Monday, June 28, 2010

Paul Krugman is a Strange Fellow

I have a lot of thoughts about Paul Krugman from time to time. Most of them are negative, as he is a self-promoted liberal with some pretty horrendous ideas for how the government should operate. However, he's also a pretty smart guy, which makes it frustrating that he can fairly accurately assess a situation, then apply his liberal bias to come to a completely wrong-headed conclusion.

Take, as a recent example, this piece about the danger of the world falling into another depression due (primarily) to the lack of jobs. The premise is sound, and entirely agreeable: without jobs, the economy spirals downward, generally making everyone unhappy. If you want to fix the situation and avert a more serious problem, you'd want to do a few things: make sure the climate is good for businesses to operate and employ people, provide a fair and level playing field to encourage people that all they would need to operate a successful business was hard work (as opposed to political friends and handouts), and remove any disincentives which might be keeping people from being willing or able to work (such as long-term welfare programs). As added insurance, you could work to ensure that the country was as viable a place for all types of business as possible, and that as few industries as possible were being exported or overly regulated. Finally, you need to keep government debt under control, so people are not scared about their future prosperity and security, and can just focus on earning an honest living. Sounds simple, right?

Well, first let's compare to the Obamanation, so we can see how good (or bad) of a job they are doing. I should point out this is only with respect to the economy; they may be doing better or worse in other areas, but we're just focused on the economy here. Let's see... Climate good for business: nope, tons of regulations, massive rewriting of industry rules, takeovers, czars running industries; a solid F- on this category for Obama and the missing village idiot liberals in Congress. Fair and level playing field: nope again, trillion dollar pork handout bill, plus Chicago-style extortion and selective arbitrary unconstitutional actions against businesses ensure another solid F here. Remove disincentives to work: not doing this either, but at least we're not raising handouts and welfare [much] [yet], so maybe a D here. What about keeping business here? Gotta be fair and give a C- for this currently, although Cap & Tax would lower it to a solid D or below if/when it passed. That just leaves keeping the debt under control so people aren't worried about the future value of their money: Obama and the tools round out their report card with another F. I guess the bottom line here is if you're concerned about the economy and you voted for Obama, stop voting: you're hurting the country.

But what about the [esteemed] economist Krugman, does he have the right answers? After all, it's not a hard problem: you want jobs and stability, and there's nothing magical about getting from here to there. Unfortunately, Krugman recommends a detour of massive spending to bankrupt the country and collapse the currency; apparently this is a necessary side-trip on the way back to national stability. Huh... for a purportedly smart guy, his plan (like most of his other ideas) seems really stupid. Perhaps he sees how collapsing the US currency Greece-style is the road to economic prosperity, but I doubt it; more likely he's just advocating more of the same idiotic policy decision which got the country into this mess.

Hey, I've got a novel approach for economic stability: how about we cap the amount of drag the government puts on the economy, make sure the drag is spread as evenly, fairly, and impartially as possible, and force the politicians to only spend that much money! That way you have a fair and stable business environment with low drag, a stable currency with which to do business, and a stable country that people can live and work in and not have to worry about future national economic stability. Seems a heck of a lot more straightforward than a magical trip through liberal fantasy land with the vague promise that if we the people just hand over enough money, power, and control to the "enlightened" elite like Paul Krugman, they will somehow bring prosperity to the masses after all the other inevitable damage, grief, and forced transfer of wealth to our would-be liberal masters. But that's just my opinion, I could be wrong.


  1. Nick,can we elect you president?

  2. Lol... sure, if you have roughly 150 million close friends spread across the US. Outside of that possibility, though, I think I'll stay away from politics; most politicians seem like contemptible scum to me, and I'd probably just end up being the guy constantly being asked to apologize for spontaneous outbursts of "you lie!" and such.

    Although I did have a fantasy of being on the panel getting to play political theater with Elana Kagan recently. I think my exchange started out along the lines of:

    Me: Are you currently, or have you ever, served in the capacity of a judge at any level of government? Just a simple 'yes' or 'no' please.
    Elana: No.
    Me: Oh. [assistant whispers in my ear] Oh, apparently we allow people with no relevant experience or record what so ever to be nominated for the Supreme Court! What an odd thing to be allowed. Well, in that case I guess I have a few more questions...

    I think I would at least be amusing...

  3. I do not know how to weigh the benefits of fiscal stimulus against the long-term cost of the added debt. The theory is that stimulus decreases the unused capacity of the economy, i.e. factories and people who could be providing services sitting idle. The theory says that stimulus (borrowing money) will generate so much extra production that will be way more than it costs in interest. I am not knowledgeable enough to be able to support or criticize that theory.

    It is hugely unfair to say that stimulus and bailout policies reflect a socialist ideology without acknowledging there’s a non-socialist theory behind them. President Bush pushed for stimulus before the recession of 01-02 hit. So you could say Bush was more profligate because he called for stimulus without any reason.

    My assessment is that over-spending is a completely bi-partisan problem, and you are way off by suggesting this is something specific to a particular politician or party. Deficit spending can have a medicinal effect in moderate amounts in certain situations just like alcohol can, but the primary motivation more most use is not medicinal.

  4. I respectfully disagree with the stimulus theory, and also the concept that the huge Bush/Obama monetary handout program was anything resembling what even the theoretical idea of a stimulus would be. For a government monetary injection to be beneficial without being overly disruptive to the economy, it must be applied impartially, without perceptible bias or favoritism for any particular persons or industries, and must maintain private industrial capacity/jobs without shifting much (if any) of the capacity from the private to public sector. It would be difficult for a rational person to argue that the "stimulus" handout program, as administered by the Obama administration, succeeds even marginally at any of those objectives; hence the utter failure designation (again, only from the perspective of helping the economy).

    There is a potential value in government spending to jump-start the economy, or "take up slack" in a recession, if applied carefully as described above. The grave and intentional "error" of the Obama administration, as FDR before him, was using the crisis as an opportunity to advance a socialist and nationalization agenda, while disregarding the impact on the economy. For what it's worth, I think Bush was wrong to call for a stimulus also; not because there isn't potential value in such a program done correctly, but because of the huge potential for disastrous abuse and economic distortion from the redirecting of such an effort to serve a political agenda instead of the economy, as we have seen clearly demonstrated by the Obamanation.

    Deficit over-spending is indeed a bi-partisan problem; Obama and the other liberal idiots in Congress are just receiving the blunt of my current vitriol because of the magnitude of their growing the national debt, their willful disregard for the economic welfare of the country, their disingenuous distortions of simple economic causality, their capitalization on the crisis to advance a socialist agenda, and their contemptible transparently-false assertions that they are trying to help the economy. I hope that I would be equally critical of a Republican administration/Congress doing equivalent damage to the country.