Krugman: 'GOP Wants to Build Bridge to 19th Century' - By Trying to Prevent Inflation?

Former House Majority Leader Dick Armey said Monday that MSNBC's Chris Matthews is slipping out of touch with reality.

After reading New York Times columnist Paul Krugman's idiotic piece Friday, I think the same can be said of him:

We’ve always known that the modern G.O.P. wants to take America back to the way it was before the New Deal; but now it’s clear that the party wants to build a bridge to the 19th century, and maybe even to the antebellum era.

For those not familiar with the term, the Antebellum Era in American history is pre-Civil War. Why does Krugman believe that's what Republicans want to return to?

Because fiscally-minded conservatives such as Rep. Paul Ryan (R-Wisc) are concerned that the explosion in spending and debt in the past few years as well as in the foreseeable future are going to devalue the dollar and lead to serious inflation.

Trying to dispel this notion, Krugman observed that this isn't a problem yet. Inflation by most measures remains tame largely because of the struggling economy.

But leading indicators such as gold and silver are screaming with the former having risen from roughly $900 per ounce three years ago to over $1400 just last month, and the latter going from $16 to $30 in the same period.

Does this mean inflation's on the way? Not necessarily, but Krugman in his piece demonstrated an inconsistency on this issue:

The dollar’s value in terms of other major currencies is about the same now as it was three years ago.

For the most part, he's right. However, three years ago with the dollar basically at the same level it is today, and maybe most importantly a Republican in the White House, Krugman was quite concerned about inflation. Here's what he wrote on November 26, 2007:

“Americans’ Economic Pessimism Reaches Record High.” That’s the headline on a recent Gallup report, which shows a nation deeply unhappy with the state of the economy. Right now, “27% of Americans rate current economic conditions as either ‘excellent’ or ‘good,’ while 44% say they are ‘only fair’ and 28% say they are poor.” Moreover, “an extraordinary 78% of Americans now say the economy is getting worse, while a scant 13% say it is getting better.”

What’s really remarkable about this dismal outlook is that the economy isn’t (yet?) in recession, and consumers haven’t yet felt the full effects of $98 oil (wait until they see this winter’s heating bills) or the plunging dollar, which will raise the prices of imported goods. [...]

Today, by contrast, wage gains for most workers are being swallowed by inflation. In fact, the reality for lower- and middle-income workers may be worse than the official statistics say, because the prices of necessities like food, transportation and medical care are rising considerably faster than the Consumer Price Index as a whole. One striking statistic: the cost of a traditional Thanksgiving turkey dinner was 11 percent higher this year than last year.

So, roughly three years ago, with the dollar at virtually the same level as it is today, Krugman was very concerned about inflation.

Now, with Obama in the White House, and the total outstanding debt having risen by $5 trillion or 56 percent since Krugman wrote that piece in 2007, he is not only not concerned about inflation, but wants the federal government to spend even more money and create even more debt.

Interesting hypocrisy, wouldn't you agree?

So too is that just four days ago, Krugman claimed that soaring food prices caused by global warming were to blame for the political crisis in Egypt.

Again, in fairness, he said such commodity inflation is yet to hit America, but commodity prices are indeed on the rise in America with the Commodity Research Bureau index now back above its pre-2008 financial crisis peak.

With this in mind, are Republicans like Ryan building a bridge to the 19th century or wisely trying to stop the construction of one to 1970s hyperinflation?

One gets the feeling that if Ryan was a Democrat and Obama a Republican, Krugman would choose the latter?

Wages & Prices Stimulus Oil & Gas Prices Budget Bailouts Economy New York Times Paul Ryan
Noel Sheppard's picture

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