Quote of the Evening: Sun Tzu refutes Keynes (& Krugman) [updated]
"What is essential in war is victory, not prolonged operations. No nation has ever benefited from a prolonged war." - Sun Tzu
UPDATE: Let's compare and contrast the common sense and sound reason of Ludwig von Mises to the dangerous hyperbolic fantasies of the Super-Krugman and his mentor Keynes (to whose intellectual influence virtually every politician and every mainstream journalist are slaves, whether they know it or not).
"In proportion as armaments increased the sales of munitions plants, they reduced the sales of all other industries.” [writing in Omnipotent Government]
"All the materials needed for the conduct of a war must be provided by restriction of civilian consumption, by using up a part of the capital available and by working harder. The whole burden of warring falls upon the living generation.” [writing in Human Action]
"At the breakfast table of every citizen sits in wartime an invisible guest, as it were, a G.I. who shares the meal. In the citizen’s garage stays not only the family car but besides, invisibly, a tank or a plane. The important fact is that this G.I. needs more in food, clothing, and other things than he used to consume as a civilian and that military equipment wears out much quicker than civilian equipment. The costs of a modern war are enormous." [Writing in Defense, Controls, and Inflation]
Krugman, on CNN this week:
"I mean, probably because you want to put these things together, if we say, 'Look, we could use some inflation,’ … which is, of course, anathema to a lot of people in Washington but is, in fact, what the basic logic says. It's very hard to get inflation in a depressed economy. But if you had a program of government spending plus an expansionary policy by the Fed, you could get that. So, if you think about using all of these things together, you could accomplish, you know, a great deal.
If we discovered that, you know, space aliens were planning to attack and we needed a massive build-up to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better." (http://bit.ly/nqrXjO)
Keynes, in his General Theory:
"If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing."