1938 in 2010? Yup. Drawing the wrong conclusion on the economy ... again

Updated on Monday, September 6, 2010 at 22:06 by mavenandmeddler

I’ve  been saying it. Every reputable economist has been saying it*. The history books say it. Prize winning economist Paul Krugman says it best. When will the rest of America start learning from history?

And, well … they could start drawing some more accurate characterisations of the problems - and conclusions -  rather than engaging in the usual hand wringing over (take your pick):

1- Mind numbingly repetitive widget assembly jobs having moved overseas.

2- The lack of sufficient tariffs to block cheaper foreign products ( which would, BTW, hurt American workers and consumers in a back handed way).

3- Deficits. DEFICITS!! (See my posts about deficits and read below - ‘verse’ 10).

4- Guvmint ain’t any good ‘cause Obama is a Commie Kenyan.

Realizing that this isn’t business as usual, and supporting - insisting! - that Obama take bold action ala FDR, we might see a recovery vis a vis the following (take your pick):

1- Several large - as in freaking MASSIVE - scale public works/infrastructure projects like a national power grid, high speed rail that covers the nation, a new education initiative to make American students the envy of all modern industrialized nations in math and science rather than creationism. I also recommend putting a very short delivery time on these projects - rather like a war time urgency. Don’t give the TeaNuts time to re-frame it as a Commie plot.

2- Put the top tier of tax rates right back where they were during the Eisenhower administration - or, failing that, where they were 10 years ago.

3- Put in place a very, VERY large scale government reconstruction spending plan that will send the GOP and TeaNuts into such a tizzy that they hyper-ventilate and collapse, leaving us free to rebuild the country.

4- Campaign finance reform. Now. Draconian.  Pure and simple. This empties out ‘K’ Street.

By Paul Krugman, The New York Times

Here’s the situation: The US 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.

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