Really Scary Austrianism at National Review
I wake up this morning to this, from Paul Krugman:
Rottenness: Treasury secretary Andrew Mellon, according to Herbert Hoover:
Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.... It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people
Larry Kudlow, via Angry Bear:
Recessions are therapeutic. They cleanse excess from the economy. Think about excessive risk speculation, leverage, and housing. Recessions are curative: They restore balance and create the foundation for the next recovery...
And here is PGL of Angry Bear:
Angry Bear: The Labor Market Over the Past 15 Months: [The] E[mployment-to-]P[opulation ratio] has declined from 63.4% as of December 2006 to 62.6% last month. In the early part of 2007, the unemployment rate didn't move much as LFP fell from 66.4% to 66%. In other words -- Paul [Krugman] is right in saying that the deterioration in the labor market has been going on for a while.
In fact, it is so bad that even Lawrence Kudlow has to concede the obvious point:
The unemployment rate went up to 5.1 percent. Non-farm payrolls have fallen for three straight months. Private payrolls have fallen four straight months. And the entrepreneurial small-business-oriented household survey is below its November peak, showing a loss of 678,000 jobs. These are relatively mild job losses so far. So one can hope this will be a relatively mild recession. But frankly, no one knows for sure.... Recessions are therapeutic. They cleanse excess from the economy. Think about excessive risk speculation, leverage, and housing. Recessions are curative: They restore balance and create the foundation for the next recovery.
Yes -- Kudlow thinks recessions are good things as the job you just lost was an "excess." In fact, he is calling for economic policies that would make the recession worse:
[T]he U.S. dollar, which some are now calling the U.S. peso, should be appreciated in order to curb inflation.
Dollar appreciation might have a very modest impact on the inflation rate but it would have a significant impact on net export demand. And given that Mr. Kudlow apparently never learned international macroeconomics, let's remind him that appreciations tend to lower net exports. One would think such idiotic comments would have the editors of the National Review take the curative step of getting rid of village idiots like Mr. Kudlow. Then again -- who would write their pieces on economics if not for their group of village idiots?
