Krugman Through the Wormhole
The ever-sparkling Paul Krugman, in a missive just through the wormhole from his cosseted corner of the multiverse, reports on recent political history in a United States superficially similar to our own:
For more than a year and a half — ever since President Obama chose to make deficits, not jobs, the central focus of the 2010 State of the Union address — we’ve had a public conversation that has been dominated by budget concerns, while almost ignoring unemployment.
It is certainly interesting that there is a President Obama over in Krugman’s reality, too. But our own president delivered a different 2010 SOTU address. From ABC News:
"Jobs must be our number one focus in 2010," the president said. His call for a new jobs bill drew bipartisan support from the Members of Congress seated before him in the House chamber.
Obama dedicated about two-thirds of his address to the economy and domestic policy issues as he tried to reassure an increasingly skeptical U.S. public that his agenda is the right solution to fix the nation's economic woes.
Paul One-Note, predictably, tells us “the economy desperately needs a short-run fix.” And what would that fix entail? “First of all, it would involve more, not less, government spending for the time being.” Natch.
Seventeen months ago the nation was basking in the passage of the Affordable Care and Patient Protection Act. Just a year ago we were enjoying Recovery Summer, brought to flower by the Obama-Pelosi-Reid trillion-dollar stimulus. More recently we saw the president ignore his handpicked deficit reduction commission, proposing a budget containing no discernible detour from the current Road-to-Zimbabwe; a budget ultimately rejected in the Senate 97-to-zero. Who says bipartisanship is dead?
Meanwhile, the Business Destruction Agency (formerly, the Environmental Protection Agency) is pushing ahead with new ozone rules calibrated to create maximum uncertainty for those factories yet to relocate to Communist China or other business-friendly jurisdictions. But not to worry, the Wall Street Journal tells us “the EPA and the White House have emphasized that the final rule would be flexible.”
Whatever the flexible details of the final rule, I bet I can get a head start on the waiver process by writing a large check to the Obama reelection campaign.
Meanwhile, the BDA continues what William Yeatman, writing in the New York Post, evocatively terms its “War on Coal.” Perhaps Mr. Krugman can get another column through to our Earth explaining how they create jobs over there while intentionally and systematically destroying the sector responsible for 50 percent of electric power generation. And as Robert Bryce details at National Review, don’t expect clean-tech to come to the rescue. As Texans are discovering in the current heat wave—who knew that it might be hot in Texas in August?—the wind turbines built at a cost of $25 billion over the past few years have proven nearly useless in meeting peak energy demand since there isn’t that much wind when it is armadillo-baking hot outside.
Oh, and while Krugman’s Obama has been ignoring job-creation to focus on deficit reduction, our own president was ignoring non-government employment to push Obamacare as a new deficit-neutral entitlement. Except, as Forbes Magazine contributor Avik Roy explains, ObamaCare will easily cost as much as $500 billion more than originally estimated.
In our universe, at least, there are ample reasons why factories are not expanding and other businesses are not hiring.
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Re: Krugman Through the Wormhole
There ought to be a prize for the Nobel-Prize winner who most successfully makes a fool of himself. Paul Krugman, who won the Nobel Prize for Economics, is now doing for economics what Barack Obama, who won the Noble Peace Prize, has done for peace.
Mar '11
Re: Krugman Through the Wormhole
George, the second half of your post, starting with "Seventeen months ago", should be the opening statement for any Republican at the next debate.
Jun '10
Re: Krugman Through the Wormhole
Al Gore, Paul Krugman and Barack Obama - Nobel Prize-winners all.
Next to be considered: Michael Moore, Cynthia McKinney, Imam Rauf, Mahmoud Ahmadinejad, Cindy Sheehan and Al Sharpton.
May '10
Re: Krugman Through the Wormhole
The U.S. government should spend $50 trillion on short-term stimulus, which will fix unemployment by crushing employers in a vise. Anyone who suggests a number lower than mine is a right-wing yokel with an axe to grind. Tea Party extremists!
...While I've just saved Prof. Krugman the trouble of writing another screed ever again, I suspect the real benefactors of my previous three sentences are the dozens of Americans now freed from the burdens of Krugman's hackery.
Jun '10
Re: Krugman Through the Wormhole
Jason Hart: The U.S. government should spend $50 trillion on short-term stimulus, which will fix unemployment by crushing employers in a vise. Anyone who suggests a number lower than mine is a right-wing yokel with an axe to grind. Tea Party extremists!
...While I've just saved Prof. Krugman the trouble of writing another screed ever again, I suspect the real benefactors of my previous three sentences are the dozens of Americans now freed from the burdens of Krugman's hackery. · Aug 14 at 11:07am
Why such a low figure?
Jul '11
Re: Krugman Through the Wormhole
Ouch! Was that as therapeutic to write as it was to read? Thanks for making my day ... I'll be chuckling 'til dinner!
May '10
Re: Krugman Through the Wormhole
Brian Watt
Jason Hart: The U.S. government should spend $50 trillion on short-term stimulus, which will fix unemployment by crushing employers in a vise. Anyone who suggests a number lower than mine is a right-wing yokel with an axe to grind. Tea Party extremists!
Why such a low figure? · Aug 14 at 11:08am
Why, because Krugman is such a moderate! If he were a leftist nut-job he would demand twenty or thirty times as much!
Jun '10
Re: Krugman Through the Wormhole
Jason Hart
Brian Watt
Jason Hart: The U.S. government should spend $50 trillion on short-term stimulus, which will fix unemployment by crushing employers in a vise. Anyone who suggests a number lower than mine is a right-wing yokel with an axe to grind. Tea Party extremists!
