Tag: Paul Krugman

Categories
free trade & free markets national politics & policies

Competition Works Even With Limited Info

Few of us understand all our options when we shop for homeowners’ insurance.

The New York Times’s Paul Krugman riffed on this, arguing that “When people call for ‘consumer choice’ in health care, what this mainly comes down to isn’t comparison shopping on actual care . . . but rather comparison shopping on insurance policies. And that’s basically impossible even for home insurance, which is a lot simpler than medical insurance.”

Krugman calls a free market in medical insurance “fantasy.”

Yet the illusions involved in buying insurance also apply to non-market medical coverage.

Consider: Most people with low-price insurance like their coverage at least so long as they don’t have to make many claims against it. That’s because insurance is one of those things you buy hoping not to have an occasion to require it.

Something similar happens in single-payer medicine. Some Europeans (especially the young and healthy) praise their state systems that cost them next to nothing out of pocket, patching up their scrapes, mending their bones “for free.”

But wait till they are old and really sick, and on a multiple-month waiting list for an MRI or cancer treatment. Rationing-by-waiting can be a killer.

Bottom-line this: In a competitive insurance market, on learning of poor performance by your carrier, you can drop your insurer like a hot potato. In single-payer systems, you’re stuck. In line. Hoping not to get something too taxing on the system.

But you do have a choice in coffins.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets ideological culture national politics & policies

Study War Some More?

Some people love spending so much they’d kill to do it.

A while back, Paul Krugman, today’s leading Keynesian shill, trotted out the old chestnut that World War II brought America out of the Great Depression. In The Freeman: Ideas on Liberty, Steve Horwitz provides a concise, reasoned response:

Wealth increases when people are able to engage in exchanges they believe will be mutually beneficial. The production of new goods that consumers wish to purchase is the beginning of this process.

And borrowing from future generations to spend on goods not connected “to the desires of consumers, but rather to the desire of the politically powerful” doesn’t work.

Krugman talks war not because he wants one, but because he thinks government spending is so important that he’ll take what he can get, “even if the spending isn’t particularly wise.”

He misses the point.

The malaise that holds back recovery after a shock like the Implosion of 2008 isn’t lack of spending as such — it’s lack of confidence. Capitalism depends on trillions of separate plans and desires working together. When investors are wary of investing and consumers — fearing the future — don’t know what they can really afford to buy, no amount of “jump start” splurging will repair the engine.

At the end of World War II conscripts were freed, wage and price controls were abandoned, and a sense of victory permeated everything — and the Great Depression ended. Finally.

The lesson? End wars. Curtail regulations. Free up the system.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets ideological culture

Three Cheers for Robert Murphy

Here’s something worth three cheers. Possibly four.

Robert Murphy is a prolific young economist of the free-market “Austrian” school of economics, which has a vibrant online presence at Mises.org, the website of the Ludwig von Mises Institute.

In October, Murphy decided to challenge Paul Krugman, the prominent economics professor, author and New York Times columnist, to a debate on Keynesian versus Austrian business cycle theory. After all, as Nobel-Prize-winning economist and partisan left-wing scribbler, Krugman tends to insist on policies the opposite of what any reasonable economic conclusion might be.

Krugman’s extremist, Big Government über alles positions should make for a great fireworks display in a well-attended debate with the scrupulously sane and reasonable Murphy. Point-counterpoint. The debate would also be a great venue for Murphy to publicize the sorely needed Austrian explanation of why massive governmental perversion of capital structure and market incentives ain’t exactly the best way to foster economic growth.

Murphy launched an Internet campaign, complete with goofy (and funny) animated YouTube video, to pressure Krugman. Murphy is asking folks to pledge a sum to the Fresh Food Program at a New York food bank that would be collected only if Krugman does debate him.

At last count, pledges have topped $50,000.

I hope Krugman agrees. Feeding hungry people is a good cause, and so is saving the economy from annihilation by Krugmanesque economics.

Meantime, give Murphy at least three huzzahs for pluck.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies tax policy too much government

Social Security Beyond Retirement Age

Social Security turned 75 last week, and yet I saw few demands to retire the program.

Instead, pundits like Paul Krugman took the occasion to praise the septuagenarian boondoggle.

Krugman started boldly, saying that the program “brought dignity and decency to the lives of older Americans.” Huh? Social Security has indeed brought a steady income to retired Americans, many of whom would have had to rely on their children’s help to live out their last years. But Krugman doesn’t say that. Instead he implies that, before Social Security, old folks led indecent and base lives.

But think about this: Saving for yourself and living on a limited means is indecent? It lacks dignity?

Krugman also talks about the economics of the program, defending, for instance, its dual accounting method in a bizarre way. But mostly he steps carefully around Social Security’s biggest failings, which include the intergenerational swindle, providing bigger rewards-over-contributions to earlier retirees than to current recipients, and, by its nature, will take more from, and give less to, future retirees.

Most shockingly, though, he says this: “Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund.”

Krugman does all but state that the special account has money in it.

It doesn’t. The “trust fund” consists of IOUs from Congress. That’s it.

I guess Social Security is a program too important to Krugman to tell the truth about.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability free trade & free markets too much government

Krugman’s Crazy Crotchets

Paul Krugman is getting sillier and sillier these days. He’s supposed to be an economist, and not long ago some people in Sweden gave him an award for his economic work. So why would he suggest that economic incentives just don’t matter?

