Is no one suprized that the administration’s finest minds are not accountants but creative writers?

E

“The beatings will continue, until morale improves.”

Here’s an article by an actual economist (Ed Lazear, smarter than Krugman, but then, who isn’t?) asking this very question in today’s Wall Street Journal:

Stimulus and the Jobless Recovery
Jobs ‘created or saved’ is meaningless. What matters is net job gain or loss, and that means the unemployment rate.

[Solid growth will continue only if private spending takes up the baton as the effect of the stimulus fades. And so far there’s no sign that this is happening.]

Isn’t the point of stimulus to “stimulate” the private spending he is admonishing to “take up the baton”? If the “effect” of the stimulus is fading, then it didn’t have much “effect”, did it? He admits as much in that last quoted sentence. I don’t read Krugman anymore, but let me guess for all our amusement, his prescription for fixing this little problem is yet more stimulus. Do I win the prize?

The answer is none, because no funds were borrowed from US banks. Instead, the funds were created out of thin air and eventually will result in either inflation or increased borrowing from foreign nations (predominantly China).

However, there were indirect job losses due to business concerns about our national debt and expected future tax increases. It’s impossible to calculate these losses.

And, Yoshidad, Krugman sold his soul to Democratic interests years ago. The fact that previous work won him a Nobel prize means nothing when his recent writings are almost all crap.

[Solid growth will continue only if private spending takes up the baton as the effect of the stimulus fades. And so far there’s no sign that this is happening.]

Because, just as with CO2 in the climate, government spending will trigger positive feedback and snowball private economic activity along with it real soon now.

Krugman (and Keynes) provide nothing more than extra examples of the same sort of thinking. But more dangerous. Because they involve guns. They involve worship, too, since they insist gov’t can create by fiat. Faith in that failed god does not die despite evidence of disaster. (Note how Yoshidad ‘believes’ gov’t fiat econ activity creates wealth = creates more wealth than it (consumes + displaces)). Krugman, rather than recognizing how FDR’s econ policies extended the depression, insists that WWII deficit spending cost nothing but gained everything. That’s faith contrary to fact.

Government confiscating money and using it for the purpose of economic stimulus is not a zero-sum game, it is a negative-sum game. The political incentives involved in the process make it impossible for government to make decisions as efficient as those of even irrational actors on a level playing field in a free market. The Keynesian hypothesis ignores this problem of information and incentives. When those are taken into account, the Keynesian hypothesis of economic stimulus is roundly proven false. The current employment situation is just another example of this playing out, as private employers wait for the economic situation to stabilize before bringing on new employees.