Monday, August 15, 2011
No, Mr. Krugman … War is NOT Good for the Economy
Military Keynesianism Gone Haywire: Paul Krugman Pines For World War ... Based On Ginned-Up Reasons
As I have repeatedly documented, influential Americans are lobbying for war in order to save the American economy - what is often called "military Keynesianism".
For the first couple of years that I wrote on this topic, commenters more or less said, "That's crazy, no one is calling for war to stimulate the economy".
When allegations surfaced that Rand Corporation was lobbying the Pentagon to start a war to save the economy, Washington Post hack David Broder started promoting war as an economic panacea, and former Goldman Sachs analyst Charles Nenner and economist Marc Faber started predicting a major war, people started paying more attention.
And well-known economist and writer Paul Krugman has argued for years that World War II is what got us out of the Great Depression.
For example, Krugman writes today in the New York Times:
World War II is the great natural experiment in the effects of large increases in government spending, and as such has always served as an important positive example for those of us who favor an activist approach to a depressed economy.
But Sunday, Krugman went over-the-top by more or less calling for a major war ... and manufacturing a false justification for starting one, if need be:
If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better.
There was a Twilight Zone episode like this in which scientists fake an alien threat in order to achieve world peace. Well, this time…we need it in order to get some fiscal stimulus.
This statement is disturbing for two reasons.
First, many economists have demonstrated that - contrary to commonly-accepted myth - war is actually bad for the economy.
And the following statement by Mr. Krugman implies - whether intentional or not - the use of hanky panky to justify military spending:
And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better.
Doesn't Mr. Krugman know that governments from around the world have admitted that they carried out "false flag" attacks in order to justify their aims? See this and this.
How can he be so irresponsible to publicly pine for all-out war based upon ginned-up reasons?
Postscript: There have been Internet rumors floating around for years that the government was planning to use a "faked alien invasion" to justify a power grab by the government. I have no idea whether or not that rumor has any truth, and it is irrelevant for the purposes of this post.
13 comments:
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ReplyDeleteIt's called the Broken Windows Fallacy.
ReplyDeleteWhy do I think "Nobel Prize Winner" krugman hasn't even read Bastiat let alone know about the fallacy.
But what the fuck do I know? I didn't go Yale or MIT
Matty,
ReplyDeleteFiscal Stimulus doesn't create LASTING jobs.
It creates jobs for the sake of creating jobs. And it does so at the expense of the people who would create lasting jobs had the money not been stolen from them. (Read: the small business owner)
Dude, you're the best. But I think you misinterpreted Mr. Krugman egregiously.
ReplyDeleteI understand you're not much of an economist, but to add some clarification. In 1937 the government plunged back into recession b/c of premature spending cuts during a recovery.(Sound familiar?) So what Mr. Krugman was eluding to is what really brought us out of that recession was the increased gov't spending via defense spending. But by no means, am I a proponent of this. Jobs should be created for public welfare and not the murder of innocent people. But Mr. Krugman was being facetious. He's actually a fierce advocate of human right's and the dismantling of the Black Water and Haliburton-ized corporate media. He's a voice for us- the unemployed.
Enjoy your work bro (or sis). Keep it up!
CCK,
ReplyDeleteYou are correct. But the fiscal stimulus jobs serve their purpose, give people money to stimulate small business growth. Products will be bought, sales will rise, and jobs will be created.
"How can he be so irresponsible to publicly pine for all-out war based upon ginned-up reasons?" - He may be another deeply ignorant person with very few morals.
ReplyDeleteHe may just be like the politicians, that is, sharing traits with psychopaths (as you've documented extensively).
Just a thought.
Either way, the amount of high-profile organisations and people promoting war to cure the worlds' ills is again - highly disturbing to say the least...
"Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed." - Dwight D. Eisenhower.
Yes, I believe the claim that Mr. Krugman is all for human rights and the welfare of the people. He does say, however, that if we made up some excuse to spend money to put people back to work, even if for a short time, this would be O.K. with him.
ReplyDeleteThe issue that Krugman raises is whether there is any justification for government and its institutions outside of the fact it is spending money,...and the money spent will go to someone's pocket. By talking about the space alien scenario he suggests that there need be no justification. All we have to do is see that there is some good consequence of government spending.
