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Tilting at Windmills

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November 16, 2008

KRUGMAN SCHOOLS WILL.... On ABC's "This Week" earlier, George Will explained his belief that FDR financial/regulatory policies discouraged investment and created an environment in which the "depression became the Great Depression."

Fortunately, Will was sitting next to Paul Krugman.

To hear Will tell it, the Roosevelt administration stood in the way of investors. In a fairly devastating 45 seconds, Krugman not only set the record straight, but explained that it was FDR's desire to balance the budget and cut federal spending that contributed to a decline in 1937.

My antipathy towards Will has lessened this year, after he had some genuinely sharp criticism of the McCain/Palin ticket, but he's still spouting conservative nonsense on economic issues, and it was highly entertaining to see him receive some well-earned comeuppance from the Nobel laureate to his left.

Thanks to our friends at Firedoglake for posting the clip to YouTube.

Steve Benen 2:55 PM Permalink | Trackbacks | Comments (42)

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That is just, excuse me, fucking unbelievable. That Will would spout his nonsense with a Nobel Prize winner in Economics sitting next to him... AUGGGHH.

I think I have a new understanding of why there aren't any libruls on the Sunday talk shows. It would be just too embarrassing.

Posted by: MattF on November 16, 2008 at 3:15 PM | PERMALINK

I can hear the argument now: Teh Nobels ruined the brand last year with the Gore award, so Krugman's Nobel has no meaning and therefore, Roosevelt=commie.

Am I close?

Posted by: trollhattan on November 16, 2008 at 3:22 PM | PERMALINK

I love it. As the Will begins to speak he keeps glancing at Krugman, in anticipation, I imagine, of the smack down he's about to receive.

Posted by: rege on November 16, 2008 at 3:30 PM | PERMALINK

That Krugman would school the ignorant Will on economics is no surprise. I look forward to the day when Will is on some panel and he gets schooled on politics and/or baseball by Nate Silver.

Posted by: DJ on November 16, 2008 at 3:37 PM | PERMALINK

Do suppose Will really does believe that Krugman got the Nobel because of the committee's political preferences and not his work on trade? Or does Will really believe that what he knows about economics and economic history really would fill more than, say, two thimbles? Recall his WaPo column that adjusted the oil price for inflation and failed to do the same for stock indices.

http://www.washingtonpost.com/wp-dyn/content/article/2006/10/18/AR2006101801502.html

Or Slate's take-down of it at http://www.slate.com/id/2152253/

Posted by: batavicus on November 16, 2008 at 3:37 PM | PERMALINK

Krugman not only set the record straight, but explained that it was FDR's desire to balance the budget and cut federal spending that contributed to a decline in 1937

Note that Benen did not accurately report what Krugman actually said: "... balance the budget, or try to, and he RAISED TAXES and cut spending and the economy went down again..."

Amusing how "raised taxes" gets overlooked by liberals...

Posted by: David on November 16, 2008 at 3:38 PM | PERMALINK

Custard pie with a graphical crust...

Krugman had recent posts on his blog in regards to the New Deal and the 1937 downward blip.
George Will obviously took his talking points from the WSJ article Krugman critiques in the second linked post.

After George gets done licking the custard off his face, he needs to bookmark Paul.
Posthaste and postface...


Posted by: koreyel on November 16, 2008 at 3:45 PM | PERMALINK

Am I mistaken, or did Sam Donaldson look like he was in total agreement with Will's nonsense? Whoever decided that reporters are the ultimate experts really deserves a lot of the blame for everything that's gone wrong over the past eight years (and beyond). Republicans couldn't have succeeded as well as they did if reporters actually knew what the hell they were talking about.

Posted by: Doctor Biobrain on November 16, 2008 at 3:48 PM | PERMALINK

Didn't see the clip. But wasn't there some research out of UCLA that indicated that FDR greatly worsened depression with NRA?

Theory of case is pretty straightforward. NRA artificially inflated wages and prices. Prices and wages above "market clearing" levels depress demand, and therefore supply, increasing unused manufacturing capacity and unemployment.

I know it's heresy imply any sort of ideological complexity on this site, but is it just possible that some of FDR's "liberal" policies (e.g. the WPA) ameliorated the Depression and others (e.g. the NRA) exacerbated it?

Posted by: kaplan37 on November 16, 2008 at 3:49 PM | PERMALINK

Earlier in the program Schwartzenegger explained the mortgage problem as being caused by the government forcing lenders to make loans to unqualified people. He was not challenged on the statement, which is the republican line. They seem to think if they say it enough it will be believed.

Posted by: Cycledoc on November 16, 2008 at 3:52 PM | PERMALINK

Amusing, David, how you stopped there and did not address "it took an enormous public works program known as WWII to bring the economy out of the depression."

Are you arguing that it was tax cuts during WWII that brought the economy out of the depression?

