“Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” That, according to Herbert Hoover, was the advice he received from Andrew Mellon, the Treasury secretary, as America plunged into depression. To be fair, there’s some question about whether Mellon actually said that; all we have is Hoover’s version, written many years later.I love to read Krugman because he so beautifully shows how the idiot Republicans raise themselves on their own petard.
But one thing is clear: Mellon-style liquidationism is now the official doctrine of the G.O.P.
Two weeks ago, Republican staff at the Congressional Joint Economic Committee released a report, “Spend Less, Owe Less, Grow the Economy,” that argued that slashing government spending and employment in the face of a deeply depressed economy would actually create jobs. In part, they invoked the aid of the confidence fairy; more on that in a minute. But the leading argument was pure Mellon.
Here’s the report’s explanation of how layoffs would create jobs: “A smaller government work force increases the available supply of educated, skilled workers for private firms, thus lowering labor costs.” Dropping the euphemisms, what this says is that by increasing unemployment, particularly of “educated, skilled workers” — in case you’re wondering, that mainly means schoolteachers — we can drive down wages, which would encourage hiring.
There is, if you think about it, an immediate logical problem here: Republicans are saying that job destruction leads to lower wages, which leads to job creation. But won’t this job creation lead to higher wages, which leads to job destruction, which leads to ...? I need some aspirin.
Go read the rest of Krugman's article to find more entertainment.
The sad fact is that a very large minority of Americans believe the crap that the Republicans put out. These are the same people who gawk at the rich and admire them even when they are shown to be baby stranglers and mother killers. The awe of "all that money" is the only validation they need to know that these are "special people". Willie Sutton got rich robbing banks getting more than $2 million in 1931 dollars (roughly $200 million in today's dollars). He wasn't a nice guy, but he had a "following" that loved to be regaled with stories of his crimes. Al Capone was a popular "hero". People loved the exploits of Bonny and Clyde. Bizarre. These are not people you want to live near of have dealings with.
We live in strange times when good is in hiding and evil swaggers down Main Street claiming virtues it never had and never will have.
Here's a bit from Krugman's close to his article:
Republicans are now fully committed to the doctrine that we must destroy employment in order to save it.Pathetic.
And Democrats are offering little pushback. The White House, in particular, has effectively surrendered in the war of ideas; it no longer even tries to make the case against sharp spending cuts in the face of high unemployment.
So that’s the state of policy debate in the world’s greatest nation: one party has embraced 80-year-old economic fallacies, while the other has lost the will to fight. And American families will pay the price.