Krugman has two recent blog posts both worthy of brief mention. First, Is It Good to Live in a Destroyed World. He's simply pointing out that the post WWII weakness of other economies wasn't good for the US economy. My reaction isn't so much to the post itself as to its leading sentence:
On this blog and elsewhere, I often see assertions that America prospered after the Depression because our competitors were in a state of ruin.
This illustrates a flaw in thinking I see depressingly frequently today. Modern thought has become so dominated by economics that people seem to have difficulty in distinguishing between economic and political advantages, everything is ultimately tied back into the economy. While I may be reading too much into this, my thought is that the assertions Krugman is alluding to are based in the rather non-controversial claim that the US was at the height of its relative power at the time. This is distinct from this situation being good for our economy, it wasn't, but power is relative so if your competitors are weaker you are stronger by default, it says nothing about your absolute position. However, economic thinking is so dominant people remember this as the US being economically strong, not in power terms where it is relative strength that matters.