Imagine, if you will, someone who read only the Wall Street Journal editorial pageÂ between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have been better informed about the realities of the current economic crisis? The answer, I think, should give us pause. Can it be that our enemies were right?[ref]http://www.frumforum.com/were-our-enemies-right[/ref]
I can’t help but wonder where Frum has been all of these years, or if he’s ever read a column by Krugman in his life.Â After all, he’s talking about the housing-bubble cheerleading[ref]http://mises.org/daily/3530[/ref], window breaking[ref]http://www.youtube.com/watch?v=SQFhm4s_-Pk[/ref], interstellar warmonger[ref]http://mises.org/daily/5593[/ref], whose economic recommendations can be essentially boiled down to two lines.
- If it increases government spending or revenue, it’s probably a good thing
- If it decreases government spending or revenue, it’s probably a bad thing
Prescribing government as a panacea for all our economic woes has long been Krugman’s song and dance, like any good Keynesian.Â The problem is that the US government, and many other government’s around the world, have been more than happy to oblige.Â The last few years have seen the introduction of spending programs bigger than any we’ve ever seen, that have come with no measurable positive effects.Â However, since Krugman himself wasn’t in total control over where each and every dollar went, he can sit comfortably in his office and pretend that if only he was in control we would all be living in the Keynesian “permanent quasi-boom”.
Frum is apparently now attracted to the simplicity of how Krugman views the economy.Â Another quote in his article reveals a little more than Frum was perhaps planning on giving away:
When people tell me that Iâ€™ve changed my mind too much about too many things over the past four years, I can only point to the devastation wrought by this crisis and wonder: How closed must your thinking be if it isnâ€™t affected by a disaster of such magnitude? And in fact, almost all of our thinking has been somehow affected: hence the drift of so many conservatives away from what used to be the mainstream market-oriented Washington Consensus toward Austrian economics and Ron Paul style hard-money libertarianism. The ground they and I used to occupy stands increasingly empty.
Frum is feeling a little left out from the intellectual revolution that is sweeping the country.Â He’s refused to join the millions of people that are rediscovering what it means to be truly free and to enjoy the fruits of a market economy that strictly adheres to property rights, as the Founders of the USA intended.Â His friends are waking up and finding out that Frum has been keeping them in the dark about the true nature of the society that has been constructed around them, a society that Frum thinks only needs a little tinkering rather than a complete overhaul.Â So in his loneliness, he turns towards his previous intellectual rivals simply because they both agree that nothing is fundamentally wrong and that only the right tinkerers need to be in charge.
Another article that pointed out Frum’s recent statements and heaped praise on the high-priest of Keynesianism makes the amazing assertion:
Will Frum be ostracized for that remark?Â After all, Paul Krugman is supposed to be Public Enemy No. 1.Â Or will more Republicans begin to agree that, although government spending does indeed need to be cut eventually, and the debt problem does need to be addressed, suddenly chopping, say, $1 trillion of government spending next year is not the best way to get ourselves out of this mess?[ref]http://www.businessinsider.com/david-frum-paul-krugman-right-2011-10[/ref]
The author, Henry Blodget, is of course referring to Ron Paul’s recent platform.Â However this only reveals just how clueless the mainstream media is about economic history.Â Does Henry not realize that in 1946 the US government cut spending by roughly 50% (equivalent to cutting $1.6 trillion in a single year) and rather than the severe depression that Krugman’s forbears predicted, the economy experienced one of its greatest booms since the Industrial Revolution?[ref]http://econstories.tv/wp-content/uploads/2011/05/The-Great-Depression-of-1946.pdf[/ref]Â Not to mention the millions of soldiers returning home from fighting in foreign lands that magically didn’t increase the rate of unemployment.
Frum, being (barely) Canadian, might recognize a tale from his own country.Â In the early 1990′s all of the deficit spending of the previous decades was finally catching up to us.Â Our debt to GDP ratio was over 70% and the government’s credit rating was downgraded in 1992.Â The solution involved only marginal tax increases, but significant spending cuts in order to balance the budget.
In a matter of years, the budget was balanced, our credit rating restored and the economy began a strong recovery.Â Our debt-to-GDP ratio now sits at a comfortable 40%, compared to the USA who is now approaching 100% (and actually far more if you count their off-balance sheet liabilities and the discounted value of their future pension and medical entitlements).Â Monte Solberg, a finance critic for the conservative Reform Party who supported the Liberal’s deficit cutting program, sounds eerily like the dreaded Ron Paul here:
If you donâ€™t make the cuts now in things like some of the big entitlement programs, then those programs themselves will have to be cut much more deeply in the future and the pain will be much deeper… So better do it now â€” itâ€™s the old saying, you canâ€™t dock the dogâ€™s tail an inch at a time. You should just do the job, get it done, face up to the pain and in the end youâ€™ll be better off.[ref]http://news.nationalpost.com/2011/08/08/analysis-what-canadas-debt-crisis-in-the-90s-can-and-cant-teach-the-u-s/[/ref]
Faced with facts like these, it’s hard to wonder why Frum wouldn’t consider joining the newly invigorated and increasingly global movement for true liberty.Â However, when dealing with people that have been following deeply flawed political ideals like Keynesianism and Neo-Conservatism for so long, it can be hard to break the spell since so much of their identity has been tied up in it.Â Frum feels it’s easier to make the leap over to a school of thought that may disagree somewhat on ends, but still recommends the same means.Â It is at the altar of those means, coercive government, that Keynesians and Neo-Cons worship and it is there that Frum now finds kinship with his former rivals.
Tags: broken window, Capitalism, David Frum, Debt, economics, education, free market, Government intervention, Housing Bubble, Inflation, Interventionism, keynes, Keynesianism, krugman, laissez faire, Ludwig von Mises, personal liberty, philosophy, Regulation, Stimulus