Racist Republicans & Myths of economics
Leave it to Krugman to set the record straight. In this op-ed column, Krugman lays down the gauntlet - that financial conservatives and racists are one and the same.
Krugman writes "...the G.O.P.’s decision, long ago, to seek votes from Southerners angered by the end of legal segregation. With the old Confederacy now the heart of the Republican base, boasting about the party’s Civil War-era legacy is no longer advisable."
It was about 40 years ago that the solid-south started to break from the Democrats. I guess fifty years ago Krugman would have been a died-in-the-wool Republican, since he appears to discredit the south. What Krugman, and other South haters, seem to not understand, is that in the last 60 years the Southern populaton has grown by 150%, while Northern states have grown by only 81%. A lot of Northerners live in Southern states and while climate is a big factor in Northeners moving south, its also about their economies. But leave it to Krugman to look at the solid-south and call it racism, rather than economics.
Krugman continues "But sooner or later, Republicans were bound to notice other reasons to disavow Lincoln. He was, after all, the first president to institute an income tax. And he was also the first president to issue a paper currency — the “greenback” — that wasn’t backed by gold or silver."
This is pure beauty. War is the #1 reason why countries leave a gold/silver standard, because they'd go broke if they didn't. Yet today with the wars started by Republican George W Bush, Krugman is trying to say that gold bugs are pissed of, not at GW, but Lincoln! Amazing! The fact that we are debasing our currency today because of GW would not make good reading for Krugman's liberal base.
Krugman makes a few slam dunk observations. He writes "Start with that bit about debasing our currency. Where did that come from? The dollar’s value in terms of other major currencies is about the same now as it was three years ago."
And he's 100% correct! Of course comparing our fiat currency to something other than a bunch of other fiat currency's would have been the honest thing to do. And since he's mocking gold bugs, its interesting that he doesn't compare our currency to gold, but even more interesting is he only goes back three years. Why? Because the debasing of our currency started with the 2nd Iraq war. How nicely this ties into the fact mentioned earlier about debasing our currency during times of war - a fact Krugman smartly avoids.
Krugman continues "And as Mr. Bernanke pointed out, consumer prices rose only 1.2 percent in 2010, an inflation rate that, for the record, is well below the rate under the sainted Ronald Reagan."
I absolutely love this one - the complete acceptance of gov't numbers. As a child I remember being told that liberals were smarter than conservatives because they questioned authority and the government (this was the 1970's). Today, the liberals repeat the gov't lines and trust gov't numbers as PROOF, even though they've been discredited by anyone who has looked into their methodology.
He concludes by stating "After all, even Milton Friedman saw the conduct of monetary policy as a technical issue, not a matter of principle; his complaint about the Fed’s role in the Great Depression was that it didn’t print enough money, not that it printed too much."
Now, I like Friedman a lot, and I'd like to see Krugman advocate Friedman's ideas a lot more, which he won't since Krugman loves printing money while Friedman argues for a strong currency. More importantly he takes Friedman out of context. Friedman was attempting to discredit Keynes when he argued that large scale gov't deficit spending would NOT stop the Great Depression (which it didn't) and instead that monetary policy was needed to end the contraction of the money supply. Friedman was opposed to the Federal Reserve, but in writing about the Great Depression he noted that since it does exist, it could have increased the money supply. His real belief was that had the Federal Reserve NOT existed, the Great Depression would NOT have happened or the severity would have been much less and its length would have been very short indeed.
The more I read Krugman, the more I realize how his politics are getting in the way of any serious economic discussion.