The New York Times columnist bashed Republican Senator Jon Kyl for stating that generous unemployment benefits can reduce the incentive to look for new work. Krugman says that this isn’t the textbook view of things shared by himself and the Democrats. “What Democrats believe,” Krugman says, “is what textbook economics says.”

Gee. So what does textbook economics say?

James Taranto of the Wall Street Journal actually checked a textbook in economics. According to this textbook, “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.”

Interesting. So who wrote this textbook? Yes, that’s right: Paul Krugman.

This partisan fellow, Krugman, often seems to go out of his way to be contradictory as possible. Does he believe his own babbling? Or is he just trying to get a rise out of us?

Or is it to please his editors over at the Times?

Call it an economic incentive.

This is Common Sense. I’m Paul Jacob.

Categories
insider corruption

Standards of Behavior

When it comes to standards, how low can we go?

Congressman Charlie Rangel had failed to report more than half a million on his congressional financial disclosure forms, violated rent control laws in New York, taken corporate-funded junkets, and more. After being admonished by the House ethics committee, he has finally decided to take a leave of absence as chairman of the powerful Ways & Means Committee.

But before he stepped down, some excused him. House Speaker Nancy Pelosi argued that Rangel’s behavior “was not something that jeopardized our country in any way.” New York Times columnist Paul Krugman said, “It is worth pointing out that none of these things actually seem to affect national policy.”

Oh, goody! He didn’t destroy the entire country!

Then there’s a local scandal in Washington, D.C. Former crack-mayor, current Councilmember Marion Barry allegedly earmarked his girlfriend a $15,000 city contract and then took a kickback from her. The council just censured Barry.

But Washington Post columnist Courtland Milloy notes that people in Barry’s 8th Ward are dying of AIDS at an alarming rate, while money appropriated to help has vanished. He writes, “If Barry did take a kickback from his girlfriend, they say, it didn’t result in somebody’s death. So why should he face censure when those who stole the AIDS money got away clean?”

He didn’t kill anyone: Our new standard for ethical behavior. Really?

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies

Treason and Terrorism and You

All tyrants love unlimited government. But do all advocates of unlimited government love tyranny? Well, recently major fans of big government sure have been blurting out their hysterical hatred for normal democratic disagreement.

Take Paul Krugman, New York Times rah-rah boy for humungoid government. He recently referred to opposition to the cap-and-trade bill as “treason against the planet.”

Treason, really?

Since the consequences of that policy for the food supply will almost certainly further raise worldwide prices, economist David D. Friedman asked whether Krugman himself isn’t committing some kind of murder: Because of policies Krugman pushes, thousands more will likely starve to death.

But if you think Krugman’s rhetoric is overblown, get a load of California Assembly Speaker Karen Bass. In an interview in late June, she objected to Californians who influenced their Republican representatives to vote against “revenue” — her word for tax increases. She said, and I quote: “I don’t know why we allow that kind of terrorism to exist. I guess it’s about free speech, but it’s extremely unfair.”

Yes, the Democrats’ leader in the California Assembly referred to that special feature of representative democracy commonly known as “free speech” as “terrorism.”

Krugman and Bass need an education on basic terms. I guess it’s up to us to provide it.

If this be treason — or terrorism — make the most of it.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

He Should Have Pleaded the Fifth

Economists tell tales.

The best are those that make it easier for us to understand very complicated ideas. Paul Krugman, a Nobel Laureate, wrote one such tale years ago, an essay called “Ricardo’s Difficult Idea.” It explains something economist David Ricardo discovered nearly 200 years ago: When nations trade they both become better off even when some people seem to suffer.

Since that essay Krugman has been telling tales for the New York Times. Not all have been as wholesome.

Krugman appears to be one of those court wizard economists who believe they — that is, the government — can fine-tune the economy. In his August 2, 2002 column he says that “[t]o fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that . . . Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

Yes, back in 2002 Krugman supported the Fed’s super-low interest rates, and predicted the outcome: A housing bubble.

Which has burst.

Since then, Krugman’s readers have looked for someone to blame. Well, Krugman’s own words give us all we need to incriminate his own very self . . . and his fellow court wizards.

Familiar story: Self-aggrandizing experts aim to fix things, and put us all in a fix. The case against government management of the economy just got even stronger.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets

When Good Economists Go Bad

It is weird to watch respected economists leap so far off the beam that you question their sanity.

The number who supported the federal bailout made me shake my head. I guess economists can panic, too, get all doe-eyed in the face of a power grab.

My confidence in sanity returned when I read Nobel Laureate Vernon Smith’s amazingly insightful article in the Wall Street Journal. He argued that the Treasury Department has now committed itself to a kind of auction with which it has no demonstrated competence. Smith’s practical take on the bailout folly reminds me of another Smith, Adam, way back in 1776, explaining why markets work better than governments to create the wealth of nations.

Then, a few days later, Paul Krugman received the Nobel Prize for Economics.

I had read Krugman years ago, and was impresssed with his good sense. But then he began writing op-eds for the New York Times, and, uh, I began questioning his sanity. On so many issues he seems to believe that the best government governs most. And he’s a very pro-Democratic Party partisan.

It is worth remembering, though, that Krugman is a left-winger who supports free trade, attributes Europe’s high unemployment to wage regulations, and regards anti-globalization activists as enemies of the world’s poor.

Maybe his new prize will remind him of his good sense. He might even rethink his allegiance to Party.

This is Common Sense. I’m Paul Jacob.