Posted by: doretta on November 16, 2008 at 3:54 PM | PERMALINK

George Will is the best argument against medical science making it possible for people to live to 150 years.

Posted by: nonheroicvet on November 16, 2008 at 3:56 PM | PERMALINK

My antipathy towards Will has lessened this year

Regardless of the reason, that was a mistake. This past summer, I decided to start a blog about the WaPo op-ed page, and as a result, I was actually reading Broder, Will, Marcus, Gerson, Cohen, Applebaum, Samuelson, Krauthammer, and the rest.

Nobody fell further in my estimation than George Will. Starting the Fairness Doctrine Paranoia rolling (see his Aug. 17 and Sept. 18 columns) was the least of it. His writing was all but incoherent, having no internal logic or structure. Instead, his columns were pretty much a random walk through whatever nonsense he felt like spouting off about on a given day.

He made everyone else on that op-ed page look good by comparison, and that's no easy feat. Even Robert J. Samuelson and Richard Cohen go somewhere with their columns, even if neither the trip nor the destination are worth the effort of reading what they have to say. Will, most days, doesn't even meet that minimal standard.

He's got a reputation for being intelligent and erudite, but he's completely coasting on his laurels. If he were an unknown blogger, he'd stay unknown.

Posted by: low-tech cyclist on November 16, 2008 at 4:04 PM | PERMALINK

Some of you guys seemed to be shocked by the fact that the Donaldson seems to agree with Will's critique of FDR. The reason for that is Donaldson doesn't know what Will is talking about, just because he's on TV doesn't make all knowing. Here is a News-flash, TV talking heads are not the most knowledgeable people on the planet. My God have you ever heard Cokie Roberts! Rege is correct to point out that Will keeps glancing over at Krugman as he is laying down his nonsense, thats because Will probably doesn't know whether he is right, he just recited what he has heard or read, from other conservatives. TV talking heads are just that, talking heads, and it seems that we need to start demanding that shows like Meet the Press, Face the Nation, and This Week start employing people with actual knowledge about the issues on the table rather than asking Cokie Roberts what she thinks is the cause for the financial crisis (Answer: she doesn't have a clue, she's not an economist!).

Posted by: Professor Chaos on November 16, 2008 at 4:06 PM | PERMALINK

He's got a good way of setting the record straight in less than a minute! We need more! Here's to all the Krugmans and the Maddows and the Robert Reichs and Thomas Friedmans and all those who actually have a grasp on history and economics and policy--AND can speak to it so cogently and forcefully.

Posted by: we need more Krugmans out there on November 16, 2008 at 4:06 PM | PERMALINK

@doretta: David doesn't know what he's arguing. He just found opportunity to say something he thought might make him appear clever. If your expecting anything more than a sniping wise crack from him, don't hold your breath.

Posted by: c-b on November 16, 2008 at 4:09 PM | PERMALINK

Amusing how "David" overlooks "cutting spending"...

I see the right wing programming has worked well enough so that you leap at the sound of a buzzword or phrase.

Posted by: johnson on November 16, 2008 at 4:18 PM | PERMALINK

"to his left." nice.

Posted by: Skronk on November 16, 2008 at 4:26 PM | PERMALINK

Will is spouting the gospel of Amity Shlaes, the right wing writer whose recent book on the Depression and the New Deal has Herbert Hoover as its hero.

She's quoted in practically every screed by conservatives trying out revisionist history of the New Deal.

Posted by: Upper West on November 16, 2008 at 4:27 PM | PERMALINK

amity shlaes wrote a deeply dishonest and poorly written account of the New Deal and now she's peddling it for all its worth. from her perch at the CFR, she got to appear on Marketplace and Charlie Rose on Friday. ugh. i was frustrated that there was no response to her inane commentary on Marketplace, her appearance on Charlie Rose was hilarious as the economists on the panel kept either correcting her or just ignoring her. when krugman came up with that famous headline "the world is flat, others disagree", shlaes is the other. she keeps quoting Milton Friedman yet seems to understand little of what he wrote, and her comprehension of Keynes is minimal at best. a little knowledge is a dangerous thing...

Posted by: larrybob on November 16, 2008 at 4:52 PM | PERMALINK

Lot of talk in hindsight, so I add my two cents.

What exactly was FDR supposed to build in the way of infrastructure? Anybody guess?

Keynes did not say that government should just rake leaves until someone had an idea, Keynes claims that government should figure out what needs to be built, then build it during the downturn when labor is cheap.

So, here is the progressive quiz. If Keynes did not really believe that make work makes sense, but believed that downturns happen because the citizenry expects infrastructure, then what infrastructure needed?

I give you TVA and the Hoover dam. But what was the one thing that the federals were expected to do, but failed, and why did they fail?

What did Abe Lincoln want to use government for that got the South so upset?

