Think Freely Media presents Common Sense with Paul Jacob

Some people love spending so much they’d kill to do it.

A while back, Paul Krugman, today’s leading Keynesian shill, trotted out the old chestnut that World War II brought America out of the Great Depression. In The Freeman: Ideas on Liberty, Steve Horwitz provides a concise, reasoned response:

Wealth increases when people are able to engage in exchanges they believe will be mutually beneficial. The production of new goods that consumers wish to purchase is the beginning of this process.

And borrowing from future generations to spend on goods not connected “to the desires of consumers, but rather to the desire of the politically powerful” doesn’t work.

Krugman talks war not because he wants one, but because he thinks government spending is so important that he’ll take what he can get, “even if the spending isn’t particularly wise.”

He misses the point.

The malaise that holds back recovery after a shock like the Implosion of 2008 isn’t lack of spending as such — it’s lack of confidence. Capitalism depends on trillions of separate plans and desires working together. When investors are wary of investing and consumers — fearing the future — don’t know what they can really afford to buy, no amount of “jump start” splurging will repair the engine.

At the end of World War II conscripts were freed, wage and price controls were abandoned, and a sense of victory permeated everything — and the Great Depression ended. Finally.

The lesson? End wars. Curtail regulations. Free up the system.

This is Common Sense. I’m Paul Jacob.

By: Redactor


  1. Dagney says:

    End wars. Curtail regulations. Free up the system.

    But, that would mean the evil giving up their power. Sorry, it won’t happen without the power being taken from them. That’s why the good people of this country, for all time, must start to realize that elections have consequences.

  2. bruce stark says:

    “The lesson” is what brought about the Bush depression; he started a war, curtailed regulations, and the free system brought us Bernie Madoff.

  3. Sharon Stark says:

    And the consumer has access to the marketplace to tell them what they want to buy.
    We have no customer service so manufactures/retailers know that I can’t find my size shoes, clip on earrings, electric leafblower etc.

  4. Ken Morgan says:

    Well, yes to the points of the essay, except the hard nut about “end wars.” It wasn’t like the US rushed in to WWII. Three megalomaniacal tyrants imposed it upon the world. Gulf War I seems unavoidable unless you abandon the idea that nations have sovereignty of their borders.

    So, just how do we end wars eh?

  5. MoreFreedom says:

    Jacob missed the opportunity to point out that government slashed spending at the end of WWII. Keneysians warned there would be a big recession due to the cuts, yet there was a boom.

    Keyes was wrong, yet politicians and Krugman continue to promote and trot out his idea that government can prime the economy. The reality is that government spending for other than protecting our liberty, misallocates resources and makes us poorer.

  6. Drik says:

    Government slashed taxes as well as spending after WWII. Otherwise we’d have had the great depression of ’46. Prior to this cutting, the economy, the stock market, and real estate was all going down and unemplyment was going up.
    Can’t someone get this president a history book?

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