Monday, March 8, 2010

Krugman does not even believe Krugman

Comments from By JAMES TARANTO in National Review, edits by Dean Kahalar

Economist Paul Krugman says this about government involvement in the economy.

Today, Democrats and Republicans live in different universes, both intellectually and morally. "What Democrats believe," he says "is what textbook economics says":

What does textbook economics have to say about the question of expanding governmental influence into the economy and their impact on creating jobs? Here is a passage from a textbook called "Macroeconomics"

Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker's incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of "Eurosclerosis," the persistent high unemployment that affects a number of European countries.

This "textbook" explanation was written by Paul Krugman and Robin Wells. Miss Wells is also known as Mrs. Paul Krugman. So it turns out that what Krugman calls the conservative point of view regarding government "stimulus" is, in fact, textbook economics.

It seems Krugman himself lives in two different universes--the universe of the academic economist and the universe of the bitter partisan columnist.

No comments:

Post a Comment