! It was all Reagan’s fault. I decree it. So does Krugman. And that’s two decrees from wise leftists with advanced degrees, so you thick righties just need to shut up and get with the program. Reagan is the source of many evils, and you all just need to admit that so that we can go on and have a rich, content-laden discussion about the issues in which I always get the final word on what’s right.

        As I’ve said before, the Bush regime is over (finally!) and your ideas are getting pushed aside. I know you don’t like, but you’ll just have to suck on it, because we wise leftists are running the show, and all your fancy, thuglike tea parties will avail you not. And your precious Sarah Palin is going to see those corruption charges over her remodeled kitchen any day now, you just wait, and I’m not either smearing her with no evidence, so stop saying that!

        I don’t see how you can possibly doubt both me and Krugman. We’ve been so continuously right. He has predicted eleven of the last two recessions under Republicans, and I have told you all how I’m so concerned about our growing debt and why that means we have to spend a whole lot more money right away. And how Obama is going to start cutting spending any day now because he said he would. And I’ve patiently explained to you dense righties how John Kerry is a stainless knight and all the charges about his Vietnam service were debunked because Wikipedia says so, and all fifty of the guys who served with him are right-wing liars, even the Democrats. Plus Jimmy Carter is one of the wisest men on the planet and if only we had kept him instead of that odious Reagan, we’d be wearing cardigan sweaters with the thermostat on 65 in the winter, and we would never have had all that debt in the 1980s, and YOU RIGHT WINGERS WOULDN’T THINK YOU WERE SO SMART JUST BECAUSE 25 YEARS OF GROWTH STARTED UNDER REAGAN!! THAT WAS A COINCIDENCE!!! I DECREE IT!!!!!

      • “An Ott a day keeps the Erb away.”

  • I did find the title highly entertaining – “All the Presidents Zombies”.

    I thought for a moment maybe it was a self reflective article by Krugman, but no chance! Course Krugman’s not ALL the President’s Zombies…

    he’s just one of them.

    • It takes a zombie to think that the government option will ultimately result in “greater choice in health care”.

  • The debate over the “public option” in health care has been dismaying in many ways. Perhaps the most depressing aspect for progressives…

    I hate the term “progressives”, it’s nothing more than putting pink panties on communists, or calling global warming, “climate change”. They’re all the same, just using a different dupe in their attempt to put us under thumb. I mean, who really gives a shit if the commie bastards are depressed?

    • I agree, Brown. I really loathe the term “progressives”. How g*ddamn pretentious is that? “Our viewpoint is the one of progress.” It annoys me as much as when politicians always frame their programs as “reform”. It isn’t a reform (“a change for the better as a result of correcting abuses“), it is just a change. Whether it is “for the better” or not is either unproven, unprovable, incorrect, or a matter of opinion.

      I hate even more, though, the term “liberal”. That is our term, damn it. “Liberal” was hijacked by socialists for their own use, and then the conservatives turned it into a slur. Liberal used to mean the same thing as libertarian in the American usage. At that time, “liberals” in the modern sense were called what they really are: socialists!

      I don’t like the “left”/”right” dichotomy either, because they are misnomers. Something like F.A. Hayek’s triangle (liberal-socialist-conservative) or the Political Compass are far more accurate. It is aggravating when people conflate libertarianism as a “right-wing” ideology, as if that somehow puts it abreast fascism. Libertarianism is at the opposite end of the spectrum of fascism.

      • Liberal denotes a free man. Those who claim the “liberal” moniker today are anything but.

    • “I hate the term “progressives”, it’s nothing more than putting pink panties on communists, or calling global warming, “climate change”.”

      If you look at it in depth and from a historical standpoint, “progressive” is actually *REGRESSIVE*. It’s reactionary in the extreme and has many trapping of tribalism.

      As for the “climate change” perspective, that tribalism can be said to equate to a primitive worshiping of nature.

      So, when you hear of Krugman (or Erb, or Obama and his thugs) think of a prehistoric Witch Doctor addressing the tribe.

      What is a “Reactionary”?
      By Barry Loberfeld, June 12, 2006 (Long article, about 19 pages printed out)

  • Frankly, I think Krugman is still pissed off that, when asked “Are you better off than you were four years ago”, his answer was “Yes, damnit…”

  • Krugman is a hack, a liar, and habitually misrepresents his opponents. After Milton Friedman was dead and couldn’t defend himself, Krugman accused him of holding the same opinion — that government intervention is almost never appropriate, which is a blatant lie. In Capitalism and Freedom, Friedman devoted half a page to listing what a classical liberal considers appropriate functions of government, including some “progressive” functions like supplementing private charity. Krugman is an intellectually dishonest worm. That he received the Nobel Memorial Prize for Economics (as did Friedman, someone diametrically opposed in views), just goes to prove Thomas Carlyle’s point — it truly is the “dismal science”.

