Guns and butter

Socialists of all parties have at least two good reasons to celebrate these days. First came the news from Sweden that Paul Krugman, a champion against free market capitalism, won the Nobel for economics. Then Barack Obama received a mandate to change in a radical way the rotten philosophical, political, and economic fundamentals of America.

Once upon a time Americans believed that they were responsible for their own successes and failures. They saw voluntary charity as a divine mandate. A Democrat in the White House called forcing taxpayers to buy food for orphans "stealing money from one group of citizens to give to another." Grover Cleveland did not believe "that the power and duty of the General Government ought to be extended to the relief of individual suffering."

During the Great Depression, the numbers of those suffering were obviously too great for FDR to ignore. In the eyes of the president this justified violating constitutional restrains and interfering in private economic affairs. Envying the apparent stability of planned economies, Roosevelt pushed the country on the "road to serfdom." The reason why walking down that road has not (yet) taken the States of the Union to the conditions of Stalin's Soviet Union is America's long legacy of decentralization of power-in politics and through the market.

The explosion of public spending did not bring the promised recovery under FDR. Krugman's thesis is that the New Deal was not interventionist enough and that it was WWII that restored America's prosperity. Funny how that parallels other "progressives" who blame the failures of previous socialist experiments on failures of leadership to implement true Marxism.

Today it will be much easier for the federal government to act big. Obama has already promised the "butter," Krugman recently advocated the "guns." Together these two can engineer a recovery that will be studied by generations of econ students.