Krugman admits WWII turned economy around, not “New Deal”
e may not have meant too (because doing so undermines the liberal shibboleth that government intervention via the New Deal is what turned the economy around), but Paul Krugman did indeed admits that WWII saved our economy after the Depression, not the policies of the "New Deal":
All around, right now, there are people declaring that our best days are behind us, that the economy has suffered a general loss of dynamism, that it’s unrealistic to expect a quick return to anything like full employment. There were people saying the same thing in the 1930s! Then came the approach of World War II, which finally induced an adequate-sized fiscal stimulus — and suddenly there were enough jobs, and all those unneeded and useless workers turned out to be quite productive, thank you.
All true, but then the US wasn’t carrying a $15 trillion dollar debt load (think huge financial drag) or its equivalent then either. That single fact makes a world of difference. But again, as you can tell, it’s Mr. One Trick Pony again pushing for an “adequate-sized fiscal stimulus”. In the absence of a world war I think it should be clear by now what he’s asking for … again. I mean what’s $16 trillion among friends, right?
He gets a bit cryptic about it, but it’s the same old demand:
There is nothing — nothing — in what we see suggesting that this current depression is more than a problem of inadequate demand. This could be turned around in months with the right policies. Our problem isn’t, ultimately, economic; it’s political, brought on by an elite that would rather cling to its prejudices than turn the nation around.
See … government can fix this, if it just would. So says Paul Krugman. Interesting …”the right policies” were admittedly not the reason for the recovery of the US after the Depression but they are what can save us now. Because, you know, the two situations are just alike, right? WWII and the “right government policies”? Or did I miss something?
And this guy likes to think of himself as an “economist”?