  • From time to time, the NYT has tried to actually charge people for its on-line op-ed content. Shockingly, they found VERY few people willing to pay for the deep, fact-laden, philosophical writings of people like Krugman and Mo-Do.

    Wonder why…

    / sarc

    We’ve seen many times the effort to cast conservatism and libertarianism as nothing more than anarchism, as if people who inherently doubt the government’s ability to do anything efficiently and would just like the government to leave them the h*ll alone really want NO government at all. It’s doubly pathetic to see this charge thrown at Reagan; my recollection of his term in office is rife with the usual charges of misuse of government power, not the elimination of it.

  • You know who’s discredited zombie ideas keep popping up every so often, despite being discredited every single time in history they have been tried?


    Funny how Kruggie doesn’t write about that one.

  • I note the pre-emptive Scerbing.

    As for Krugman, my humble economic bootstraps take me back to the “knowledge problem” and the vast, nearly unlimited, buy-sell decisions of the market, each illuminated by an individual human intelligence faced with choices and strengthened by the challenge of his freedom to choose, as opposed to being weakened by having choices made for him, and weakened still by having choices made for him with other people’s money.

    It’s the compulsion that lives off of the freedom, not the other way around, Krugman. The government was designed to be limited because the Framers knew that government does not limit itself, but is used to seek advantage until it is strong enough to seek its own advantage to the disadvantage of the governed.

    We have very good records on this, if you care to check them. See: The Twentieth Century.

    Powers were limited by their specific enumeration. Everything after that has been the grabbing and grasping of politicians and their political courts under the pressure of social movements with gimme in their eyes.

  • Reaganism is failing — Reagan got us out of the last recession by starting massive deficit spending, moving from a current accounts surplus to a deficit, de-industrializing the country, and setting up the current crisis. Reagan bought a false prosperity by debt and deficits, and we are paying the price. To be sure, the Democrats went along with this and share the blame. But, as I teach in my courses on political economy, we are reaping the costs of the bad decisions made in the eighties, which have been going on for thirty years. To deny that is to show a lack of understanding of basic economics. See:

    • Reaganism is failing. It is, it is, it is! Reagan got us out of the last recession by starting massive deficit spending. And it was definitely not his tax cuts, which fueled growth, no sir, so stop saying that! We moved from a current accounts surplus to a deficit, and that was Reagan’s fault, and the Democrats who passed all those spending programs Reagan did not promote were just doing their job in a time of crisis to help the little people by spending government money on them. You see, government spending by Democrats to help little people is wise, benificent government, which I support the way I support Obama’s imaginative programs today, but spending by Republicans on icky defense programs is massive deficit spending which plunges us into trouble. And how defense programs tie into a wasteful consumerist live-beyond-our-means mentality is a complex political-sciency thing which is far beyond the ability of the ex-military basket cases who post around here to understand.

      Reagan de-industrialized the country, and set up the current crisis. Yes, he personally went around closing factories, and you can just forget about that being a result of market forces because as I’ve already told you, markets don’t adjust themselves. They require the guiding hand of wise leftists, which Reagan was the farthest thing from. Reagan bought a false prosperity by debt and deficits, and we are paying the price. It was false, I say! The fact that it lasted twenty-five years and that an entire generation of Americans benefitted is just beside the point, so stop bringing that up! And it was doomed to failure, and the stuff the Democrats did in the nineties to force loans to poor people was most definitely not responsible for the finanacial meltdown, no sir. It was Reagan, I tell you, nasty, nasty Reagan.

      To be sure, the Democrats went along with this and share the blame. But not much, because the holy writ of post-modernism teaches us how much more odious Republicans are. And there were wise Democrats like Carter who were completely ignored, and even booted out of office! How could we have done anything so foolish. If we had just kept Carter’s 12% inflation, 18% home loans, and 12% inflation, well, we certainly would not have gotten that awful consumerist culture that caused us to live beyond our means, would we? Answer me that!

