Krugman: "The Urge to Purge"
This column is the Nobel Laureate's detailed explanation of why David Stockman is wrong in what Krugman calls "a mammoth screed," the former Reagan Budget director's “The Great Deformation.”
Krugman begins by reminding us that when the Great Depression struck,
Krugman begins by reminding us that when the Great Depression struck,
When the Great Depression struck, many influential people argued that the government shouldn’t even try to limit the damage.Among these were Herbert Hoover's Secretary of the Treasury Andrew Mellon, whom he quotes as opining that the President
“Liquidate labor, liquidate stocks, liquidate the farmers. ... It will purge the rottenness out of the system.”He also quotes Joseph Schumpeter, and then writes
Like many economists, I used to quote these past luminaries with a certain smugness. After all, modern macroeconomics had shown how wrong they were, and we wouldn’t repeat the mistakes of