Leave a Comment

Recreating a Depression Government?
QandO — ... spending and b) the plan, apparently, is to again strengthen the union hand (card check) which would give unions more power over wages, thus setting up the same sort of atmosphere which existed in the ’30s. Thus the same sort of economic foolishness that kept us from recovering from the Depression in the ’30s may very well be recreated within the next year and slow any chance of a quick recovery from what presently ails us down dramatically. Read Shales article here. There’s a good interview with her here as well.

Relative Price Adjustments and Aggregate Demand (by Don Boudreaux)
Cafe Hayek — ... Amity Shlaes in today's Wall Street Journal does a great job explaining some faulty reasoning of those who insist that the problem with economic downturns is inadequate aggregate demand. ...

Krugman's Recipe for Another Depression: Spend
CARPE DIEM — ... ~"The Krugman Recipe for Depression: Massive government spending is no solution to unemployment," by Amity Shales in today's WSJ

Krugman vs. Shlaes–Not A Fair Fight
The Big Picture — ... All of that sets up today’s Wall Street Journal Opinion piece where Shlaes is still stinging from Krugman’s rebuke. And she continues to flail around for a reason to oppose a stimulus plan that all sides agree must be focused on creating jobs and spurring private sector spending: ...

Week In Review
Stefan Karlsson's blog — ... -Amity Shlaes argues in a good way against the economic agenda of Paul Krugman and Barack Obama, as well as Krugman's interpretation of the 1930s, although the essay also contains a misleading assertion about the evils of deflation. ...

Changes in money-wages and Amity Shlaes
Paul Krugman — Not much point in going through Amity Shlaes’s latest : after having inadvertently revealed that she has no idea what Keynesian economics is, she’s back on the warpath against FDR, and me. The main line of empirical argument seems to be that FDR didn’t succeed in ending the Great Depression. Since that’s also what my side of the debate says — fiscal expansion was too cautious, and disastrously abandoned in 1937 — I don’t see what this is supposed to prove. But I think it’s worth pointing out why Ms. Shlaes thinks the New Deal was destructive of employment: ...

Wall Street Journal and Council on Foreign Relations Crashed-and-Burned Watch (Yet Another Amity Shlaes Edition)
Grasping Reality with Both Hands — ... The Krugman Recipe for Depression: Paul Krugman['s]... new book "The Return of Depression Economics," emphasizes the importance of New Deal-style spending. He has said the trouble with the New Deal was that it didn't spend enough.... The New Deal is Mr. Obama's context.... If he proposes FDR-style recovery programs, then it is useful to establish whether those original programs actually brought recovery.... New Deal spending provided jobs but did not get the country back to where it was before.... ...

New Deal Economics: George Will Trumps Amity Shlaes for Stupidity
EconoSpeak — Paul Krugman has busy keeping up with the nonsense from Amity Shlaes and George Will so we should forgive him for not covering every point. I was going to let the following Schlaes line go even if this graph shows that total government spending and revenues did not significantly rise as a share of GDP during FDR’s first two terms: New Dealers raised taxes again and again to fund spending. But then Will had to compound the nonsense with: But people whose recipe for recovery today is ...

Krugman On Wage Cuts In A Depression
Stefan Karlsson's blog — Paul Krugman has responded to the article by Amity Shlaes that I told you about in my previous post. More specifically, he focuses his attack on the idea that a lower price of a certain thing will lower excess surpluses of it. Even more specifically, I refer to of course wage cuts as a way to reduce unemployment. Krugman argues that if there were a general 20% of wages for all workers, then prices would go down by 20% too, which would leave real wages unchanged. There are several fallacies here. First of all, why assume a across the board cut equal ...