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Krugman Never Learns
Being a Nobel Laureate means never having to say you're sorry. In Paul Krugman's case, it means never using simple logic.
Recently, Krugman used his economic credentials to espouse the benefits of increased government spending through an alien invasion hoax. When an earthquake rocked the east coast, someone impersonating Krugman posted through a fake Google+ account, "but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage." Some news outlets picked up on the prank, including the National Review and American Thinker. Krugman took to his blog to deny making the quote as well as denounce the National Review as "not so good people."
"So if you see me quoted as saying something really stupid or outrageous, and it didn't come from the Times or some other verifiable site, you should probably assume it was a fake..." Krugman bemoaned. Problem is, rhetoric on destruction causing economic growth is right up his alley.
When the Obama administration decided to halt further EPA regulations to curb smog emissions, Krugman condemned the decision because forcing businesses to renovate their facilities will.....create jobs?
According to the Princeton economist, "...now you can see why tighter ozone regulation would actually have created jobs: it would have forced firms to spend on upgrading or replacing equipment, helping to boost demand. Yes, it would have cost money -- but that's the point!"
It doesn't take a Nobel Prize in economics, or a high school diploma, to see something is amiss. In the mind of a Keynesian, the government can "create" jobs by forcing an industry to spend money upgrading its infrastructure. Good thing Dr. Krugman has been blessed with otherworldly knowledge to assume each company affected will be able to afford this new mandate which is estimated to cost $90 billion a year. The possibility that some businesses may be unable to pay for such renovations, or will cut back spending in other areas such as research and development, is a non-issue.
Government knows best after all.
While trying to disprove French theorist Frederic Bastiat's famous "broken window fallacy," Krugman commits the number one flaw of poor economics: never considering the unseen.
Yes, whenever the government imposes a mandate that forces an industry to upgrade its infrastructure, spending must take place and demand rises. This is short term thinking however, as spending directives are not self sustaining. Once an industry adjusts to these new regulations, given that it could afford to in the first place, demand falls off. Keynesian sugar highs never last long enough.
Krugman's "spending is good" mentality rests upon the notion that the economy is full of "idle resources," which only the government can spend, or force, into productivity. But as economist W.H. Hutt pointed out almost half a century ago, the Keynesian theory of "idle resources" in need of stimulation is just as absurd as thinking prosperity comes from the printing press. What Krugman and his Keynesian comrades see as untapped resources actually serve a purpose by being idle. After all, business owners, being the greedy capitalist pigs they are, surely wouldn't leave capital unused if there is a profit to be made. When resources are left "idle," it is mainly due to uncertainty in market conditions or long term planning on behalf of the owners.
Just because a company is forced to spend money updating its facilities to comply with federal law doesn't mean resources are being used effectively. Perversity in mindset lies with placing trust in government officials over private individuals. In the General Theory, Keynes argued that politicians take the "long view" and achieve "general social advantage" when spending other people's money.
Salvation through coercion if you will.
Only child-like naiveté explains one's believe in an occupation based on deceiving more people than your opponent on Election Day. Krugman is a fool who places his faith in baby-kissers -- but I repeat myself.
In the end, one could use Krugman's logic and end our current economic malaise through government mandating every business in the country to update its computer/IT system. Just think of all the demand such a regulation would create! Jobs will be created and prosperity would reign for all!
I will take my Nobel Prize now.
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