Yesterday, Paul Krugman conducted the kind of mendacious attack he's always accusing others of doing. Far be it for me to disagree with a Nobel Prize winning economist (he surely has forgotten more about economics than I'll ever know) but let me take a crack at it anyway. First, Krugman too often demonizes people who don't share his opinions and he does so again here when he writes about those who think Roosevelt was not so successful in fighting the Great Depression as he is given credit for: "most of what you hear along those lines is based on deliberate misrepresentation of the facts." That's a bunch of crap.

Most of those people who are saying Roosevelt made the depression worse are doing so because they believe it not because they are purposefully lying. Either Krugman knows this and just wants to make the other side look evil or he doesn't know this which means he is an ignorant fool.
And, most of those who believe Roosevelt made things worse are saying so because of his intrusions into the private sector and creating a climate of uncertainty for business, not because Roosevelt created a fiscal stimulus. Amity Shlaes recent book, The Forgotten Man, in part argues this. At least Krugman gets right that Hoover was not conservative (if that word has any meaning nowadays) in his approach to tackling the Great Depression. Hoover raised taxes, demonized businesses and created huge new federal programs, not to mention he didn't veto Smoot-Hawley.

One interesting thing about the Great Depression is that 70 years later economists are still arguing about what caused it and what got us out of it. This is an important lesson for today's crisis--your kids and grandkids are likely to be reading books (that will be purely digital and not in print, btw) about origins and causes of today's financial crisis. Krugman talks about "the definitive study of fiscal policy in the 30's". What he really means is that it was the study that best comports to his reading of the depression.

Third, I don't think it is at all clear that the causes of today's financial crisis are equivalent to the causes of the Great Depression. In fact, I think, they may be very different causes, with the caveat that no one really understand completely what is going on today. There certainly was no lack of economic stimulus leading up to today's credit crisis. State, local and federal governments have been increasing spending at a rapid clip for years. The federal government ran up large deficits which are now becoming historically large. Governments at every level have borrowed from the future to pay for goodies today. The federal government literally borrowed (the deficit and national debt), local and state governments have done so through inadequately funding pensions and in other ways. In other words, we have sustained our lifestyles by asking those not yet born to pay for it.

Now, the solution Krugman and others advocate is to do more of the same. Maybe their rampant Keynesian will work. Or maybe it will make things worse. I do agree that we need to rebuild and build new infrastructure in the U.S. If I were in charge, that's where I'd direct government spending, not as a stimulus (which it isn't) but as a necessity. Of course, at the same time I'd cut spending elsewhere, including by reducing our military commitments. But, to follow Krugman's thinking (he argues that World War II caused the end of the depression), maybe the best way out of our current economic mess is to declare war on either China, Russia, or both. In which case you parents out there may want to send your children to Canada pronto.