      So, as I teach in my courses on political economy, we are reaping the costs of the bad decisions made in the eighties, which have been going on for thirty years. To deny that is to show a lack of understanding of basic economics, and to ignore how much better things could have been under Carter. See my blog post on this, which doesn’t offer any links to support anything I say, so stop asking for those! I’ve got a certificate on my wall that gives me the right to just decree things and you have to accept them! And since I teach a course on political economy, that automatically makes me an expert on economics, which is why you dense righties just need to shut up and accept that markets don’t adjust themselves. They just don’t, I tell you! Stop laughing!!!

  • “Reaganism is failing — Reagan got us out of the last recession by starting massive deficit spending, ”

    Congress is responsible for deficits.

    As Milton Friedman pointed out, it’s HOW the deficit is handled.

    Erb: Clueless as always.

    • Erb: Clueless as always

      Redundant statement is redundant… 🙂

    • I was in Washington in the 80s, Sharpshooter. The deficits were supported by and pushed by the Reagan White House, which infamously said that deficits were irrelevant. The shift towards deficits and debt were part of the Reagan approach. Congress, including the Democrats, went along with it. But to pretend this didn’t represent Reaganism is ignorance. I was there. I was working for a Republican Senator. I knew people in the Reagan White House. They didn’t care about deficits and debt. So we pushed up the Visa bill while oil prices went down, with both parties complicate in policies that now are marking a crisis that is literally ending America’s era as the major super power. Just watch.

      • “I was in Washington in the 80s”

        Ooooh! We are impressed. Look, hotshot, we all know you were a Congressional gofer for a small portion of the 80s. So what? Once they got to know you, you were gone. No tenure in DC.

      • “Congress, including the Democrats, went along with it”.

        You may have been there for a while, but you certainly do not seem to remember much. The house was solidly Dem. and its leader, O’Neil, pronounced every Reagan budget ‘Dead on arrival’ and proceeded to increase spending. It always amuses me how folks like you seem to think Rep. presidents are all-powerful, doing all these evil things all by themselves.

  • Krugman apologizes for his joke falling flat. it is hard to make a joke when you are a joke !!!!!!!!!!!

  • “Reaganism” was a bet that tax cuts and a stable currency would produce sufficient prosperity to pay for the existing entitlement state for the time being. It succeeded at that for a quarter century, but it was only a way to buy time for productivity, which was always matched by the hunger of the state. In retrospect it wasn’t quite as heroic as it seemed at the time though it was a hearty rowing back against a tide that had prevailed, to that point, for a half century.

    Reagan would have been more useful in 1960 to forestall the conditions that finally brought him to power in 1980.

    Milton Friedman warned that the most dangerous condition was the balanced federal budget, which would be the time when entitlement sugar plums would dance out of the liberal mind into reality. Friedman argued that “politically acceptable deficits” would help barricade against more federally sponsored entitlements. On that basis I would give the Reagan deficits/debt credit for defeating HillaryCare in 1994, giving us another fifteen years of avoiding what had then seemed inevitable for the U.S. That Debt should have been given the Medal of Freedom, at least as one of the final acts of irony of the Republic.

    What Obama has tried to do is call the bluff of the “politically acceptable deficit” tactic and shoot deficits to another level of the economic stratosphere. He is trying to leverage a new economic paradigm off of the explosion in world productivity.

    Erb, naturally, is embracing this monstrosity while sniffing at “Reaganism.” Alice is in Wonderland.

    • Trollin’ trollin’ trollin’
      With his ego swollen
      He keeps right on rollin’
      Raw Erb!

      Reagan is the villian
      That means Erb is willin’
      To blame him for all that has gone wrong…

      Meanwhile Obama’s flailin’
      But Erb can’t see he’s failin’
      As badly as even Kim Il Jong…

      He’s an ass!
      Throw him out!
      Ban him now!
      Let him pout!
      He’s a tool!
      He’s a fool!
      Raw Erb!

      He’s an ass!
      Throw him out!
      Ban him now!
      Let him pout!
      He’s a tool!
      He’s a fool…
      Raw Erb………

      • Yeah, you can’t counter what I write, you can’t give a counter argument. You just call to silence the infidel who dares go against the political opinion supported by the majority. Ban heresy, ban those who do not conform to the party line! Is that libertarianism?

        • Nah, Erbie, I’m just sick of your repetitious BS. It’s always the same stuff, none of it is supported (here’s a hint, jackass – linking back to more your own BS on your blog is not support for your argument). Punctuated on occasion by stupid stuff like your baseless smears of Sarah Palin (hey, where’s that corruption charge on the home renovations you were so sure about?) and how Sadr beat Maliki. You pollute the threads here with the same old unimaginative stuff.

