Paul Krugman, "The 1 Percent’s Solution": Don't Commit Suicide, Paul!

Another week, and another two New York Times op-eds from Paul Krugman, demanding increased government spending to heal the economy. Yawn . . .

Except this week it's different. This week, in an op-ed entitled "The 1 Percent’s Solution" (http://www.nytimes.com/2013/04/26/opinion/krugman-the-one-percents-solution.html), Krugman blames the wealthy - you know, Barack and Michelle Obama, Nancy Pelosi, etc. - for the failure of the federal government to see things his way:

"Does a continuing depression actually serve the interests of the wealthy? That’s doubtful, since a booming economy is generally good for almost everyone. What is true, however, is that the years since we turned to austerity have been dismal for workers but not at all bad for the wealthy, who have benefited from surging profits and stock prices even as long-term unemployment festers. The 1 percent may not actually want a weak economy, but they’re doing well enough to indulge their prejudices.

And this makes one wonder how much difference the intellectual collapse of the austerian position will actually make. To the extent that we have policy of the 1 percent, by the 1 percent, for the 1 percent, won’t we just see new justifications for the same old policies?"

Heck, I finally understand: Obama's first term stimulus packages were insufficient to put America back on track, and although the 2013 budget calls for higher outlays in 2013 and higher receipts, i.e. taxes some targeting the 1 percent (see: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/tables.pdf), it's just not enough.

But Krugman never studied logic. Even if austerity (i.e., insufficient stimulus as Krugman would have it) hasn't fired up the economy, it doesn't necessarily mean that significantly higher federal spending, which would trash the value of the US dollar, would make any long-term difference at all.

But it's Krugman's conclusion that has me worried:

"I’d like to believe that ideas and evidence matter, at least a bit. Otherwise, what am I doing with my life? But I guess we’ll see just how much cynicism is justified."

What are you doing with your life, Paul? So what it you write the same tripe every week? So what if your beloved Occupy Wall Street movement never caught on ("It’s clear what kinds of things the Occupy Wall Street demonstrators want, and it’s really the job of policy intellectuals and politicians to fill in the details," Paul Krugman, "Confronting the Malefactors" (http://www.nytimes.com/2011/10/07/opinion/krugman-confronting-the-malefactors.html))? Maybe you can still find a hobby. Get yourself a cat. Don't put an end to it!

Paul Krugman, "The Optimism Cure": It Beats Keynes Hands-Down

"In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again."

- Chance the Gardener, "Being There"

I'm no more fond of Keynes than I am of trickle-down economics. Rather, I believe in Chance the Gardener's school of thought, i.e. after winter comes the spring, unless, of course, the US government is foolish enough to listen to Paul Krugman. If the decision is taken to spend trillions of additional dollars on pork barrel stimulation, overseen by bureaucrats in Washington, and having no sustainable benefit, America will be brought to its knees.

In his latest New York Times op-ed entitled "The Optimism Cure" (http://www.nytimes.com/2012/09/24/opinion/krugman-the-optimism-cure.html?_r=1), Krugman whines about Romney's "substance-free" economic plan. Of course, Krugman is correct, but then where is the Obama plan?

Krugman concludes:

"Yet the truth is that it all fits together. Mr. Romney’s whole campaign has been based on the premise that he can become president simply by not being Barack Obama. Why shouldn’t he believe that he can fix the economy the same way?"

But in fact, Romney and Obama are remarkably similar: Neither is offering economic guidance, and both are saying, "Believe in me."

Welcome to the dawn of a new narcissistic age.

In fact, no matter who is elected, we are apt to see improvement in the spring . . . provided that Krugman is ignored.

David Brooks, "Après Rahm, Le Déluge," Versus Paul Krugman, "The iPhone Stimulus"

Note the stark dichotomy.

Approving the no-nonsense handling of the Chicago teachers' strike by Rahm Emanuel in his latest New York Times op-ed entitled "Après Rahm, Le Déluge" (http://www.nytimes.com/2012/09/14/opinion/brooks-apres-rahm-le-deluge.html), David Brooks observes that there are two economies which "exist side by side" in modern nations.

According to Brooks, "Economy I" consists of manufacturing companies which "are compelled to constantly innovate and streamline" owing to global competition.

In contrast, Brooks's "Economy II" includes governmental bodies active in "health care, education, prisons and homeland security."

Brooks writes:

"Over the past 50 years, spending on K-12 education has also skyrocketed. In 1960, Americans spent roughly $2,800 per student, in today’s dollars. Now we spend roughly $11,000 per student. This spending binge has not produced comparable gains in student outcomes. Education productivity is down, too.

If Economy I is great at generating output without generating employment, Economy II is great at generating employment without generating output."

The problem is that the bloated Economy II is becoming a burden that Economy I can no longer carry. Unless we reform Economy II and control its spending, the bloat will crush us. National productivity will slide. The economy will stagnate."

Meanwhile, Paul Krugman, in his Times op-ed entitled "The iPhone Stimulus" (http://www.nytimes.com/2012/09/14/opinion/krugman-the-iphone-stimulus.html?src=un&feedurl=http%3A%2F%2Fjson8.nytimes.com%2Fpages%2Fopinion%2Findex.jsonp), notes that spending on the new iPhone 5 could provide an instant boost to the US economy. And if spending on the iPhone could provide significant stimulation, Krugman argues that the government should now provide similar assistance:

"Long ago, John Maynard Keynes suggested that the answer was 'use, decay, and obsolescence': even in a depressed economy, at some point businesses will start replacing equipment, either because the stuff they have has worn out, or because much better stuff has come along; and, once they start doing that, the economy perks up. Sure enough, that’s what Apple is doing. It’s bringing on the obsolescence. Good.

But why suffer through years of depressed output and high unemployment while waiting for enough obsolescence to accumulate? Why not have the government step in and spend more, say on education and infrastructure, to help the economy through its rough patch?"

Well, I won't be buying an iPhone 5. I own an "obsolescent" BlackBerry and will somehow made do. On the other hand, I respect the free market decision of persons desiring to purchase and enjoy this latest technological marvel.

But hire more educators in Chicago, where, according to Brooks, "The average Chicago teacher makes $76,000 a year in a city where the average worker makes $47,000 a year"?

Or, consider Obama's proposed American Jobs Act. This legislation would have added 1.3 million jobs at a price of $447 billion. So divide $447 billion by 1.3 million jobs, and what do you get? Taxpayers would have been saddled with a cost of $344,000 per job.

Excuse me, Paul, but economic stimulation managed by the federal government during the first term of the Obama administration has already taken US debt over $16 trillion with nothing to show for it. (Yeah, sure, the recession might have been worse without it.) Ultimately, however, someone, who had no say in how the federal government distributed these funds, will be forced to foot the bill.

Thank you, but I think I will side with David in this instance.