My Problem with Krugman

He's smart. He's articulate. He writes well. He's got a great beard.

But why do I think he's wrong about debt spending and a Keynesian solution to the economic crisis?

In simple terms, the Keynesian approach during the Great Depression failed. After all of our competitors were destroyed, of course the US economy -- in relative terms -- skyrocketed. If a busload of Olympic swimmers gets in to a horrific wreck, and only one escapes serious injury, you know he's going to win the next race.

The second reason his prescriptions scare me is because there has been very little stimulus spending to this date. Great volumes of taxpayer lucre were shoveled into the banks, but the big guys didn't even need it. Of the big banks, only BoA and Citi actually needed a bona fide bailout. Maybe Wells Fargo, too -- but maybe Wells isn't too big to fail. Of the ARRA, though, only a miniscule fraction of the allotment has been sent out to do anything in mainstreet.

So, what is the cause of the rally since March?

Value seeking, investor boredom, stronger-than-expected dollar, illusions of recovery in China. In this preceding list, where is the domestic stimulus?