Krugman on "Weaponized Keynesianism"

Here is the key bit from a post by Paul Krugman on his NY Times blog:

And the evidence clearly shows that weaponized Keynesianism works – which means that Keynesianism in general works.

So why do politicians and their hired economic propagandists say differently? On reflection, I think it’s a bit more complicated than I suggested in my previous post on this topic, because there’s a strong element of cynicism as well as genuine intellectual confusion.

What kind of cynicism am I talking about? First, there’s the general fear on the part of conservatives that if you admit that the government can do anything useful other than fighting wars, you open the door to do-gooding in general; that explains why conservatives have always seen Keynesianism as a dangerous leftist doctrine even though that makes no sense in terms of the theory’s actual content. On top of that there’s the Kalecki point that admitting that the government can create jobs undermines demands that policies be framed to cater to all-important business confidence.

That said, there’s also the Keynes/coalmines point: there’s a strong tendency to take any spending that looks like a business proposition – building bridges or tunnels, supporting solar energy or mass transit – and demanding that it appear to be a sound investment in terms of its financial return. This makes most such spending look bad, since almost by definition a depressed economy is one in which businesses aren’t seeing good reasons to invest. Defense gets exempted because nobody expects bombs to be a good business proposition.

The moral here should be that spending to promote employment in a depressed economy should not be viewed as something that has to generate a good financial return; in effect, most of the resources being used are in reality free.

I wonder if we’ll ever have a political system mature enough to understand this.

The political right in the US has gone beyond simply proposing bad policies, it is actively destroying the country. That people vote for a political party whose agenda is to destroy the country seems unreal, but that's exactly what the Germans did in 1932 when they voted the Nazis into a plurality position. The average German voting for the Nazi party obviously didn't think it was a vote for six years of war and the utter destruction of his country, but in effect that was the political effect of his vote. Similarly Americans who vote for the Republican party may not think they are voting for the destruction of their country, but in effect their votes enable political radicals to take obstructionists positions that are literally destroying the US.

The current Republican party is to the right of McCarthyism and the 1960s John Birch Society. It is a party of fanatics and radicals intent on destroying America. Sadly, the electorate is unable to think through the political confetti on offer by that party and see the reality behind it. Similarly the Germans didn't see through the strong "nationalist" ranting of the Nazis to realize they were electing a government intent on absolutely destroying their country, a party capable of crimes against humanity of unspeakable dimensions and a party whose leader who would demand, as he prepared for his own suicide, that Germans "fight to the last man" and utterly, utterly destroy their country in an insane war for a political party that was corrupt and vicious and determined to go down in bloody defeat. A political party completely unwilling to compromise with political rivals and intent on policies that superficially called for "the greater good of Germany" but which, by attacking all of its neighbors, was singularly intent on committing political suicide.

But the German people voted in that party.

And the Americans have learned nothing from history.