I love this kind of historical smackdown of irritating asshole Paul Krugman.
Just to get citizens into a suitably docile condition to receive the
President’s State of the Union address, Paul Krugman reminds them in a recent New York Times column that they aren’t bright enough to criticize government policy.
Americans
are especially thick, apparently, about the need for deficit spending.
“It’s very hard,” Dr. Krugman confides, just as he might in a faculty
lounge, “to try to communicate even the most basic truths of
macroeconomics, like the need to run deficits to support employment in
bad times.”
She goes on to say part of the reason there was a double dip recession in late 30s was because of the Wagner Act which was pro-union to the point of companies not hiring people. There was also something called the "undistributed profits tax,"which sounds absolutely draconian. In other words Apple would have gotten taxed on its cash hoard simply because they built up a cash hoard. I cannot even imagine what damage that sort of thing would have done in modern times.
She also points to one of the biggest problems of the late 30s which was uncertainty. No one knew what the government was going to do next so they hunkered down. That is pretty much what is happening today. People don't know what will happen when Obamacare spools out and what he will do next with his pen and phone. At least the threat of debt defaults and government shutdowns are off the table for a two years.
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