I have to agree this is wrong headed. I suspect the man is frustrated that his sensible suggestions to make wise use of our tax monies are being ignored, so he thought that if he mentioned space aliens, more people would take him seriously. Considering the press his comments have recieved...he may be correct.
The idea that military spending has been justified, not because we need so many guns, but because it's a jobs program, has been conventional thinking since Vietnam. You can't vote against the military budget because, if you are in Congress, you would be cutting some local job or hurting some local business.
The insanity with Krugman's suggestion is not that people haven't thought of it before or have shied away from it because it is too absurd. People have thought that the consequences of spending are always more important than the project one is supposed to be furthering by the spending. So, for example, people in congress spent the trillions of dollars in bailouts, not because they understood where the money would be going or what it would be doing. They were told nothing of these specifics. Instead, they were told about consequences...if the money wasn't given to the banks, they were told, there would be martial law in the streets. So, the money was paid to satisfy the extortionists in the financial community.
No, what Mr. Krugman said wasn't really absurd because it is actually what goes on most frequently in Congress, and his suggestion just clarifies that this is so.
Funny, those who advocate war never have to fight in them. Romer and Krugman typify the .02% of fascist global elite who want war; they will get war, but not the kind that they may want.
ReplyDeleteRevolution is war, if we have an American revolution against the bankster global fascist elite and their oligarchy that has overthrown our government, the fascist will be considered traitors to Americans.
We will see how brave Krugman and Romer will be when they have to fight in their own war.
WWIII, a nuclear war without doubt, will help the World's economy a million times like Fukushima nuclear disaster is helping Japan's economy.
ReplyDeleteAnd expanding conventional war was something that Bush (and Obama after him) already tried to no avail: no matter how much is spent in Pakistani-murdering drones, in Iraq's "reconstruction" (destruction it seems to me), in Libyan plutonium-grade "humanitarian" intervention or in military aid to Colombia and Israel... the economy does not seem to care.
There is a big problem that no accountancy approach of the economy will ever solve: resources. The money cycle, markets... are not the real problem, not even the vampire lifestyle of banks (after all "it's only money", as my dad, a well-off bourgeois, used to say). The real problem is that the resources of Earth, which we use to make stuff and as dumping pit for our residues, are already finished. At least with an oil-based economy. Maybe with a solar energy economy we could do for much longer but there is no interest in developing energy sources that can't be hoarded and speculated with like oil or nuclear. Solar (or renewables in general) would mean decentralization and that is bad for the robber barons, who aim for concentration of wealth and power in their own hands.
Money is after all just an accountancy tool, not the real economy: the real economy is the cycle of production and distribution (and disposal), in which money is only a tool.
Once upon a time there was a balanced federal budget with surplus.
ReplyDeleteThen Bush II was "elected".
Soon enough after Bush II took office endless wars broke out.
Then came "The Great Recession" and 9%+ unemployment and huge deficits.
To say war brings prosperity is preposterous. It requires a re-write, a distortion, and a fabrication of recent history.
Gerald Celente.. and Charles Nanner.. both charlatans who have missed more predictions that waht they
ReplyDeleteListen to the Charles Nanner's interview with Pimm Fox /Bloomberg radio back in March 9 2011.
http://charlesnenner.com/
Click on radio and listen to the first show on the right.
In that interview he said the market this year was going to do "sideways" and he said he had seld all this gold because it was very risky.. he completely missed the current market downturn and the run up in gold.
Anyone who listened to this moron's advice lost quite a bit of money.
NOBODY can predict the future, stop scaring people with such non-sense, specially by quoting morons who cannot predict anything.
correction:
ReplyDeleteGerald Celente.. and Charles Nanner.. both charlatans who have missed more predictions than what they have hit.
Listen to the Charles Nanner's interview with Pimm Fox /Bloomberg radio back in March 9 2011.
http://charlesnenner.com/
Click on radio and listen to the first show on the right.
In that interview he said the market this year was going to go "sideways" and he said he had sold all his client's gold because it was very "risky".. he completely missed the current market downturn and the run up in gold.
Anyone who listened to this moron's advice lost quite a bit of money.
NOBODY can predict the future, stop scaring people with such non-sense, specially by quoting charlatan who cannot predict anything.
The idea that Krugman is here genuinely arguing for a war or even increased military spending is absurd.
ReplyDeleteHe is making an economic point (whether you agree with it or not).
That is all.