          You were in Washington in 1980s? Big fu(#ing whoop. You couldn’t hack it there, so you left. You were a junior BSer, and you couldn’t even hack that. You still can’t explain why a Democratic Congress is not at least mostly to blame for all the spending. Or why the programs that are the biggest problem (SS, Medicare, Medicaid, etc.) were all liberal Democratic creations.

          No, it’s all REAGAN’s FAULT!!! You mindless drone. I’m sick of your nonsense, your whining about being insulted when you don’t even deserve to comment here as far as I’m concerned.

          And it’s all just so you can feel good about lecturing down to the rest of us. You condescending, smug pr!ck. You are so pathetic you come here to get your jollies, talking about researching us like we are some kind of primitive tribe you enlightened leftists have to study for pathologies. You have no core, no soul, no brains, and no abilities, so just to feel good enough to sleep at night, you come here and lecture us to desperately try and bolster your own self-worth.

          But you never, ever will admit that to yourself. You can’t explain why you come here. You can’t refute what I’ve said about your character and motivations. You can only lash out, play the victim like your leftist friends tell you to, and take childish pleasure in throwing mud and $hi+ into the discussions here as often as you have time.

          • Grocky, you’re funny. Your throwing out insults which show that you’re bothered, upset, but don’t know how to react except by lashing out with silly name calling. Frankly, I think you should pay attention and maybe learn something.

        • Oh, almost forgot to point out your rank hypocrisy in talking about calls to “silence you” when you threatened a guy with banning just for disagreeing with you in another one of your stupid Carter posts. Of course, in your twisted world, “disagreeing with Erb” = “personal attack” so you feel completely justified, don’t you?

          How can you keep coming back here when you’ve been exposed as a fool, a hypocrite, a liar, and an idiot? Everyone here knows what a clown you are. Even the other leftists here think you’re a fool. But, as I posted long ago, research shows incompentent people don’t usually know they are incompetent. You are certainly the poster child for that conclusion.

          • Well, Grocky, I’m almost always polite, have content, and am willing to engage in a friendly manner. I have nothing against people who disagree with me. I don’t even hold it against you that you call so many names, you’re actually paying me a compliment because it shows that the argument gets to you, and you feel compelled to respond in an angry manner. Better would be to actually have a conversation. I’m really a pretty nice guy.

          • Hmm, let’s count the lies in this little “I’m so good and perfect” bit of goo.

            “I’m almost always polite” No. You’re smug and condenscending. Constantly.

            “have content” Only if dishonest pap and leftist talking points count as content.

            “willing to engage in a friendly manner” Your primary rule of engagement is that you get to decide whether something is correct or relevant. You deny any fact or evidence someone else presents with a wave of your hand, and fall back on arguments from authority, strawmen, and a host of other fallacies. This is friendly engagement?

            “you’re actually paying me a compliment because it shows that the argument gets to you” No. It is no compliment that everyone here – everyone, even other leftists – considers you a clown. Only a complete and narcissist could believe that. It’s certainly not the argument that gets to me – you generally don’t make any worth mentioning. It’s the repetition, the smugness, and the fact that you crave attention so much you will pollute any thread to get it.

            “you feel compelled to respond in an angry manner” You’re at least close on this one. It’s not anger. It’s contempt. Though I suspect you are too emotionally barren to know the difference.

            “Better would be to actually have a conversation.” As countless people have noted here, that’s impossible. You simply don’t allow it, unless the person you are supposedly conversing with accepts your right to determine the outcome of the conversation.

            “I’m really a pretty nice guy.” Maybe to your kids. Around here, you are smug, irritating, intellectually dishonest, and a general pain in the ass.

            Now, I’m willing to let the other people who view this site decide which of us is right on each of these points. I bet you’re not.

          • By the way, Grocky, the reason someone was “threatened” with having their comments deleted was not only that they were basically mean spirited, but because they entered a false e-mail address and refused to identify themselves. I have respect for people who will put their name on their opinions and show that they stand behind what they say in the real world. Those who don’t, well, I figure there’s a reason for that. By the way, I agree that most people who are incompetent don’t realize they are incompetent. Luckily, I have a record of real world accomplishments which cause me to be pretty confident that I know what I’m doing. That’s one reason your insults seem so silly — they are meaningless. Come on, let’s actually converse and delve into ideas and think about evidence and argumentation — that’s where the real stuff is, not in the posturing and name calling.

          • “Come on, let’s actually converse and delve into ideas and think about evidence and argumentation”

            Oh, yeah. I just can’t wait to delve into ideas with someone whose repertoire includes baseless smears against Sarah Palin. Who has admitted coming here to troll and push people’s buttons.

