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Krugman, Keynes and Hitler

In the 1930s, Hitler was widely viewed as just another protectionist central planner who recognized the supposed failure of the free market and the need for nationally guided economic development. Proto-Keynesian socialist economist Joan Robinson wrote that "Hitler found a cure against unemployment before Keynes was finished explaining it."

What were those economic policies? He suspended the gold standard, embarked on huge public works programs like Autobahns, protected industry from foreign competition, expanded credit, instituted jobs programs, bullied the private sector on prices and production decisions, vastly expanded the military, enforced capital controls, instituted family planning, penalized smoking, brought about national health care and unemployment insurance, imposed education standards, and eventually ran huge deficits. The Nazi interventionist program was essential to the regime's rejection of the market economy and its embrace of socialism in one country.

Such programs remain widely praised today, even given their failures. They are features of every "capitalist" democracy. Keynes himself admired the Nazi economic program, writing in the foreword to the German edition to the General Theory: "[T]he theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of production and distribution of a given output produced under the conditions of free competition and a large measure of laissez-faire."

Keynes's comment, which may shock many, did not come out of the blue. Hitler's economists rejected laissez-faire, and admired Keynes, even foreshadowing him in many ways. Similarly, the Keynesians admired Hitler (see George Garvy, "Keynes and the Economic Activists of Pre-Hitler Germany," The Journal of Political Economy, Volume 83, Issue 2, April 1975, pp. 391—405).

by Anonymousreply 1603/08/2013

Krugman: Gold Obsession Was the Proximate Cause of Hitler Coming to Power

Krugman writes: No, the 1923 hyperinflation didn’t bring Hitler to power; it was the Brüning deflation and depression. Hard money and a gold standard obsession, not excessive money printing, was the proximate disaster.

Note to Paulie: They don't call it a business cycle for nothing. The hyperinflation brought on the depression. What would you have liked to have seen, even more money printing? In 1923, the hyperinflation was raging. Often prices doubled in a few hours. By mid-1923 workers were being paid as often as three times a day. By late 1923 it took 200 billion marks buy a loaf of bread.

July 1914t 1.0

Jan 1919t 2.6

July 1919t 3.4

Jan 1920t 12.6

Jan 1921t 14.4

July 1921t 14.3

Jan 1922t 36.7

July 1922t 100.6

Jan 1923t 2,785.0

July 1923t 194,000.0

Nov 1923t 726,000,000,000.0

Do you think the German people might have been justified in wanting a gold standard?

To link the gold standard in anyway as a proximate cause of the rise of Hitler when many complex factors were in play between 1923 and 1933 is complete fraud.

When Henreich Brüning assumed power as German Chancellor in 1930, he didn't help things at all for many reasons. He took significant interventionist steps including raising taxes and issuing a decree that all wages should be rolled back to what they had been in 1927. Not surprisingly unemployment soared. To be sure the mark was mispriced relative to the dollar and that was a problem, but to present in simplistic fashion what went on as being the result of Germany being on the gold standard is just absurd. In fact in 1931, Brüning took Germany off the gold standard, which resulted in a new round of inflation.

Brüning was a nut job. Some historians believe that Brüning through his wage decrees was attempting to weaken the powerful German trade unions and the Social Democratic Party through continuing mass unemployment so that he could roll back the democratic political system of Weimar and go back to the authoritarian state of pre-war times. Brüning gave credence to this in his memoirs, in which he admitted to having hoped to bring back the kaiser

by Anonymousreply 102/12/2013

You left out the part where the German industrialists bankrolled the Nazi party to keep the workers in their place. And the fact that the Nazi's first order of business was to declare all unions except their DAF illegal. Don't even try to give the "Free MArket Capitalists" a pass on what went on in Germany.

by Anonymousreply 202/12/2013

Today's Batshit Crazy Libertarian Spew is brought to you by Mort's Discount Gold Emporium. Sell us your gold - or else!

by Anonymousreply 302/12/2013

[quote]bullied the private sector on prices and production decisions,

=

Confiscated factories and sent the Jewish owners off to death camps.

by Anonymousreply 402/12/2013

Oh Mel -- your father already told us what happened to the Jewish people.

Remember? They moved.

by Anonymousreply 502/12/2013

I see our resident libertarian nutcase has finally figured out how to clear his cookies. I also see that he's just as clueless as ever, just as funny as ever, and is even better at getting his spam threads closed. Too funny.

by Anonymousreply 602/13/2013

If someone like Scarborough can destroy Krugman, no wonder he refuses to debate Bob Murphy.

