Paul Krugman, Keynesian Idiot: Part 4

Posted: May 28, 2012 by ShortTimer in Economic freedom, Economics, Government, Liberal Fascists, Music
Tags: , ,

Previously: Part 1, Part 2, Part 3.

Kyle Smith has a great piece at the New York Post ripping Paul Krugman’s latest book: “End This Depression Now!  We Need An Extraterrestrial Invasion!”  Well, the first part of that is the book title.  Really, it rips much of Krugman’s idiotic Keynesian philosophy, one that Krugman is even inconsistent with.

as a Keynesian, Krugman usually maintains that it doesn’t matter what you’re spending on, as long as you’re spending: Just shovel the bucks in the furnace, we’ll all warm ourselves by the glow.

Hence his “Independence Day” stimulus scenario: To you and me, that looks like a colossal waste of money on laser cannons that will never be used and will sit there rusting and burning up maintenance dollars for the next hundred years. But you and I aren’t geniuses like Krugman.

Blithely ignoring evidence that there have not been savage spending cuts in Europe, he continued making the same argument in his May 17 column, saying (he must have a hot key for this by now), “Europe’s answer has been austerity: savage spending cuts” (note he didn’t say tax hikes). Free-market economists (also known as the Austrian school, hence Krugman’s clever combo term for his enemies as “Austerians”) can hardly be blamed for Europe’s weak economies if those countries are doing the opposite of what Austerians prescribe, which is to cut out a lot of spending while reducing taxes.

And it gets worse, as Krugman gets worse.

Earlier this year Krugman wrote, “People think of debt’s role in the economy as if it were the same as what debt means for an individual: There’s a lot of money you have to pay to someone else. But that’s all wrong; the debt we create is basically money we owe to ourselves, and the burden it imposes does not involve a real transfer of resources.”

In 2003, when the debt was less than half what it is today, he wrote, “We’re looking at a fiscal crisis that will drive interest rates sky-high . . . But what’s really scary — what makes a fixed-rate mortgage seem like such a good idea — is the looming threat to the federal government’s solvency . . . How will the train wreck play itself out? . . . My prediction is that politicians will eventually be tempted to resolve the crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt.”

Inflation to pay current bills, a reference to hyperinflation, is exactly what he would later ridicule Kinsley for worrying about.

In 1996, Krugman (who, as Wall Street Journal blogger James Taranto never tires of reminding us, is a former Enron adviser) said Social Security has a “Ponzi-game aspect in which each generation takes out more than it put in.” Last year he said it “is and always has been mainly a pay-as-you-go system, which is nothing like a classic Ponzi scheme.”

Of unemployment benefits, Krugman wrote in his textbook that “The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job.” Later he ridiculed Sen. Jon Kyl (R-Ariz.) as “bizarre” for saying, “Continuing to pay people unemployment compensation is a disincentive for them to seek new work.”

Krugman rejects the things he once wrote in his own book.  That’s back there in part 2, but once again, it’s a glaring example of an “economist” who’s really an inconsistent hack bent on pushing for more spending.

How Keynesians feels about government spending.

And MOAR stupidity is provided:

This month Krugman gave us a great summation of why he refuses to even stick to one set of wrong-headed ideas. He has a short attention span, like politicians focused on the next election cycle.“It’s usually far from clear,” Krugman wrote, “what exactly the long-run policy is supposed to be, other than the fact that it involves inflicting pain on workers and the poor.”

See, Paul, a free market system means you take care of yourself, because you know what’s best for you.  You get to keep more of your money, you get to spend it where you like it, and the poor and the suffering get to keep more of their own money and spend it how they like.  Since they keep more, so do other people who want to expand their businesses (and even charities) which helps out those who are working their way up.  The long-run policy of a powerful state will keep the proletariat down, because if the poor proletariat becomes the well-to-do bourgeois, then there’s nobody for the socialist to save.

You knew Krugman was just building up to a one-liner, the one that showed how careless he was about consequences: “In the long run, we are all dead.”

This is a trademark Keynesian phrase, a cop-out, and a weak, pathetic retort.  The effect of “in the long run, we’re all dead” is hedonism, selfishness (not in the Randian self-improvement kind, either), destroyed morality, and chaos.  It’s an excuse for failure that ignores that future generations will ultimately have to deal with their progenitors’ problems.

It’s a philosophy that ultimately rejects the idea of improvement of human condition.  It believes there are limited resources, limited capacities for the human mind, limited abilities, and that governments manipulating money and people is the best way to go… and if it fails, who cares?  There’s no improvement of humankind, there’s only destruction.  There’s only suffering and pain for the workers and the poor, that’s the only long term goal.

That’s not so much Keynesianism as it is nihilism, though.  After all, Keynes wouldn’t have supported the kind of spending and systemic debt that we’re dealing with today.  He knew better.  But the modern Keynesian knows it will fail, and flippantly ignores it.

Perhaps especially today, on Memorial Day, it’s worth noting that some people believe in something, and they believe in future generations and making a great country and a safe world for them.  “In the long run, we’re all dead” is the defeatist drivel of a coward who refuses to make tough choices today.

  1. […] of hits on prior Krugman pieces; notably Paul Krugman, Keynesian Idiot parts One, Two, Three, and Four. We’re coming up on the second anniversary of my piece “Myths of Austerity“, in which I tried […]

  2. […] is still a hugely popular post.  There are now three more parts: Paul Krugman, Keynesian Idiot Part 4, Part 5, and Part […]

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