            And who has never, ever had such an extended conversation with anyone here because every single time it’s been tried, the other person eventually gave up in disgust.

            Now, all of those people could be just hapless before your superior wisdom. Or maybe, just maybe, their irritation, frustration, and unwillingness to take you seriously springs from the same source as mine.

            Take your pick, Erbie. Dozens of people could be full of it, or you could be full of it. Only a narcissist would look at such a situation and not even admit the possibility that the problem could be within themselves.

            Look, if the problem is with everyone around here, how can most everyone gets on so well with Pogue? He very rarely says anything many of the rest agree with. But there’s debate and joking, and things might get a bit heated but we settle down and come back for the next time. But NO ONE HERE DOES THAT WITH YOU. Even Pogue thinks you’re an ass.

            As for all those real-world accomplishments your precious self-image depends on, I don’t think a vanity book and getting a degree because you piled BS high enough is anything to crow about. It’s about like those people who brag about the special armor they get because of stuff they do in World of Warcraft. Compare that to McQ being an Army Ranger. No comparison, hombre.

        • “Yeah, you can’t counter what I write”.

          More laughs. You have been countered constantly. It is not difficult to counter assertion with a contrary assertion, and every time someone posts actual data, with links, you disappear like a vampire at dawn.

  • Our current problem is the intersection of several things:

    1) The “everyone should have a home loan” idea that primarly the Democrats created, which they pushed in a wide varity of ways, resulting in the 2008 financial crisis.

    2) The entitlement programs put in place by FDR and LBJ: Social Security, Medicare, and medicaid. Huge unstable programs destained to fail at some point.

    On top of that, the current fool in the White House is spending like never before.

    The Reagan recovery was mostly what enabled Clinton to almost balance the budget in the 90s. However, absent reform of the entitlement programs, and with the Democrats pushing crappy morgages, that was overcome.

  • Don, the US got out of the 1980-83 recession (caused in large part by Democratic policies, to be sure) because: a) oil prices dropped, lowering inflation and jolting the economy; b) the US started a massive program of deficit spending, with debt growing from 30% of GDP in 1980 to over 60% by 1990; and c) the US shifted from being a net investor in the world to being a host for foreign investment. This allowed the US to lose industrial capacity in favor of service sector jobs, which paid less, but with cheap foreign goods that didn’t seem to matter.

    “C” created a dangerous illusion — people believed that this investment was a sign of economic health, and thus didn’t pay attention to warnings about the current account deficit. Yet the money created speculative bubbles and the “wealth illusion” that people’s portfolios were akin to having a savings account. This process took 30 years to build, and ended in the collapse of the bubble economy in 2007-08. The real estate bubble was caused by cheap credit and the large investment levels. It was not primarily poor people getting legal home loans, but practices of greed and corruption.

    You do have a point that entitlement programs are unsustainable. But they didn’t cause this crisis. Financial mismanagement of the economy for nearly thirty years — built on the illusions begun by Reagan — did. Oh, you also have a point that Obama’s spending is dangerous. The reality is it took two political parties working together to get us to this point. Obama’s running up the deficit and debt is positively Reaganesque.

  • Actually, no, Scott, it took the economy being saddled with a Ponzi scheme and a universal health care system for seniors to force the option of “living within our means” as everything shrank around us — the economy, the Ponzi scheme, the universal care for seniors — or subscribing debt while people and entreprenuers and established businesses could hang on to enough of their money to restart a captilist boom. Debt bubbles come and go, oil prices rise and fall, but a stagnant socialist economy burdened with entitlements is the highway to shantytowns.

  • “Yeah, you can’t counter what I write, you can’t give a counter argument.”

    Teams of people. Literally, teams, have demonstrated repeatedly, over more than a decade, that virtually everything you write is a sophistic, pointless argument from a third-rate academic viewpoint.

    That’s before getting into your chronic dissembling and your psychological mannerisms, to put both in the mildest possible terms.

  • “You just call to silence the infidel who dares go against the political opinion supported by the majority. Ban heresy, ban those who do not conform to the party line! Is that libertarianism?”

    Erb, when you routinely write things like “the myth of the self-correcting market” you pretty much immediately forfeit all credibility with a libertarian audience.

