Home > Cande = Conjecture & Exaggeration, Fande = Fact & Evidence, self-sacrificing, The Economy > IMPORTANT: The Republican Party of the 2000s wants to dismantle FDR’s “New Deal” for Americans, which came about after the Republican Party of the 1920s led to the Great Depression

IMPORTANT: The Republican Party of the 2000s wants to dismantle FDR’s “New Deal” for Americans, which came about after the Republican Party of the 1920s led to the Great Depression

http://www.nytimes.com/2011/02/11/opinion/11krugman.html?_r=1

Abraham Lincoln, Inflationist

By PAUL KRUGMAN
OP-ED COLUMNIST
Published: February 10, 2011

EXCERPTS in italics from The New York Times:

There was a time when Republicans used to refer to themselves, proudly, as “the party of Lincoln.” But you don’t hear that line much these days. Why?

The main answer, presumably, lies in the G.O.P.’s decision, long ago, to seek votes from Southerners angered by the end of legal segregation. With the old Confederacy now the heart of the Republican base, boasting about the party’s Civil War-era legacy is no longer advisable.

But sooner or later, Republicans were bound to notice other reasons to disavow Lincoln. He was, after all, the first president to institute an income tax. And he was also the first president to issue a paper currency — the “greenback” — that wasn’t backed by gold or silver. “There is nothing more insidious that a country can do to its people than to debase its currency,” declared Representative Paul Ryan in one of two hearings Congress held on Wednesday on monetary policy. So much, then, for the Great Liberator.

Which brings me to the story of what went on in those monetary hearings….

Mr. Ryan, who led the other hearing — the one at which Ben Bernanke, the Fed chairman, testified — is a rising Republican star. So it’s worth noting that Mr. Ryan’s hard-money rhetoric was nearly as bizarre as Mr. DiLorenzo’s.

Start with that bit about debasing our currency. Where did that come from? The dollar’s value in terms of other major currencies is about the same now as it was three years ago. And as Mr. Bernanke pointed out, consumer prices rose only 1.2 percent in 2010, an inflation rate that, for the record, is well below the rate under the sainted Ronald Reagan. The Fed’s preferred measure, which excludes volatile food and energy prices, was up only 0.7 percent, well below the target of around 2 percent.

But Mr. Ryan is sure that the dollar is being debased and won’t take no for an answer. In an attempt to create a gotcha moment, he waved a copy of a newspaper bearing the headline “Inflation Worries Spread” at the Fed chairman. But the gotcha actually went the other way. As Mr. Bernanke immediately pointed out, the article was about inflation in China and other emerging markets, not in the United States. And the Fed chairman declared, correctly, that “inflation made here in the U.S. is very, very low.”

Advantage Bernanke. But the facts don’t matter, because conservative hard-money mania, the demand that the Fed stop trying to rescue the economy, isn’t really about inflation fears.

Mr. Ryan said as much in Wednesday’s hearing, in which he declared that our currency “should be guided by the rule of law, not the rule of men.” A few years ago, my response would have been, say what? After all, even Milton Friedman saw the conduct of monetary policy as a technical issue, not a matter of principle; his complaint about the Fed’s role in the Great Depression was that it didn’t print enough money, not that it printed too much.

But then Friedman, who believed that it sometimes makes sense to let your currency depreciate, who urged Japan’s central bank to adopt a policy very similar to what the Fed is doing now, was a leftist by the standards of today’s G.O.P.

Wednesday’s hearings aren’t likely to have any immediate effect on monetary policy. But they offer a revealing — and appalling — look at the mind-set of one of our two major political parties. 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. Backward, march!

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Paul Krugman - New York Times Blog

http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/paulkrugman/index.html?scp=4&sq=krugman%20bio&st=cse

EXCERPTS:

“Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed Page and continues as professor of Economics and International Affairs at Princeton University.

Mr. Krugman received his B.A. from Yale University in 1974 and his Ph.D. from MIT in 1977. He has taught at Yale, MIT and Stanford. At MIT he became the Ford International Professor of Economics.

Mr. Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes. His professional reputation rests largely on work in international trade and finance; he is one of the founders of the ‘new trade theory,’ a major rethinking of the theory of international trade. In recognition of that work, in 1991 the American Economic Association awarded him its John Bates Clark medal, a prize given every two years to ‘that economist under forty who is adjudged to have made a significant contribution to economic knowledge.’ Mr. Krugman’s current academic research is focused on economic and currency crises….

On October 13, 2008, it was announced that Mr. Krugman would receive the Nobel Prize in Economics.”

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http://www.whitehouse.gov/about/presidents/franklindroosevelt

Photo of Franklin D. Roosevelt

EXCERPTS:

“Assuming the Presidency at the depth of the Great Depression, Franklin D. Roosevelt helped the American people regain faith in themselves. He brought hope as he promised prompt, vigorous action, and asserted in his Inaugural Address, ‘the only thing we have to fear is fear itself’….

In the summer of 1921, when he was 39, disaster hit-he was stricken with poliomyelitis. Demonstrating indomitable courage, he fought to regain the use of his legs, particularly through swimming. At the 1924 Democratic Convention he dramatically appeared on crutches to nominate Alfred E. Smith as “the Happy Warrior.” In 1928 Roosevelt became Governor of New York.

He was elected President in November 1932, to the first of four terms. By March there were 13,000,000 unemployed, and almost every bank was closed. In his first ‘hundred days,’ he proposed, and Congress enacted, a sweeping program to bring recovery to business and agriculture, relief to the unemployed and to those in danger of losing farms and homes, and reform, especially through the establishment of the Tennessee Valley Authority.

By 1935 the Nation had achieved some measure of recovery, but businessmen and bankers were turning more and more against Roosevelt’s New Deal program. They feared his experiments, were appalled because he had taken the Nation off the gold standard and allowed deficits in the budget, and disliked the concessions to labor. Roosevelt responded with a new program of reform: Social Security, heavier taxes on the wealthy, new controls over banks and public utilities, and an enormous work relief program for the unemployed.”

 

 

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