Paul vs. Paul: The Monetary Policy Cagematch

This is great. Now, correct me if I’m wrong – and I could be wrong – but here are Krugman’s two main responses to Paul, and really, anybody challenging Keynesianism:

1.       “You want to go back 150 years! We can’t do that.”

2.       “Look at the 50’s! Weren’t they awesome?”

To point 1 – that’s factually wrong, I think Ron Paul would ideally go back to 1912, before we had a Federal Reserve, but he admits that even in his book End the Fed, he (spoiler alert!) does not suggest actually ending the Federal Reserve because it would cause chaos. But that aside, “you want to go back 150 years” is not actually an argument, and it is especially not one when you then almost immediately opine to have things the way they were 65 years ago. What is the magic age where we can acceptably attack examples merely based on how old they are? Apparently, it is somewhere between 66 and 99 years.

To point 2 – as Rep. Paul correctly points out, the economic prosperity of the 1950s was due to breaking the state controls on the economy that were in place throughout World War II. New Dealers looked at the employment landscape (there was almost no unemployment – silver lining to the cloud of drafting most men of service age, I guess), saw a literal army (and navy) of men returning home and thought there would need to be additional constraints placed on the market to ensure that those men had jobs. But that didn’t happen. Businesses were unshackled from their wartime arrangements, grew rapidly, and we enjoyed crazy prosperity even though we were actually importing unemployed people from Europe and Asia. This is because the pie got bigger. For Krugman to look at this time period and say “Hey, look at that mild inflation and middle class prosperity, score one for my side,” is dishonest. When faced with a decision of “more intervention or less” the government chose “less,” a position I cannot realistically see Krugman advocating today.

Can we take a time out and give Bloomberg a high five? That is what, ideally, cable television could be – longform discussions of the pressing issues of the day, featuring people expressing differing points of view in a straightforward, non-shouty way (it should be noted, I’m saying this as someone who vehemently disagrees with most things that come out of Paul Krugman’s mouth or keyboard – I’m sure some of you reading this feel the same way about Rep. Paul; nevertheless, was that not totally watchable? See? Echo chamber not necessary!). Unfortunately, I can’t imagine that segment airing on any other cable station (I won’t even mention the networks). Then they doubled down and got some excellent tweets that included real substance and had Krugman respond to them! It’s what cable news could be but almost never is.

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