Herbert Hoover Ascendent?

In a recent New York Times article, Paul Krugman sees Europe and America channeling Herbert Hoover:

As far as rhetoric is concerned, the revival of the old-time religion is most evident in Europe, where officials seem to be getting their talking points from the collected speeches of Herbert Hoover, up to and including the claim that raising taxes and cutting spending will actually expand the economy, by improving business confidence. As a practical matter, however, America isn’t doing much better. The Fed seems aware of the deflationary risks — but what it proposes to do about these risks is, well, nothing. The Obama administration understands the dangers of premature fiscal austerity — but because Republicans and conservative Democrats in Congress won’t authorize additional aid to state governments, that austerity is coming anyway, in the form of budget cuts at the state and local levels.

And he thinks the result will be a prolonged and historic economic depression brought on by an anal and conservative austerity ethos:

I don’t think this is really about Greece, or indeed about any realistic appreciation of the tradeoffs between deficits and jobs. It is, instead, the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times.

But you can’t have Roosevelt without a Roosevelt supporting Congress (which we definitely ain’t got, and are not going to have anytime soon). Over the next several years we’ll see if Paul Krugman proves to be a Chicken Little, or if he’s right.

About Santi Tafarella

I teach writing and literature at Antelope Valley College in California.
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6 Responses to Herbert Hoover Ascendent?

  1. andrewclunn says:

    Oh Paul Krugman… The man is either much smarter than I am and able to see things that I am not even after he clearly states his case, or he’s an idiot who modifies his economic theories to match his political assumptions (which would be bad considering that he’s an economist.)

  2. TomH says:

    Krugman is clueless. The housing crash was inevitable, due to a demand created by hyper-easy credit and associated govt. housing policy (encourage people who couldn’t afford houses to buy them). This “created” jobs. When the bust happened, lots of jobs disappeared because the housing bubble was unsustainable. The dems’ “stimulus” contained 4% stimulus and 96% pork. The dems wasted the “stimulus” money and dug our deficit hole even deeper without doing much in the way of helping the economy. They could have instead sent more of the “stimulus” to rebuild roads and bridges, which would have saved a lot of construction jobs, but they didn’t do it. They could have reworked the nuclear regulatory laws to be more practical like the French, which would have encouraged construction of nuclear plants, but they didn’t do it. They could have spent money building infrastructure for natural gas to power govt. vehicles, which would have saved construction jobs, but they didn’t do it.

    Now, the only thing remaining is for private industry to increase capital spending, but with the climate of fear created by the dems, that ain’t gonna happen. Higher taxes next year aren’t gonna encourage private industry to increase capital spending. If the dems lose one of the houses at the Nov. elections, that might help abate the climate of fear in business caused by the dems, which might cause an increase in capital spending by private industry, which would help relieve unemployment. Working against this is the pressure from the media for the repubs to play the populist game and attack business, so I’m not holding my breath.

    Krugman’s an idiot.

    • santitafarella says:

      Tom H:

      I agree with you about nuclear energy. The stimulus was scattered and lacked a focusing visual or narrative.

      Would you support, given what you said above, a Roosevelt-style dam/infrastructure project: such as building a trillion dollars worth of nuclear power plants and installing high speed rail around the country?

      To my mind, such a focused stimulus is something I could possibly support: anything that would reduce oil dependency, and make the economy more efficient.

      —Santi

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