Whenever I’m at a loss for blog material, I can just check out the latest Krugman column. This Sunday’s pleasure was entitled “1938 in 2010,” and I’ll just quote the silliest bit:
From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise… But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity.
But the GDP figures during World War II were essentially made up, being based substantially on administratively determined “prices.” It turns out that Americans’ living standards were at best flat during the war (and that’s not counting the soldiers, of course). Someone, please let Dr. Krugman know about Robert Higgs’ research (here and here).
UPDATE: The myth of World War 2’s economic benefits is of course bipartisan, as evidenced in today’s vituperative post on rightist site Redstate.com.
4 thoughts on “Paul Krugman: Bring Back the Early ’40s (updated)”
Please not Robert Higgs. You don’t have any other evidence on the menu? Any libertarian short of a real argument can savely resort to Higgs. This is sooo boring.
What’s wrong with the Higgs stuff? It’s peer-reviewed, appearing in mainstream journals. I searched & could find no one disputing his core claim.
Higgs is peer-reviewed? Where? All his stuff is published in his vanity web site. What has he published in any reputable journal of economics?
Journal of Economic History for one:
He’s also published in the AER, the top economics journal in the world, and I’m sure his university press books are also peer-reviewed.