Everyone knows how much Keynesian economist Paul Krugman wants the government and the Federal Reserve to intervene into every single matter. Everything from fighting space aliens to creating housing bubbles, Krugman has regularly demanded Washington to spend more money in order to “end this depression now,” even when it already is spending trillions of dollars on welfare, war and waste.
Since the economic collapse, Krugman has urged President Barack Obama to be more aggressive in his stimulus efforts. One area in particular that the 21st Keynesian icon has wanted Obama to pour money into has been infrastructure. Krugman, and others like him, have encouraged the federal government to recreate the 1930s and adopt many of the same infrastructure projects like FDR.
Although it is a fallacy that the U.S. needs to spend money on infrastructure, it is a premise that is widely accepted. It is also accepted by President-Elect Donald Trump, who hasn’t been shy of government spending.
On the campaign trail, Trump has pledged to spend $1 trillion on infrastructure. Trump will be spending enormous sums of money on highways, roads, bridges, inner cities, streets and so on. According to his chief strategist, Steve Bannon, the next four years will be similar to the 1930s when it comes to government-led stimulus projects (SEE: Will the next four years of Trump be like the 1930s?).
Despite chastizing Trump during the last 18 months, the question being floated around is: can Krugman endorse Trump’s initiative? Let’s face it: Krugman has called for something like this for the last eight years and now he is finally getting it. But it seems like he still isn’t happy (that’s more along the lines of partisanship than intellectual consistency).
The exact details of Trump’s fiscal plans have yet to be fully released, but Krugman is already accusing his ideas of being a scam and a failure.
“True, handing out windfalls to rich people and companies that will probably sit on a lot of the money is a bad, low-bang-for-the-buck way to boost the economy, and I have my doubts about whether the promised surge in infrastructure spending will really happen. But an accidental, badly designed stimulus would still, in the short run, be better than no stimulus at all,” he wrote in a recent column.
“[I]n the longer run Trumpism will be a very bad thing for the economy, in a couple of ways. For one thing, even if we don’t face a recession right now, stuff happens, and a lot depends on the effectiveness of the policy response. Yet we’re about to see a major degradation in both the quality and the independence of public servants. If we face a new economic crisis — perhaps as a result of the dismantling of financial reform — it’s hard to think of people less prepared to deal with it.”
Remember, Republicans don’t seem to be taking the national debt and budget deficits seriously anymore. They pretended to care about these things during the Obama years, but now it’s on the backburner. Trump has gone full Keynes and this should please both Krugman and everyone on the left (SEE: Trump Goes Keynesian: Keynes Would Have Loved Trump’s Economic Plan).
Ultimately, Krugman is getting everything he wants for at least the next two to four years: politicians not caring about the deficit, trillions of dollars worth of stimulus spending, a president who now appears to be indifferent to the $20 trillion national debt and someone who likes low interest rates.
He may now rail against these Keynesian policies because they’re being led by someone with an R next to their names instead of a D. Anyone who has followed Krugman’s columns over the years and doesn’t believe his drivel should point and chuckle because it’s possible he’ll begin to backtrack on and contradict what he has written as he has done so many times before.
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