Krugman Spanks Will

Posted by jrosenhouse on November 18, 2008
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Have you ever seen George Will do his schtick on some chat show or other and then start wondering if maybe he’s just making stuff up? Wonder no more!

On This Week this past Sunday Will was on with New York Times columnist and Nobel Prize winner Paul Krugman. The following exchange took place:

GEORGE WILL: Sam, one of the ways we turned a depression into the Great Depression that didn’t end until the Japanese fleet appeared off Hawaii was that there were no rules and investors went on strike because the government was completely improvising. Net investment was negative through almost all of the ’30s because, again, people did not know the environment in which they were operating because the government had the fidgets and would not let rules and markets work.

PAUL KRUGMAN: This is not the way – okay. Well, it’s not the way I read the history. It’s not the way – no.

GEORGE WILL: Am I wrong about net investment?

SAM DONALDSON: Yes.

PAUL KRUGMAN: No, the negative net investment was because, you know, when you have 20% unemployment and all the factories are standing idle, who wants to build a new one? You don’t need to invoke the government to explain that. No, what actually happened was, you know, there was a collapse of the financial system, which was not restored for a long time. There was a persistent deep slump in consumer demand and, therefore, no investment demand and so you were stuck in this trap. Roosevelt got the economy moving somewhat. By 1937 things were a lot better than they were in 1933. Then he was persuaded to balance the budget or try to and he raised taxes and cut spending and the economy went back down again and then it took a enormous public works program known as World War II to bring the economy out of the depression.

Zing!

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Comments

  1. #1 Dave M
    November 18, 2008

    I like Hayek too, George, but not *everything* is an example of his point.

  2. #2 Tyler DiPietro
    November 19, 2008

    Will’s problem appears to be similar to that of other righties I’ve seen on this issue: they haven’t read the actual economic literature on The Great Depression, they’ve only read the right-wing think-tank revisionism that claims that FDR made it worse. He seemed genuinely unaware that an academic economist would be able to send up his nonsense.

    I’m glad Krugman was there.

  3. #3 John Farrell
    November 19, 2008

    Indeed. I’m in favor of labeling this intellectual pathology ‘death by a thousand think tanks’.

  4. #4 mufi
    November 19, 2008

    Yeah, I watched this exchange Sun. morning, along with Gov. Schwartzenegger’s attempt (foiled by his interviewer, George Stephanopoulos) to lay most of the blame for the current financial crisis on Fannie & Freddie. (See here and here for Krugman’s responses.)

    I suppose one could chalk up these unsubstantiated claims to the much-talked-about Republican identity crisis going on now after their embarrassment earlier this month, but I suspect that what’s changed is not so much their content as their tone, which is now sounding less sure of itself.

  5. #5 BaldApe
    November 19, 2008

    Just reinforces my perception that Republican ideologues will do something (cut taxes, cut workers wages, whatever) and when it clearly isn’t working, do more of it.

    30 years of Voodoo is more than enough. It failed guys, let people who know what they’re doing have a turn. (And yes, I know that Clinton was there in that 30 years too, but he was a “pro-business” Democrat, and didn’t undo much of the voodoo. My wages fell under his administration too.)

  6. #6 Rich Lawler
    November 19, 2008

    I remember distinctly George Will saying that “the Democrats will never again win a presidential in this country” after Bush had been re-elected to a second term. This was on “This week” back in 2004. I wonder where that clip is…

  7. #7 Troublesome Frog
    November 19, 2008

    I remember distinctly George Will saying that “the Democrats will never again win a presidential in this country” after Bush had been re-elected to a second term.

    I distinctly remember thinking that myself. I thought, “How could we possibly think that the first four years warranted another four? The only explanation is that this country has swung so far in the crazy direction that new rules apply.”

    Apparently, it is possible for people to be so dissatisfied with our messed up state of affairs that a Democratic candidate can win:

    1) with a relatively unspectacular margin
    2) against a candidate who represents the same policies everybody hates
    3) against a candidate who picked God’s gift to satirists as his VP
    4) only by turning out gobs of new voters

    I’m still not convinced that this represents a return to reason.

  8. #8 Jason Rosenhouse
    November 19, 2008

    Troublesome Frog -

    Well said!

  9. #9 Robert O'Brien
    November 25, 2008

    Will’s problem appears to be similar to that of other righties I’ve seen on this issue: they haven’t read the actual economic literature on The Great Depression, they’ve only read the right-wing think-tank revisionism that claims that FDR made it worse.

    Yes, if only they would read the hagiographies of FDR you’ve read.

  10. #10 D_E_R_M_A_N
    March 8, 2009

    THANKS