Thursday, September 09, 2010

Don't know much about historee

Paul Krugman, who won a Nobel prize in economics, has just shown us why students need a broad liberal education--one that includes some courses in history. In an op-ed for the NYT, Mr. Krugman explains why we must throw more trillions of dollars after the stimulus programs that got us to our present dismal situation: it worked so well in 1938!

Here’s the situation: The U.S. economy has been crippled by a financial crisis. The president’s policies have limited the damage, but they were too cautious, and unemployment remains disastrously high. More action is clearly needed. Yet the public has soured on government activism, and seems poised to deal Democrats a severe defeat in the midterm elections. 

The president in question is Franklin Delano Roosevelt; the year is 1938. Within a few years, of course, the Great Depression was over. But it’s both instructive and discouraging to look at the state of America circa 1938 — instructive because the nature of the recovery that followed refutes the arguments dominating today’s public debate, discouraging because it’s hard to see anything like the miracle of the 1940s happening again.
The "recovery that followed" the 1938 election is better known to history as World War II. It wasn't Franklin Roosevelt but Adolf Hitler who ended the Great Depression, by sending the Germany army and air force into Poland. Fearing for their own safety, Britain and France began to buy war materiel from the United States. American factories began to hum again, and in 1940 the draft began to take unemployed young men off the streets. Will that miracle happen again? Doesn't seem at all likely. Blue skies! -- Dan Ford



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