This was my fav:
A key fallacy of mainstream economics today is its belief that all economic activity is good activity. Quality doesn’t matter. We must “stimulate” the economy to get those GDP numbers up, and all will be better. It doesn’t matter if we rack up endless debt, only to pay people to dig holes and re-fill them or to re-build cities destroyed in war.
It sounds like I’m exaggerating, doesn’t it? Many economists would scoff that I am. Except I’m not.
For example, Paul Krugman and other neo-Keynesian economists claim often (and wrongly) that the destroy-and-spend of World War II is what pulled the world out of the Great Depression. Krugman has called for housing bubbles and fake alien invasions on more than one occasion, and only half-jokingly at best.
Or we have the recent movement to count illegal activities (drugs and prostitutes) as part of GDP. It got another little boost when Spain signed on. (By counting illegal drugs and prostitution as part of its GDP, Spain can reduce its official debt-to-GDP ratio, making its finances appear sounder than they are.)
I believe that all of this speaks to both the deep Statism and the deep nihilism that have infected modern culture. The implication – that economists never state outright because they know it would sound too crazy, but the implication remains – “Gee, if only the government would spend on destruction, the economy would boom. If only people would buy more meaningless sex and drugs, the financial system would be sound.” As if those are productive activities.
Again, put like that, it sounds like I’m drawing a caricature; but I’m not. A recent example is from the New York Times, a serious opinion pieced titled The Lack of Major Wars May Be Hurting Economic Growth. It begins: [Read more…]
Zero Hedge remembers how the Great Housing Bubble of 2003-7 was something Paul Krugman had called for:
Before you say “But that was in 2002!”, consider more recent examples of Krugman stupidity, like his calling in 2012 for the government to boost (supposedly) the economy by faking an invasion of space aliens. The Krugtron quote from Time’s account:
“If we discovered that space aliens were planning to attack, and we needed a massive build-up to counter the space alien threat, and inflation and budget deficits took secondary place to that, this slump would be over in 18 months,” Krugman says…
A second instance, from PuffHo’s account:
“So if we could get something that could cause the government to say, ‘Oh, never mind those budget things; let’s just spend and do a bunch of stuff.’ So my fake threat from space aliens is the other route,” Krugman said before a laughing crowd. “I’ve been proposing that.”
So he said it more than once; only half-joking at best. The man loves his malinvestment.*
(*Borrow-and-spend that creates market bubbles, overbuilding, leaf-raking, wars or other activity that is economically inefficient, or useless, or even destructive.)
Related: It struck me that one way you can tell a left-liberal is: government spending always sounds like a good idea, to them. Should government spend, to stimulate the economy? Check. Spend more on education, so people will (supposedly) be more educated? You betcha. It never occurs to the left-liberal that government just might be incompetent at most things. So that the proposed spending would do nothing at all – or would even make things worse, as it only subsidizes incompetence. For example: Subsidizing an incompetent system of educators. The possibility just doesn’t cross a liberal’s mind.
In the last two weeks, Huffington Post (to its credit) has published a 3-part takedown of the noxious New York Times columnist, Paul Krugman, by the fetching economic historian, Niall Ferguson:
It’s long, but I found it a pleasure on several levels. Ferguson is a civil human being (see the video at the bottom of part I) and always an engaging and thoughtful writer. And Krugman merits the takedown, as a writer who habitually over-states his own rightness and denies his past mistakes (such as his 2002 call in favor of having a housing bubble). Krugman recently called himself “Krugtron the Invincible”, which Ferguson adopted as the title for his series.
For fun, here’s Dilbert from June 3: