By Robert Tracinski - from RealClearMarkets.com
The debt deal unhinged the left.
No, the Tea Parties did not win, as the left has been saying. The spending "cuts" only limit the additional growth of government, and they are too small and too distant to be worth celebrating. But the left is correct about one thing: they lost, because the debt deal established the idea that there would be no more tax increases and no big new spending programs. And the left does not exactly have a record of being gracious political losers.
As usual, no one was more unhinged than Paul Krugman. To be sure, his New York Timescolleague Joe Nocera established a new apex of civil political discourse when hedenounced Republicans as jihadist terrorists. But that's just a lot of angry venting and empty invective. By contrast, Krugman brings to this debate a peculiar kind of madness. What was really unhinged was the substance of his response, the solution that he thinks the nation needs to follow.
In a blistering column, Krugman lashed out at the Obama administration, declaring that "we are not now and have never been on the road to recovery" and that "the economic policy of the past two years" "isn't working."
Yet he was attacking Obama, not for pushing through too much "stimulus" spending, nor for printing too much money, nor for piling up too much debt--but for doing too little of these things. He argues for an even bigger stimulus, for government to "support the economy in its time of need" and to be the sole source of growth. He snarls: where else is growth going to come from? And yes, for him, that's supposed to be a rhetorical question.
This is not, by itself, Krugman's peculiar madness. The peculiar madness of Paul Krugman is that he presents all of this as if it were sensible and self-evidently true and requires no argument. He presents it as if the only thing preventing others from seeing the truth is blind political obstructionism (for the Republicans) or cowardice (for the Democrats).
The insanity comes from the context in which Krugman was writing. He was responding, not just to the debt deal, but to Thursday's sharp correction in the stock market. The correction capped off a week of bad economic news and was widely seen as pricing into the market the looming prospect of a double dip recession. The big conclusion everyone has been drawing from this is precisely the failure of government stimulus, both the public-works fiscal stimulus Krugman is talking about, and the money-printing monetary stimulus of "quantitative easing."
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