Krugman vs Midknight Review. The professional versus the layman and the layman wins !!!

We have grown tired of Paul Krugman. He is a self-serving editorialist at the New York Times, a Marxist/Keynesian economist who actually has a post graduate degree, unlike many journalists on the Left.

Yesterday, he posted an op-ed in the Times entitled, 1938 in 2010. Kind of interesting ---- 1938 IN 2010. You can read the article here.

In our review of this editorial nonsense, we begin by pointing to the fact that Krugman nowhere discusses the Reagan solution to the second worst recession in modern day history, the Carter Years Recession. More than this, in leaving the Reagan solutions out of the debate, he rids himself of certain economic realities that did not exist in 1938 and run counter to several of his conclusions.

Here is our point/counterpoint discussion:

Point: Krugman begins his op-ed by describing the current crisis from his point of view: we entered a financial crisis situation; Obama's spending solutions mitigated the down-spin; more spending is critically needed; the voting public is greatly opposed.

Counterpoint: While it is generally conceded that the spending did some good, the decision to tell the American people to drop dead is at the center of the current and popular rejection of this regime. In fact, Krugman never discusses why the people are so very angry. He leaves that out of his op-ed because it does not work toward his desired conclusions. Obama is not a president of the people and the people hate that reality.

Point: Krugman moves into his main point - that lessons can be learned from the Roosevelt crafted "recovery." He actually implies that within a "few years" of 1938, the Great Depression was over and that lessons can be learned from the "miracle of the 1940's."

Counterpoint: Krugman knows better than this. The Stock Market did not return to pre-1929 levels until the early 1950's. THAT is the fact of matter and that part of the recovery had NOTHING to do with Roosevelt socialist policies. GDP took off in a good way shortly before the 1940's based upon the industrial demands of World War II. This aspect of the recovery was sustained with the return of the American Vet from the war and the demands he made on the economy (housing, schooling and related demands on domestic commodities) -- a good thing AND the industrial output of the nation's manufacturing base. Understand that the world's industrialized economies (GDP) ALL made similar advances as the the US -- evidencing our claim that Roosevelt's socialist strategy was not the end-all be-all Krugman suggests. Immediately after the war, the economies of France, Germany and Japan all experienced the same increases as did the United States (see the PDF here ). In short, the nation's recovery from the Great Depression was markedly tied to the War and the following health of the world's industrial powers.

To pretend to know the final results of Roosevelt-ism apart from WW II, our tie to the world economy and our manufacturing dominance on the world's state is a fantasy that only Krugman stubbornly supports. He alone, writes the current talking points for the FAR FAR Left.

Point: and so, Krugman makes this thematic statement and we quote: But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity. Overall debt in the economy — public plus private — actually fell as a percentage of G.D.P., thanks to economic growth and, yes, some inflation, which reduced the real value of outstanding debts.

Counterpoint: this is pure bunk. We borrowed money to fund the war because we had to. There was no choice. As early as the 1930 - 40's, the US economy was critically related to that of the industrialized world. The European War was our war, as well. After the War, we continued to outproduce the world in the manufacturing of steel and steel related products, the auto industry was booming and uncontested, we were supplying the world with airplanes, ships and warships. construction supplies, and outer space related product lines as well as the computer and all of its related fields of use. The "Roosevelt" recovery continued because the nation was producing product the rest of the world could not. Our last trade surplus was in 1975 but our export trade environment remained robust throughout the Reagan years (1980's) and on into the 1990's. Today --- and this certainly is not all the fault of the Obama effect -- the trade imbalance is a big difference between this "Great Recession" and the recessions of Roosevelt and Carter/Reagan.

Klugman does not allow for the difference in the times (the 1940's and now) nor in the abilities of the two central characters, Roosevelt and Obama. One was a capable politician, albeit a socialist, and the other is an amateur with no experience. One governed over the greatest industrial nation in history of the world, the other does not believe in perpetuating the greatness of this nation, the doctrine of American Exceptionalism or the military might of the strongest free nation known to man. The two men were/are both socialists and that is about it, for the sake of comparisons.

Further, Klugman ignores the fact that Roosevelt sold his theories, in part, based on the claim that his policies would prevent a repeat of the Depression/recession. It did not.

Point of post: to demonstrate the several shortcomings of the Krugman Opinion. It falls short of being a reasonable discussion because it ignores so many critical and comparative factors.