    Every administration has been guilty of rampant spending increases, which have continually grown (in real terms) for the entire post-war era. Taking any statistics on debt and spending in a vacuum is only telling part of the story. Of course, the Reagan administration was guilty of deficit spending — it did it as part of an intentional strategy. The national debt exploded under Reagan because of deficit spending to recover from the recession and defense increases to counter the Soviets. The national debt dropped precipitously under Truman because it started at 120% of GDP early in his administration after World War II and a post-war boom in prosperity. The Clinton era surplus was more dumb luck than anything else due to unforeseen tax revenues from a better-than-projected economy. If the Clinton administration had a correctly calculated income projection, there is no way there would have been any surpluses. Nor should we ignore that Reagan had a Democrat-controlled Congress for about half his term and Clinton had a Republican-controlled Congress for almost his entire term.

    Let’s not pretend this is a Republican-Democrat issue; it is an issue of government power and lack of accountability. Bottom line is that both parties are guilty as hell, and the American people heretofore have had no feasible alternatives between rapacious Republican spending or rapacious Democrat spending.

    Erb, I don’t doubt you truly believe that debt/deficit-spending is a grave problem. I also don’t doubt you truly believe in the merit of the socialist programs for which you beat the drum. Nor do you see how utterly contradictory those two stances are. Social security and the Department of Health and Human Services (i.e. Medicaid/Medicare) budgets are each about equal to the Defense Department’s and far more than the interest paid on the debt.

    • J — we’ve had high debt before due to national emergency and war. Every time we paid it back. In the last 30 years we’ve expanded debt — and worse, current accounts deficits — in peace time and now cannot handle the crisis we’re facing.

      I do not believe in ideologies — I think any theory about the world is such a vast simplification of reality that they always lead to errors, and false beliefs that a “right” system is possible to think up. Whether socialist, capitalist, or whatever, the “ism” folk are always disappointed and become dogmatic. I’m a pragmatist. I don’t know how to solve these problems. I agree there are real difficulties with more spending and new government programs. But I don’t believe in the ideology of the free market either. Maybe if people compromised and looked for pragmatic answers to smaller problems, we could start to deal with a crisis that could be undercutting our very way of life.

      • “I do not believe in ideologies … I’m a pragmatist.”

        Yeah, tell us all about your pragmatic and moderate approach to the use of military force.

        Liar. You’re a leftist pacifist, and too cowardly to admit it.

        • There are libertarian pacifists, Christian pacifists and conservative pacifists. I tend to distrust military force out of pragmatic grounds (though there are times, especially in self defense, where I think it appropriate). Look at Iraq and Afghanistan — what has that done to America’s prestige and influence in the world? What about the impact of the failure in Vietnam? Look at the cost of those conflicts in real human lives, in dollars — did they achieve anything worth that cost? Iraq has had massive death and still isn’t stable or truly democratic — and it’s closer to Iran than to us these days! Afghanistan has the Taliban resurgent and war lords running the country. Practically, there are many arguments against military intervention in cases like that — I would argue that the results of those wars prove that the anti-war side was correct in 2001 and 2002. Look what those conflicts have done to the country. Even from a conservative perspective the war has been costly — there is no way the Democrats would have 60 in the Senate, control of the House, and have elected a black man with minimal experience named Barack Hussein Obama if it wasn’t for Iraq!

      • “I do not believe in ideologies . . . I’m a pragmatist. I don’t know how to solve these problems. I agree there are real difficulties with more spending and new government programs. But I don’t believe in the ideology of the free market either. Maybe if people compromised and looked for pragmatic answers to smaller problems, we could start to deal with a crisis that could be undercutting our very way of life.”

        Your desire to have your cake and eat it too is the height of anti-pragmatism — it is fantasy. To believe that you can both pay off debts and spend money gratuitously — which you suggest is possible — is dangerously delusional.

        You treat “ideology” as a slur, but it means nothing more than a way of thinking. Libertarianism, what you call as the “ideology of the free market”, is pragmatism. It accepts the vast amount of evidence that governments do not work well, as a general rule, because they use coercion to their own benefit or the benefit of a few. Free markets — which are not a talisman, and do need some government intervention in the form of refereeing — as a general rule do work as the best solution, because they allow the exercise of individual free will for the benefit of the several individuals. To believe that a government will (or even should, at the threat of force) act for the greater good of its citizens is dangerously delusional and idealistic. And taking past history as evidence, it is also a fantasy.

        Let’s look at it another way. Presumption A: Government spending is a problem. The only practical solution to this is to cut spending. Presumption B: The idea behind some government programs (such as Social Security) have merit. The only solution here that is compatible with presumption A is the free market. That will eliminate government spending and, if it holds that it has merit, individuals will pay for it on a level playing field and equitably. That is, no one will be compelled to pay for something of no benefit to them.

