A long time ago there was a really good economist. Then something happened and now that economist doesn’t exist anymore.
After claiming that aliens would solve our economic woes, now rumors are out that the aforementioned Krugman has claimed that a larger earthquake would drive economic recovery:
“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.”
Reminds me of this:
Milton Friedman went to Asia to visit a jobs project; it seems that a canal needed to be built. When he arrived on the site, he witnessed that the workers were using shovels and wheelbarrows. He asked the government administrator why there wasn’t any heavy earth-moving machinery? The official responded that this was a “jobs program”.
Milton responded, “Well, if that’s the case, why not give them spoons and buckets?”
I’ve read krugman’s various posts on this topic and I think your selective quoting is misleading. His point is that when a disaster hits, it can knock a government like ours out of its resistence to spending. He is not cheering for an earthquake or a war. He’s saying that if we can afford to spend money on an earthquake or a war why can’t we spend it when there isn’t one?
I’ve read krugman’s various posts on this topic and I think your selective quoting is misleading.
The rumors were indeed just that, rumors. It appears that the quote came from a G+ account that was an imposter. He didn’t say what we rumored him to say.
He is not cheering for an earthquake or a war.
Yeah, I know. A friend of mine chastised me for “cheering” that the USPS was going to lay off 120,000 people. That I was wrong to take pleasure in the fact that 120,000 people would lose a job. I tried to explain that while I sincerely feel for those folks, I rejoice that an organization becomes more efficient.
He’s saying that if we can afford to spend money on an earthquake or a war why can’t we spend it when there isn’t one?
I think it goes along the lines that money spent on things not earthquake repair are better spent. Opening a new business is better than repairing an existing one.
or as Krugman himself put it: Actually, this thing ties in with what I just wrote about anti-Keynesian switcheroos: the hoaxer was trying to make my (correct) assertions in the past that even useless spending can be expansionary sound as if I revel in disaster. Those who can’t argue rationally, resort to fakery.
Also, the gullibility on display was impressive. All these right-wing hacks knew it must be a genuine quote, because they all knew that I’m a terrible person — based on past distortions!
And I’d be willing to bet that this fake quote will continue to pop up on right-wing blogs and talk radio for years to come.
Update: Just to be clear: World War II was expansionary because it led to a large increase in public spending — and even so, that didn’t make war desirable! Meanwhile, natural disasters in America don’t lead to big public spending increases — look at how pitiful the aid post-Katrina was. If you think I believe that disaster is good for its own sake, you have drunk the Kool-aid.
or as Krugman himself put it:
Ack. I’m reading and replying in chrono. I see you saw before I did.
But to reiterate, even if that HAD been Krugman, I never would have thought he advocated for disasters.
I am a strong believer in true Keynesian economics. Keynes would have condemned running up debt during boom periods like the 80s and 00s. He thought that when you had a recession government spending might be necessary to turn things around and avoid a spiral downward as happened in the depression. When you have a boom it’s better for the government to cut spending and run surpluses, saving for the next recession. That makes sense because in a boom there should be few people needing government aid. Instead the world and especially the US has been anti-Keynesian for sometime, running up huge debts during booms, and setting up an unsustainable debt. By the way, if you want to read a really interesting description of the current crisis, try Matt Taibbi’s book “Griftopia.”
I am a strong believer in true Keynesian economics. Keynes would have condemned running up debt during boom periods like the 80s and 00s.
It certainly rings true in my personal life. Save during high cotton only to dip into savings during drought.
My problem with the whole concept is the distortion on the markets that government spending, or intervention, can have. We see what can happen when the government spends, like on ethanol. It distorts things and sends the wrong incentives.
If you want to learn economics, go to the individual States . We have 50 of them and the difference in their performances is striking . In fact if the morons in Washington would leave the States alone, the weak ones, generally run by liberals would fail . Everyone or almost everyone would leave the loser States and only the strong would survive. Unfortunately Obama, inc redistributes from the good to the bad .
The national unemployment rate is 9.1%. In North Dakota it is 3.3%. Earth to President Obama, take your freaking bus to North Dakota and ask them to teach you economics. You might take that over educated idiot Krugman with you .
We have 50 of them and the difference in their performances is striking . In fact if the morons in Washington would leave the States alone, the weak ones, generally run by liberals would fail .
I do think that the states most in trouble are those that are the most liberal; California, New York and New Jersey. And yes, people are leaving those states and moving to other more fiscal conservative states.
Unfortunately Obama, inc redistributes from the good to the bad .
Be careful on this one. Check this post out:
Point conceded. But did you ever look at the mortgage tax deduction per state ? National Review had an article about Liberal state populations benefiting from larger property values and thus larger deductions. California and New York with their inflated property values did well. But with your charts, I don’t see that .
But back to my central point . Jim Cramer had the Republican Governor of North Dakota on . 3.3% unemployment is amazing . A lot of that is the Bakken shale oil play . They also have great coal supplies and very low electricity costs . A real fossil fuel economy with farming thrown in . No green Keynesian economics , except maybe a little ethanol benefit .