Posted by: MattYoung on November 16, 2008 at 5:35 PM | PERMALINK

Reminds me of what I read on CNBC--

"Princeton Economist and New York Times columnist Paul Krugman has often been quoted for calling Republicans the Party of the Stupid. Krugman has been awarded this year’s Nobel Prize for Economics. The award recognises his analysis of trade patterns and locations of economic activity."

Republicans the Party of the Stupid

Posted by: consider wisely always on November 16, 2008 at 5:36 PM | PERMALINK

Conservatives have been getting away with this stuff for years. Remember "lowering the tax rate increases revenue"? "Diverting Social Security revenue to 'private accounts' will fix Social Security"? "The United States has the best healthcare system in the world"?

That it takes a Nobel winning, PhD in Economics to challenge some of the endless nonsense that's been spewed on these talking head shows since the time of Reagan is sobering. What sets Krugman apart from the rest of those clowns isn't just his intellect and knowledge -- it's that he's honest, has respect for the truth, and isn't afraid. If there were more people with those qualities allowed on TV, Will would have been put in his place (in the corner wearing a dunce cap) a long time ago.

Posted by: mg on November 16, 2008 at 5:53 PM | PERMALINK

Joshua Holland has a detailed essay 11/10/08 over at alternet.org that analyzes a good bit of data on the "center right" bloviating by media pundits:
Here's an excerpt:

"...Reality: an Election Day poll by the Center for American Progress and the Campaign for America's Future asked whether Republicans had lost because they were too conservative or not conservative enough. By a twenty point margin, voters chose “too conservative”, including independents who agreed by a 21 point margin. Seven out of ten said they wanted the Republicans to work with Obama and “help him achieve his plans,” while fewer than a quarter of respondents thought the GOP should try to keep him from implementing a progressive agenda..."

Posted by: consider wisely always on November 16, 2008 at 6:05 PM | PERMALINK

There was exactly one expert at that table, which is more than they usually have on the show.

I wonder what a real public affairs show would look like.

Posted by: Measure for Measure on November 16, 2008 at 6:55 PM | PERMALINK

Link to Firedoglake post:

http://campaignsilo.firedoglake.com/2008/11/16/krugman-schools-will-on-the-great-depression/

Posted by: Scarecrow on November 16, 2008 at 7:02 PM | PERMALINK

"Here's to all the Krugmans and the Maddows and the Robert Reichs and Thomas Friedmans and all those who actually have a grasp on history and economics and policy--AND can speak to it so cogently and forcefully."


There must be annother Thomas Friedman out there I don't know about.

Posted by: Mutaman on November 16, 2008 at 8:48 PM | PERMALINK

Thomas Friedman should commit hari kari and do the world a favor.

I summed up George Will in a comments thread a few weeks back. He wrote in his hideous baseball book that he believes that if an umpire makes a few wrong calls in his career, just like a judge Judge who makes a mistake in a court case, it's okay because it will eventually even out.

"I'm sorry mister, you got the death penalty and you were innocent. Don't worry, there's a guilty man walking free and living a productive life and helping out in his community. It all evens out in the end...."

Posted by: grinning cat on November 16, 2008 at 9:20 PM | PERMALINK

The anatomy of a put down...

low-tech cyclist @4:04:

He's got a reputation for being intelligent and erudite, but he's completely coasting on his laurels. If he were an unknown blogger, he'd stay unknown.

Mashing down on the pedals Ulrich-style with that one...

Posted by: koreyel on November 16, 2008 at 9:35 PM | PERMALINK

As a general rule, people should ignore conservatives when they mention the name FDR.

FTR, the economy had already gotten out of the depression by 1941. As Krugman points out there was a recession in 38 but that ended by the end of 39.

Posted by: flyerhawk on November 16, 2008 at 9:47 PM | PERMALINK

MattYoung, try to get the basic grasp of Keynesian economics as presented in any Econ 101 class before trying to criticize something you have no idea about:

From "The General Theory of Employment, Interest and Money."

"If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing."

http://www.marxists.org/reference/subject/economics/keynes/general-theory/ch10.htm

Keynes, said yes, gov't spending on public works would be better, but the main point is to get money pumping into the economy, at a time when private-sector spending has dried up.

Posted by: MikeN on November 16, 2008 at 11:34 PM | PERMALINK

The full 60 minutes President-elect Obama interview

Posted by: roschelle on November 16, 2008 at 11:41 PM | PERMALINK

Don't count on the talking heads to get to the truth about the economy or point out that a stupid Republican talkingt point is stupid. They all make millions and favor the Republican "cut taxes at all costs" programs.

Speaking of revisionism, my Dad, who is a good barometer of Republican propaganda, told me that Clinton's economy was good because he benefitted from Reagan's policies and Bush reaped the crashing economy from Clinton's policies. Wait for it!