        Erb, you cluck your tongue without offering any practical solutions. You suggest that our health care system is broken and insist that government-run socialist health care is the solution, if not our societal duty. Yet you decry the national debt and deficit spending as outrageous. The problem is that, contrary to your pronouncement, you don’t like pragmatism, because it makes one face reality. The real solutions to our problems in government — especially if you believe spending is one of them — are not going to be liked by most people.

  • Just a reminder:
    Whatever the phraseology Erb uses when writing about a surplus (“current accounts surplus” this time), the bottom line is that there has been no surplus on federal level since Eisenhower. The total debt owed has increased every year since fiscal 1957 (this includes the so called ‘Clinton surplus’ which was only managed by Enron style accounting tricks, and when those tricks are accounted for shows an increase in federal debt). See the tables from the Treasury department here:

    • A current account deficit is made up primarily the trade deficit, and has to be balanced by a capital account surplus. Thus our high trade deficit was financed by money pouring in (to stocks, currencies, bonds) from places like China, Japan and Saudi Arabia. This allowed the dollar to stay valuable despite a massive trade imbalance. That was unsustainable; once the bubble burst it’s going to be imperative that we rebalance.

      The current account was in surplus before 1980, I’m not sure where you’re getting your information. It seems you are mixing up the current account with the budget. The budget, by most accounts was in surplus at the end of the LBJ administration and the Clinton administration. But like you, I don’t really put much stock in the late Clinton administration claims, given that was built on a bubble economy. So, anonymous, it’s you that got the phraseology wrong, mixing up fundamental concepts like current account with the actual budget.

      • You’re talking about the balance of payments (i.e. the net dollars traded for foreign currency), specifically the trade deficit which no one else was talking about. Bringing the trade deficit into a conversation about the budget deficit is confusing, and as far as I see it, not all that relevant as related to government spending. Of course, debt is bought through government bonds which is part of the balance of payments as is foreign aid which is part of the federal budget.

        You also seem to be underhandedly blaming the trade deficit on Reagan. We have had a trade deficit since the 1960s. To say that the current account (balance of payments) was in surplus before 1980 without further qualification also ignores that in 1973 the U.S. abandoned the Bretton Woods system (partial gold standard), where the government fixed the price of gold at $35 per ounce and kept a large reserve, which it sold and bought without regard to its actual market value. That was a sea change in the American and world economic structure, especially in relation to the balance of payments. The trade deficit was actually the impetus for that change.

        But I am going to assume, since you deprecate the “ideology of the free market”, that you favor government manipulation of currency and trade. There are only four ways that the balance of payments can be adjusted: (1) increase/decrease reserves of foreign currency; (2) engage in protectionist actions like tariffs; (3) change exchange rates, either by government fiat for fixed currencies or automatically for floating currencies; or (4) the market adjusts prices automatically.

        As for the trade deficit, it is meaningless. It will adjust itself over time, but if it doesn’t, who cares? The U.S. benefits through cheap foreign goods and an increased quality of life. I can think of only two arguments against the trade deficit: (a) unemployment and (b) national security. To address (a): those potential jobs lost are mostly semiskilled and unskilled labor, which can find employment in other industries that remain in the U.S. with relative ease. For example, the U.S. steel industry ceased to exist, but those people found other jobs. The transition can be painful in the short term, but it is beneficial in the long run. To address (b): the U.S. will maintain an advanced defense industry for the foreseeable future. While the U.S. relies on foreign supplies for some essential mineral resources abroad, in the event of war, these can mostly be replaced. For example, we are currently buying oil abroad, but the U.S. still has vast reserves of in Texas and Oklahoma that are no longer extracted because it is cheaper to import oil. If we were cut off from oil supplies for an extended time, a domestic oil-producing industry would re-emerge.

        I agree with Anonymous that “surplus” can be a misleading term. When people say Clinton had a “surplus”, they mean a budget surplus for that year. But the reality is that those budget surpluses were due to the error of incorrectly forecasting the economy’s growth, so the government ended up taking more tax revenues than it predicted it would. So, for a couple of years during the Clinton administration, it got a small amount more money than it spent, but it was something like 1% more. That rounding-error amount of money was far outweighed by the interest paid on the national debt and inflation. I’ve never heard that the Johnson administration ever had a budget surplus, but I suppose it is conceivable that it happened during his six-year term for the reasons above. As an unsupported assertion though, I find it dubious because LBJ was installing his “Great Society” and escalating the Vietnam War at the same time.

