The irony is just so sweet. Or sicking. I can’t decided which.
To think that Krugman was one of those who thought George Bush was stupid for invading Iraq. At least George Bush was not stupid enough to pick of fight with the very people who were financing his wars. On the the other hand, Krugman is at the fore front of those arguing that Obama should borrow a lot more money than George Bush ever did. And yet, Krugman is arguing that Obama should pick a fight with America’s biggest lender.
I could expound all day on why this is a bad idea. But I would just be wasting my breath. Most economists are shaking their heads at the shear stupidity of Krugman’s purposed course of action (a good take down here using Krugman’s own prior arguments). Yet their arguments are all futile. The dangerous thing about Krugman’s post is that it does not need to make sense because it is what people want to believe.
It sits well with most of the American public to see China as the evil one responsible for all of our economic ills. Your average red stater and your average blue stater can not agree on much. But they can both pile on the hate for China.
Therefore, it is in Obama’s political interests to pick a fight when China The only real question is if he is going to fake a trade fight with China or really go for it with gusto.
Since most of the things that Obama’s has done have been half-hearted at best, one is tempted bet on the fake a trade fight.
But the problem is, these things can take on a life of their own.