John, I wish Krugman and Benen et al would make their case within the context of understanding the major differences between the 30s and now, because it's those differences that must shape what we do.
The most important are that in the 30s, the government had no debt, income tax rates were very low, and the US was the world's largest manufacturing base. Now we have a shrinking manufacturing sector, enormous debt loads at every level of government, and relatively higher (much higher) income tax rates.
Importantly, too, is that there were no safety nets of any kind in place....no unemployment compensation, no food stamps, no HUD assisted housing, no SS and Medicare for the older, no Medicaid for the younger poor, and so on. A government with no debt going into the Great Depression could add all these programs, and this is exactly what both Hoover and Roosevelt did.
Now liberals seem to want a repeat of Roosevelt style deficit spending. But the Roosevelt programs are here...up and running. Would even Roosevelt want these programs expanded?
I don't know the answer, of course, but really would respect both K and B more, if they would make their arguments more in the context of historical realities.
The other thing Krugman and Benen both owe their readers, is an addressing of why, after all the micro-managing of the economy by both Hoover and Roosevelt, unemployment was still at 19% in 1939. Ten years of endless legislation focused on shaping spending patterns, savings patterns, tinkering with the tax code, esp. corporate taxes. Legislation would be passed, only to either be disallowed by the Supreme Court, or rewritten by Congress when some nasty unintended consequences manifest themselves. It was an amazing spell of legislative micro-managing that some could argue produced relatively little. One could even build an argument that it was actually all this micro-managing that dragged the economic healing process out so long.
At any rate, I find it hard to take either of them seriously because I never see any evidence that they understand the sum total of the Great Depression, how it was a long, slow evolution, complete with fits and starts. They pull out isolated events, isolated years and assume causalities here and there that may not necessarily be there. |
