From The Daily Bell is another rant on the economics of Paul Krugman and his like:
Krugman: Last Gasp of the Hamiltonians?Wednesday, January 04, 2012 – by Staff ReportAlexander Hamilton
Nobody Understands Debt … In 2011, as in 2010, America was in a technical recovery but continued to suffer from disastrously high unemployment. And through most of 2011, as in 2010, almost all the conversation in Washington was about something else: the allegedly urgent issue of reducing the budget deficit. This misplaced focus said a lot about our political culture, in particular about how disconnected Congress is from the suffering of ordinary Americans. But it also revealed something else: when people inD.C. talk about deficits and debt, by and large they have no idea what they’re talking about – and the people who talk the most understand the least. – NYTimes/Paul Krugman
Dominant Social Theme: We can borrow our way to prosperity.
Free-Market Analysis: Paul Krugman is at it again, defending the socialist economics of John Maynard Keynesagainst the common sense of normal people. Nobody understands debt, he writes, except of course for … him. Krugman.
He understands it so well that he is convinced that nations can borrow their way to prosperity. Krugman, who evidently doesn’t like people, prefers to deal in abstracts like “nations” – as if nations are not actually composed of people. Krugman sees only the broadest picture.
Generally, Krugman, the winner of the faux Nobel Prize for Economics, is not much enamored of human beings. He has specialized, in fact, in the sophistry of non-human economics. That is, he has made a career – and won a “Nobel” prize – for using econometrics to create models of ways that governments can use tariffs and industrial planning to protect and nurture nascent companies.
All of this, of course, denigrates, or at least bypasses, the individual. Krugman is the original anti-Austrian. Where Austrian, free-market economists see the capacity of the individual human to think and act for himself or herself, Krugman merely sees moveable game pieces to be disposed of at will by their respective governments.
For Austrians, every government, monopoly action is methodology of force doing damage to the delicate fabric of voluntarism and free markets. Too much damage and life becomes Hobbesian – “nasty, brutish and short.”
But Krugman is an economic authoritarian, a deep believer that government force is a necessity. It is not just trade where he is apt to prescribe government force but also when it comes to the business cycle itself and the inevitability that government will outspend its revenues. Here’s more from the article:
The way our politicians and pundits think about debt is all wrong, and exaggerates the problem’s size. Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments …
It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of U.S. claims on foreigners. And because foreigners tend to put their U.S. investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction …
And that’s why nations with stable, responsible governments — that is, governments that are willing to impose modestly higher taxes when the situation warrants it — have historically been able to live with much higher levels of debt than today’s conventional wisdom would lead you to believe. Britain, in particular, has had debt exceeding 100 percent of G.D.P. for 81 of the last 170 years. When Keynes was writing about the need to spend your way out of a depression, Britain was deeper in debt than any advanced nation today, with the exception of Japan.
You see, dear reader, the dismal science of a certain kind of statist-oriented economics has not moved an inch, not an iota since Alexander Hamilton voiced the same ludicrous sentiments 200-plus years ago. A national debt is a blessing, he said then, and since then America has been blessed almost to death.
The real issue here, we’ve been trying to point out, isn’t even one of fiscal or monetary policy. It runs much deeper than that. Krugman is a paid disseminator of the idea that bureaucrats and politicians can “run” the economy using the levers of a democratic state.
But the more we look into these assumptions, the more we are apt to label them dominant social themes. Yes, they are the fear-based promotions of an Anglosphere power elite that utilizes them to frighten middle classes into giving up power and wealth to globalist institutions.
When one peers intently at the entire spectrum of civic instruments a surprising insight can be realized: All of it is a kind of promotion, a series of engineered assumptions designed to justify the rule of a few over the rule of the many.
Everything from democracy itself, to econometrics, to false-flag wars and other progressive promotions have seemingly been developed and proselytized in order to ensure that people believe government has a serious and direct role in their lives.
Free-market economics, of course, tells us otherwise. Every law and regulation is a price fix, removing wealth from those who generate it and transferring it to those who didn’t and may not know how to utilize it so effectively and efficiently.
But that is NOT what people are taught. People are taught grimly and with great zeal from cradle to grave that “leaders” – good ones anyway – have the answers to the problems that ail society. Never mind that a “good” political leader can only get things done via force – through laws and military and civil police actions.
The idea of “leadership” itself, especially in the political sphere, is a sub-dominant elite theme of sorts. As is Krugman’s idea that leaders can spend vast amounts of other people’s money to build civil society. These societies, in fact, in the modern day are built on the money-from-nothing printed by central banks.
Central bank Dreamtime, married to immense deficits are not the panacea Krugman claims they are. They are actually the way the state’s proponents create legitimacy by digging such a deep debt-hole that citizens can no longer see the sky. The worse the problems are, the more the sophists are apt to cry out for more government.
Krugman calls the American conservative and libertarian concern over government spending a “wrongheaded, ill-informed obsession.” But the issue is not one of mathematics or even spending. The real issue is that the economic system that Western democracies have utilized with greater and greater aggression in the past hundred years is designed to create a maximum amount of state control.
The REASONS are fungible. In fact, they are gibberish. They don’t matter. Only the further creation and expansion of the state matters. Any justification will do.
In the 21st century, the Internet Reformation is gradually exposing this larger paradigm. Turns out, a tiny group of impossibly wealthy elitists run the world and want to create world government. This power elite grabs onto ANY justification to expand government. Krugman is merely an apologist for this vast and vicious conspiracy.
Two hundred-plus years ago, US politico Alexander Hamilton made the same arguments. They were for the most part rejected then, initially anyway, and now they are in the process of being rejected again.
They are an advertisement for government. And government is a facility that utilizes price-fixing to try to give the impression that its monopoly rent-seeking can give rise to prosperity. It cannot.
But if government were to go away, how would the mercantilist elites that pull government levers behind the scenes continue to operate? Krugman is, of course, an elitist supporter and promoter. That’s why he makes the arguments he does.
Conclusion: That these arguments seem increasingly like a kind of cry of desperation is perhaps a hopeful sign for the rest of us.