Bad History Week at Robert Samuelson’s

There was a time—in the early days of the Clinton Administration, perhaps—when Robert Samuelson’s column on economics was worth reading, on a consistent basis. But the times, well, they changed a long time ago. Recently, Bob took note of the fact that, economically, things are pretty shitty these days, and the only people with a good idea of what to do about it are the Keynesian crowd. Yeah, we could do with some countercyclical spending right about now. Unfortunately, we can’t afford it.

“Wondering why government can’t restart the sluggish economy? Well, one reason is that we are still paying the price for the greatest blunder in domestic policy since World War II. This occurred a half-century ago and helps explain today’s policy paralysis. The history — largely unrecognized — is worth recalling.

“Until the 1960s, Americans generally believed in low inflation and balanced budgets. President John Kennedy shared the consensus but was persuaded to change his mind. His economic advisers argued that, through deficit spending and modest increases in inflation, government could raise economic growth, lower unemployment and smooth business cycles.

“None of this proved true; all of it led to grief.”

Since JFK was president for less than four years, dying almost fifty years ago, and since his policies could have been reversed at any time, by any of his five Republican successors, it’s hard to understand why JFK’s Keynesian advisors can be the source of all our current woes. During Kennedy’s brief presidency, the economy was, in fact, quite healthy. Bob, if he had wanted to, might have pointed to Lyndon Johnson’s folly of trying to fight a war without raising taxes, or how the oil embargo of the early 1970s raised energy prices by about 400 percent and put the postwar boom into a stall from which it has never fully recovered.* Or he might have pointed to Ronald Reagan’s “tax less, spend more” policies of the 1980s, which doubled the size of the national debt, faithfully repeated by George Dubya, as urged on by Dick “Reagan taught us that deficits don’t matter” Cheney. Bush wasted literally trillions on tax cuts that did nothing for the economy, and trillions more on a grotesquely aggressive and wasteful “defense” policy that brought death to hundreds of thousands and years of suffering to millions, while weakening America’s position all around the world. He could have pointed to all of these things. But Bob is a lot more comfortable blaming Democrats who have been dead for half a century.

Afterwords
Bob’s current column, on “offshoring”—not so bad!