        • J, thanks for proving you don’t understand economics. The current account deficit has enormous implications, especially when it coexists with the budget deficit and high debt. Moreover, the current account was in surplus before Reagan became President, and has a steady decline since then (though slightly better now in terms of % of GDP than its worst position). Economists, especially The Ecnomist magazine of London, have been pointing to this as a potential disaster since the late nineties when it became noticable. For you to dismiss this and think only budget deficits matter, well, that’s just a lack of knowledge of economics!

  • Oh well, Grocky, you have your smears and insults, and I guess that’s all you’re going to do. I realize that when someone comes into a group with strong political biases and argues from a completely different perspective, that’s asking for insults. I hope that some will actually engage because I do want to learn other perspectives and test my own ideas. Frankly here and some old usenet debates are the only time I’ve aroused the kind of emotional reactions I see here. I find it fascinating, though given the attacks made on politicians and others (Reid, Pelosi, Kerry, etc.) of a similar tone, I don’t take it too seriously. I mean real world vs. internet insults from people who really don’t know me…it would be silly to take you too seriously. One question: do you accept the possibility that it may make sense to seriously deal with other opinions,or are you so sure that the “other side” is dumb, ridiculous or dishonest that it’s just political war to you?

    • “One question: do you accept the possibility that it may make sense to seriously deal with other opinions,or are you so sure that the “other side” is dumb, ridiculous or dishonest that it’s just political war to you?”

      You really, really just don’t pay attention, do you? I’ve already told you how I’m fine with Pogue, though I almost never agree with him. I thought glasnost often made interesting comments, too.

      And there are others, in other venues. You’re such a narcissist that you simply don’t want to admit that the problem is YOU. Dozens of people here see it. It could be all of them having a problem, or it could just be you. Common sense says it’s you.

      Strong political biases have nothing to do with it. It’s rank intellectual dishonesty from you, plus smugness, occasional incoherency, refusal to back down when others absolutely pin you to the wall on something stupid you say, obsessiveness with things like Iraq, repeating the same stupid stuff over and over, and your extreme condescension, pulling out your degree and the classes you teach as if that made anything you say any more true or interesting.

      I notice you didn’t have a thing to say about your Palin smear. Not going to touch that one, are you? Because you were caught dead to rights, and you’re too cowardly to admit it.

      Now I’m going to be busy for a few days, so I’ll have to depend on someone else to see if you try your patented “sneak back in after a couple of days to get the last word” tactic. Besides, I’m getting repetitive, though that seems to be necessary to counter your own repetitious BS. Which we’re all sick to death of, but you keep bringing it back, like a stupid dog keeps dragging back a rotten animal carcass and expecting to be praised for it.

  • Palin smear? What on earth are you talking about? Oh well, I see all you have are impotent insults. Have a nice day!

  • Again…irony strikes dear Doctor, in you defending yourself so strenuously on a post entitled “Speaking of zombie ideas”.

    I thoroughly enjoy a confirmation of many things Grocky has stated – as the most recent example –

    “The budget, by most accounts was in surplus at the end of the LBJ administration and the Clinton administration. But like you, I don’t really put much stock in the late Clinton administration claims, given that was built on a bubble economy. So, anonymous, it’s you that got the phraseology wrong, mixing up fundamental concepts like current account with the actual budget”…

    Did you even bother to look at the link provided which clearly shows a real dollar deficit increase, every year, from 1950 thru 1999?

    Since you yourself are averse to providing any links to prove ANY of your assertions (here, anew, an example… “the budget, by most accounts was in surplus”), I’m not surprised you could wave your hand (as Grocky asserts you do) and dismiss the figures (because they demonstrate you are wrong).

    Not to say real spending and real debt doesn’t increase during Reagan’s tenure, but to pretend we’ve actually had a surplus at some point is….wait, I just recalled who I’m talking to about reality disconnects…never mind.

    • (Heh)
      This is actually a small step forward for Erb. When he has previously been confronted with the facts about the lack of a true surplus under Clinton he has denied it, and continued to repeat it. Erb now saying he ‘does not put much stock in it’ is an improvement.
      Small steps Erb, small steps.

    • The budget surplus/deficit and total debt (not deficit) numbers are two different measures. The way people go over backwards to try to deny the budget surpluses that even Bush lauded a decade ago so as to try to prevent any positive claims from Clinton is laughable and irrational. A better argument is to simply note that Clinton benefited from an unsustainable bubble economy.

  • He is gone. He knew someone was going to quote him on that one.