Posted by: Always Hopeful on November 17, 2008 at 12:09 AM | PERMALINK

At a rough guess, the Republicans will want to head off any Democratic attempts at Keynesian economics. (You might have noticed that China has just started a Keynesian public works programme four-fifths the size of America's bank bailout programme; China has its priorities right.) At another rough guess, they may well succeed. You can say nice things about Krugman, but he is a Democrat and will ultimately do what he is told, even if he knows it is wrong.

I do not see any FDRs in the current Democratic Party. If I am wrong, mea culpa.

Posted by: MFB on November 17, 2008 at 9:21 AM | PERMALINK

"Do suppose Will really does believe that Krugman got the Nobel because of the committee's political preferences and not his work on trade? Or does Will really believe that what he knows about economics and economic history really would fill more than, say, two thimbles? Recall his WaPo column that adjusted the oil price for inflation and failed to do the same for stock indices."

Posted by: batavicus

Will has regular, syndicated, lucrative columns for ~30 years or more, where he could say whatever he liked. So long as that generally supported the elites, and this was what he liked anyway.

Back in 1980, he appeared as a talking head and proclaimed that Reagan had won a debate with Carter - a debate for which Will coached Reagan. Will acted as a neutral observer on TV.

That was his ethical level 30 years ago, and he's not gotten better since.

Posted by: Barry on November 17, 2008 at 9:49 AM | PERMALINK

As a favor to a conservative friend I am slogging my way through a right-leaning history of the New Deal called "The Forgotten Man" by a former Wall Street Journal reporter. Reading it, history always seems to repeat itself for conservatives whenever the Stock Market crashes. The free market must never, ever be implicated in these circumstances. It is always government's fault. Just as conservatives blame today's melt down on the Community Reinvestment Act of 1977, regular WSJ readers are convinced that the New Deal exacerbated, if not actually caused the Great Depression by scaring away investors and preventing the free market from working its magic. Conservatives also love to point out that it was World War II, and not the New Deal, that got us out of the Depression -- forgetting to mention that World War II was liberal Keynsian economics on steroids. I, too, was glad to see Krugman smack down Will on these points.

Posted by: Ted Frier on November 17, 2008 at 10:25 AM | PERMALINK
Speaking of revisionism, my Dad, who is a good barometer of Republican propaganda, told me that Clinton's economy was good because he benefitted from Reagan's policies and Bush reaped the crashing economy from Clinton's policies. Wait for it!

I remember during the Clinton administration the New York Post editorialized that the decline in overall drug use was a testament to the "Just Say No" policies of Reagan and Bush but that the slight increase in marijuana use was caused by... Bill "I didn't inhale" Clinton. Well played.

Posted by: Andrew on November 17, 2008 at 10:48 AM | PERMALINK

Krugman, of course, didn't have time for a full explanation, but FDR's premature belt tightening in 1937 was only half the cause of the 1938 downturn. The Fed doubled member bank reserve requirements at the same time due to (delusionary) inflation fears. That did more to kill lending and put a second dip in the drepression than anything else. Source:History of the Federal Reserve, by Allan Meltzer.

Posted by: Tim H on November 17, 2008 at 11:12 AM | PERMALINK

MikeN,

I so wanted to do the bottles story, but I was a day late. Excellent.

Posted by: kharris on November 17, 2008 at 1:14 PM | PERMALINK

I am amazed that anyone would comment on a subject that is not one's area of expertise when a highly regarded Nobel laureate in that subject is sitting next to you. It would be like me playing the cello at a party with Yo Yo Ma. Or like Sara Palin simply talking about anything. (I have such a crush on Krugman.)

Posted by: angelina on November 17, 2008 at 5:17 PM | PERMALINK

If one looks at the actual data it is easy to see that George Will is right on this one no matter what the cult of FDR may try to claim. In real terms investment was negative during the 1930s. This is not a surprise because FDR's intrusion in the economy squeezed out private investment and fear of confiscatory taxation made it difficult for people to take the chance of seeing investment returns get taken away by the government.

Posted by: Vangel on November 18, 2008 at 4:50 PM | PERMALINK

WHICH facts are you relying on, Mr. Vangel?

Keeping in mind that a president elected in 1932 (FDR) takes office in 1933:

GDP Growth?

No.

Stock Market?

Not so much.

Before we establish HOW FDR caused the depression to be prolonged, can we first prove that he, in fact, DID prolong the depression?

Last I checked, when the little line on graphs go UP, that's a good thing.

What has Rush O'Hannity taught YOU?
Maybe that would explain your disconnect with us lib'ruls.

There are tastier drinks to be had than Kool-Aid, friend. Try the micro-brew of truth once in a while. It's what adults like to drink.

Posted by: toowearyforoutrage on November 21, 2008 at 12:10 PM | PERMALINK




 

 

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