Why such a low figure? · Aug 14 at 11:08am
Why, because Krugman is such a moderate! If he were a leftist nut-job he would demand twenty or thirty times as much! · Aug 14 at 11:11am
Got it...but don't give him any ideas. :-)
Aug '10
Re: Krugman Through the Wormhole
Excellent post!
Here's a fun debate trick to use against liberals: The next time one of them brings up Krugman's Nobel prize, ask him or her why that matters. After being told that the Nobel says that Krugman is brilliant, or that he's the best economist, or whatever trump card they think the Nobel prize plays, nod in agreement.
Then pepper them with quotes from Friedrich Hayek, Milton Friedman, Robert Lucas, Gary Becker, and Vernon Smith - all economists who have won the Nobel Prize. Friedman and Hayek are gone, but you know they would never agree with this president or with Krugman. Lucas, Becker and Smith are still with us, and all have written in opposition to Krugman's ideas and this administration's economic policy.
Apr '11
Re: Krugman Through the Wormhole
"As Texans are discovering in the current heat wave—who knew that it might be hot in Texas in August?—the wind turbines built at a cost of $25 billion over the past few years have proven nearly useless in meeting peak energy demand since there isn’t that much wind when it is armadillo-baking hot outside."
It seems that Rob, Jonah, James and Mark are not the only comedy writers at Ricochet. Who knew our conservative elite was so mordantly hilarious?
Oct '10
Re: Krugman Through the Wormhole
Paul Krugman knows better. I've recently become convinced of this. He knows that our creditors will not allow us to run deficits for more than another year or two, if that. He wants the economy beefed up for Obama's reelection--followed immediately by more budget cuts than would otherwise have to happen, and likely an economic crisis of some sort as our creditors panic.
We would pay for the stimulus, via higher interest rates, dollar devaluation, inflation, and panic-driven budgetary cuts. We might make it to the 2012 election, but I seriously doubt we would make it more then a few months after it before we hit a spiral of bond market panic, devaluation, and inflation.
Oct '10
Re: Krugman Through the Wormhole
Dan Hanson: Excellent post!
Here's a fun debate trick to use against liberals: The next time one of them brings up Krugman's Nobel prize, ask him or her why that matters. After being told that the Nobel says that Krugman is brilliant, or that he's the best economist, or whatever trump card they think the Nobel prize plays, nod in agreement.
. · Aug 14 at 12:26pm
You forgot John Taylor. He's way more accomplished than Krugman (or even Milton Friedman, in my opinion) for inventing a politically-sustainable way to control inflation (the Taylor rule) for floating currencies.
Jul '11
Re: Krugman Through the Wormhole
I'm having a hard time understanding if Krugman is doing any math, any at all, and coming up with answer "More gov't spending", or if he's just got the phrase auto-saved in Wordpad and he coughs it up into any column he writes.
Maybe his gov't spending is aimed at the corporate elites he used to toady for, like Enron. Perhaps he's laying the groundwork for his next adviser slot at whatever corporation has paid off enough Congressman in order to secure a favored slot in the next avalanche of legislation scheduled to issue forth from the suppurating bowels of Congress. That sounds about right.
Paul Krugman: Can't get hit by a bus fast enough.
Jun '10
Re: Krugman Through the Wormhole
"Krugman Through the Wormhole." I assume he's the worm.
Aug '10
Re: Krugman Through the Wormhole
Krugman's argument is consistent with pure Keynesianism: The output of the economy dropped by far more than the 810 billion dollars paid through the stimulus, so to a good Keynesian, that size of stimulus just won't do. If you really want to get the economy revving and lift Keynes' 'animal spirits' and break the downward spiral of confidence, you have to restore the economy to near-previous levels of jobs and output. Krugman figured that 3 trillion dollars in spending was about what was required.
The problems with this are many. First, the government couldn't find enough 'shovel ready' jobs for even the meager 100 billion or so that was actually directed at infrastructure. How were they supposed to spend 30 times that much in a timely manner?
Second, there's no way you can direct that amount of money at exactly the resources are idle. Not in a modern economy, you can't. Supply chains are too intertwined and there's too much specialization of labor. So the money would largely crowd out private employment, pulling high-powered people like architects, project managers, and senior engineers out of productive work into government make-work.
Aug '10
Re: Krugman Through the Wormhole
Continuing...
You also run into the problem that you're simply not going to find enough money to borrow. Where is the U.S. supposed to find 4.5 trillion dollars of real wealth to borrow in short order? The U.S. would have had to print that money, which would have devalued the dollar and acted as a tax on holders of American dollars, which would counteract the stimulus.
Finally, there's no way you could inject that much money into the economy without causing huge distortions and uncertainties that would freeze up business spending and hiring.
The likely outcome of a stimulus the size Krugman advocates would have been for the government to use it to expand its own agencies and hire armies of new public employees, which would cause the permanent structural size of government to grow.
I think Krugman knows all this, but he doesn't care. If the end result is a massive increase in government and more power to the annointed experts with the clipboards such as himself, then that's a feature, not a bug. So for him, a huge stimulus is win-win. For the American people, not so much.
Feb '11
Re: Krugman Through the Wormhole
I made no money on it, but Krugman was an adviser to Enron, when anyone reading the WSJ could tell Enron was becoming a disaster:
Failure to bribe the right people in India on an energy plant, failure to make money trading water rights in California, investments in Argentina when that country was in bad financial shape. CFO magazine congratulating the company on its brilliant use of accounting rules....
Feb '11
Re: Krugman Through the Wormhole
Dec '10
Re: Krugman Through the Wormhole
“the economy desperately needs a short-run fix. ”
My guess is that Krugman would be satisfied with one that stops working September 4, 2012.
Feb '11
Re: Krugman Through the Wormhole
James Taranto, over @ WSJ, routinely refers to Mr. Krugman as a 'former Enron adviser'. You gotta love it.