----

Krugman posted-

Well, we’ll see how it comes out after editing, but I feel that I just had my Denver debate moment: I was tired, cranky, and unready for the blizzard of misleading factoids and diversionary stuff (In 1997 you said that the aging population was a big problem! When Social Security was founded life expectancy was only 62!) Oh, and I wasn’t prepared for Joe Scarborough’s slipperiness about what he actually advocates (he’s for more spending in the near term? Who knew?)

-------

What really came out in the debate is that Joe Scarborough is as Keynesian as Paul Krugman.

At one point, Scarborough said he'd be willing to provide up to $200 billion in infrastructure spending. He also tried to make the point that he was not worried about short-term deficits, but rather long-term debt. His one area of concern seemed to be medicare and social security, but even on this point he didn't understand the issue correctly. He seemed to think the SS problem is at least a decade down the road, when the SS fund is already cash flow negative and will be seriously so within just a couple of years.

Scarborough maintained a Keynesian macro framework right into his closing remarks, which implied there is a role for government in "growing" the economy:

We can grow the economy in the short run, we can also do what's responsible for our children and for our grandchildren, which is be concerned about the long-term debt. That seems pretty damn rational to me.

There are many ways to prick holes in Krugman's argument, but Scarborough didn't come close.

by Anonymousreply 703/05/2013

The point however- which history has prove to be true is that a thriving economy could very well take care of the deficit and when times are good is when to make the cuts. That's how you resolve long term debt.

The problem with this however is that it also levels out the disparity between rich, middle class and the poor. The rich can still be rich- just not as wealthy as there are now woth their tax cuts and loopholes.

by Anonymousreply 803/05/2013

What is the point of this thread anyway??

by Anonymousreply 903/05/2013

"when times are good is when to make the cuts"

This may possibly be true, r8, but which electorate would vote for a political party or candidate saying we need to make cuts in the good times?

by Anonymousreply 1003/05/2013

Laissez Fairy strikes again.

by Anonymousreply 1103/05/2013

It would seem obvious that when the economy is doing well there would be almost automatic cuts in unemployment, welfare and other social services because people don't need them.

by Anonymousreply 1203/05/2013

So, when the economy goes bad there would be automatic rises in unemployment, welfare and other social services because people need them. In which case, saying "when times are good is when to make the cuts" is meaningless because those cuts don't last beyond the good times, when expenditure on those items in fact rises.

The actual cuts that some argue need to be made, at least in the case of Europe which has very different public spending from the US, are more related to things like raising the age at which a full pension can be taken (no more retiring at 53 on a full public pension), reducing pensions, charging university tuition fees, closing down or merging certain departments or services, restricting the duration for which certain benefits can be claimed, reducing the level of benefits, cutting arts budgets, sports budgets, laying off excess public sector staff, that kind of thing. I can really see governments saying, "hey, voters, we're having good times now, let's make some public spending cuts!"

by Anonymousreply 1303/05/2013

[quote]If someone like Scarborough can destroy Krugman, no wonder he refuses to debate Bob Murphy.

Sure, now if that had actually happened, you'd have a point. Sadly for you, it didn't. And you don't. You really should join us in the real world someday. You might even like it here.

[quote]There are many ways to prick holes in Krugman's argument, but Scarborough didn't come close.

And yet this post didn't come up with a single "hole prick" in Krugman's argument, despite the "many ways" to do so. Funny how that works.

by Anonymousreply 1403/05/2013

R14-

If Krugman is right, why won't he debate Bob Murphy?

Murphy has raised $60,000 for NYC food banks that will be donated once Krugman agrees to a debate. I'm sure that once he agrees to the debate the amount will go way over $100K.

If Krugman is so sure he is right, why won't he do this for charity?

by Anonymousreply 1503/07/2013

[quote]If Krugman is right, why won't he debate Bob Murphy?

Because Murphy is an ignorant troll and giving an ignorant troll a national platform would be stupid. We've been through this before; this isn't exactly rocket science.

It really is funny: you start these threads over and over and over again and all you do is demonstrate just how little you know about economics, about Krugman, and about Keynesian economic theory. And, ultimately, the webmaster deletes or locks your threads because he gets tired of your spamming, at which point you start whining about how picked on you are.

by Anonymousreply 1603/08/2013
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