Free Markets, Free People
Krugman and Pelosi – two peas in an economic pod
Remember a few days ago I pointed out how Nancy Pelosi was out and about claiming that unemployment benefits was the greatest job creator in the world?
Well guess where she probably got it from – Paul Krugman?
Wait: there’s more. One main reason there aren’t enough jobs right now is weak consumer demand. Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending. That’s why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly — while allowing that aid to lapse, which is what is happening right now, is a recipe for even weaker job growth, not in the distant future but over the next few months.
I won’t bother you with the reasoning that says this is absolute nonsense – that was covered in the Pelosi post. What’s surprising is how desperate Krugman is to have his way with increased deficit spending – to stoop to this level of argument. Suffice it to say, this doesn’t increase “consumer demand” or support “consumer spending”. Unemployment benefits are a fraction of what the household was making before so what it goes toward is the maintenance of necessities and not much else.
To see a Nobel prize winning economist reduced to this – a political hack – is rather revealing. It certainly, at least in my mind, makes everything he writes that is purportedly about his specialty suspect. If this is his argument, then he hasn’t got an argument, and if you read the rest of his screed you’ll discover it is only an excuse to attack the GOP – falsely, of course.
Krugman has all but ruined his reputation as an economist with nonsense like this. Of course when a person becomes identified with the clueless, like Nancy Pelosi, and their arguments, the decent into full “hackery” is complete.