by Ghost of John Brown
I posted the article below earlier attributing a comment to Paul Krugman. The fine folks at SEIU Illinois sent in a comment that the quote attributed to Mr. Krugman was an identity theft. Mr. Krugman did not say that the economy would have improved if the earthquake damage was greater. Here is Mr. Krugman's comment on the matter. My apologies.
That said, Mr. Krugman did make a very similar statement regarding the earthquake/tsunami in Japan, which was linked in my earlier story. Thus, the general discussion of the failure of Keynesian Economics is still relevant. Click below the fold for the original story. Now that I know the fine folks at SEIU and so many Paul Krugman fans read this blog, I'll start typing s l o w e r.
The professor's point was that it is easy to go through a computer program or a series of calculations and not notice that you have made a typographical error or have transposed some numbers. If you don't have a decent idea of what the answer is, you can give out an answer that can be wildly wrong, but you think that you've got a winner.
Enter Paul Krugman.
If you are a Keynesian policy maker, Paul Krugman is your rock star. In 2008, Mr. Krugman won the Nobel Memorial Prize in Economics for his work on the New Trade Theory, which essentially argues the merits of protectionist economics. He is also a writer for the New York Times. While you would think that with such high qualifications and scholar, Mr. Krugman would be devoid of saying really idiotic things. Well, you would be wrong.
After the earthquake on Tuesday, Mr. Krugman said this:
"People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage."
Well lordy be, let's just call up the B-52 bombers and start knocking down bridges and buildings. We could have a kumbaya moment with the Neo-Cons and the Keynesians. Let's just start blowing stuff up so we can rebuild it. Can you imagine the glee your average fly-boy would have if he gets to use real targets day in and day out? We could tell our Air Force that they are improving the economy. Heck, after a few thousand sorties, we'd be up to 10% annual GDP growth.
Keynesian idiots like Mr. Krugman believe that all government spending is good spending. Just spend, damn-it, and spend it quick. After the Japanese earthquake/tsunami, Mr. Krugman opined that it might actually be good for the economy. Well how has that turned out for the Japanese? In the last reported quarter in Japan, they experienced an -0.3% GDP. Yep, you read that right; the Omniscient Krugman was wrong, the Japanese economy contracted, not expanded.
If we put on our common sense hat, a fashion accessory that obviously Mr. Krugman does not have at his disposal, economic growth comes from increasing efficiency in production. If it takes me a whole day to pick ten bushels of corn because I have to cut it with a knife by hand, and it takes you a whole day to knit one cap because you pulled out your crochet needles, then I have to work all day for one cap (simplified - you obviously have to take out material costs). However, if I get a combine and I can harvest 10,000 bushels in a day, then I might be able to afford more caps and I'll make the cost of my corn cheaper for you to buy.
There is no effiiciency in make work for make work's sake. If government spending doesn't increase the private sector's efficiency or create a better standard of living for all, then it's a drag on the economy. A court system is vital, because it helps to weed out corruption (well, everywhere except Cook County) and by removing corruption, we make the production of commerce more efficient. Transportation spending on highways helps to bring products to market faster and more efficiently, thus saving time and money. Certain aspects of the EPA help to make our water and air cleaner, which reduces illness (I say certain aspects, because the EPA has gone crazy in the last few years).
Mr. Krugman and other Keynesians take the idea of government "stimulus" to the extreme. They don't care if a program is efficient or if it speeds along the efficiency of the private sector, all they care about is that there is spending, and lots of it.
So sure, let's have big earthquakes, because our economy will be better off for it. That's the way it works in your house, right? If you son wrecks the family sedan, I'm sure you do a dance because it means that the household budget just got bigger. "Why honey look, we spent $200,000 this year compared to only spending $100,000 last year. We must be getting rich!!!"
As the title of this article says, you have to have a college degree to say something so stupid. Mr. Krugman has a Nobel Prize, so he can say things with that extra dose of stupidity.
Follow Ghost of John Brown on facebook - click here.
