Krugman blames Republicans, whom he terms "heartless":
By the heartless, I mean Republicans who have made the cynical calculation that blocking anything President Obama tries to do — including, or perhaps especially, anything that might alleviate the nation’s economic pain — improves their chances in the midterm elections.The only problem is that Krugman ignores that Republicans were in favor of extending benefits by taking the money from elsewhere in the budget, including unused stimulus funds. It was the Democrats who balked at this solution, insisting on running up more debt. So the entire premise of Krugman calling Republicans heartless amounts to nothing more than a fiscal policy dispute. Why aren't Democrats heartless for not going along with the Republican proposal?
Next, Krugman terms "clueless" people like Sharron Angle who have mentioned that the welfare state, including unemployment benefits, can create a disincentive for people to take jobs they otherwise would not take. Krugman admits that this is a real phenomenon:
Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits aren’t quite as desperate as workers without benefits, and are likely to be slightly more choosy about accepting new jobs. The operative word here is “slightly”: recent economic research suggests that the effect of unemployment benefits on worker behavior is much weaker than was previously believed. Still, it’s a real effect when the economy is doing well.Krugman says this phenomenon is irrelevant in a bad economy, but once again he ignores that Republicans were willing to extend benefits if the benefits were paid for in the budget, not paid for with more money borrowed from China. So who is the clueless one?
Last, Krugman views unemployment benefits as immediately stimulative in the economy, because the money will be spent. That's a fair point, which is why it makes sense to use stimulus funds for this purpose, rather than propping up bloated state governments and union contracts. So Krugman's point actually defeats his point.
Back to the title question. Is Paul Krugman heartless, clueless or confused?
Yes.
Update: Donald Douglas has a Surprise! Republicans 'Racist' for No Vote on Unemployment Extension.
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Since when do you expect any left wing editorialist at the NYT to be upfront and honest? Ever read Kristof, now there's a rhetorical donkey if there ever was one.
ReplyDeleteThe dems talking point, per Pelosi, that the "unemployment benefits stimulate the economy" just doesn't ring true to me. Unemployment barely pays for your mortgage/rent/groceries/utilities. That money, to me, seems like normal monthly income to the economy. Nothing extra - so, wouldn't the benefits, at best, just keep the economy flat? And if people weren't paying those basic normal monthly expenses, then I could see the economy take a dip, but not an increase.
ReplyDeleteAnd honestly, if the money does stimulate, because people are purchasing above and beyond their basic normal expenditures, then I don't think they need the unemployment benefits anyway.... :OS
As for Angle's argument, she is right. I knew many people throughout the years that didn't search as hard for jobs because they were getting unemployment. They were more picky, lie about sending out resumes, and don't take jobs they consider below their pay grade. It's a flat out reality. When I got laid off once, the temp agency told me to lower my $/hour rate and I would find a lot more jobs, so I ended up doing remedial office work and reception work, even though I had long ago passed that level. But, it was a job. I knew people who would never do that, but preferred to take unemployment checks. And if I knew that many people who did that, then it is happening all across the country.
Also, I just heard Jorge Ramos denying that people would take the jobs held by illegals. I don't believe that, either. They hold jobs in the hotel, construction, and restaurant industries, as well as farming. As someone who has worked in all of those, but construction, there is NOTHING wrong with those jobs! If people refuse to work in those industries then they don't deserve to receive unemployment benefits.
"Partisan Hack"
ReplyDeleteAnswer: none of the above.
ReplyDeleteHe is a propagandist, doing his level best, Julius Streicher-style, to demonize a relatively small band of citizens.
In this case, he attacks conservatives first, last and always, which makes his column little better than Streicher's for accuracy.
Er, the for now unused stimulus funds should be applied for more job creation. When you have 9.5 per cent unemployment, all stimulus funds should be applied toward job creation.
ReplyDeleteFor the love of Pete, how difficult is that for wingnuts to understand?
Krugman is a dishonest ideologue who uses his article for propaganda purposes. He knows full well the GOP was not opposed to extending benefits but just wanted them paid for. Krugman is a very dishonorable man.
ReplyDeleteThere is a big difference between the old Keynesians and the Neo-Keynesians. The old Keynesians were more precise in defining their economic tools. The Neo-Keynesians make no distinction between government spending targeted for sustaining and growing bloated government bureaucracy, particularly the bankrupt state bureaucracies targeted by the porkulus spending, versus spending targeted to create job growth in the private sector. Big global government and the new power that comes with it, is the desired end. A global economy will never be robust because we are throwing out the "hidden hand" of private innovation that comes from properly regulated free markets.
ReplyDeleteTheir methods are the same as those of the global warming (now climate change) "scientists". You begin your quest on a solid foundation of science or academia and then make a beeline to the end zone while bypassing scientific process or academic discipline. These guys have corrupted everything they have been involved with.
If you hired these guys to fix your expensive Swiss watch and gave them a the delicate specialized tools to work with, they would use every tool like it were a sledge hammer. In the end, they hand you your smashed watch, tell you it was your fault and then explain that you are better off without it anyway.
If I had to pick only one, I'd pick clueless.
ReplyDeleteCLUELESS
ReplyDeleteI just want to say I really like your blog! Keep up the great work...
Steve
Common Cents
http://www.commoncts.blogspot.com
Come on, guys. Krugman is a Nobel prize winner, just like Obama, so he can't be clueless.
ReplyDeleteUncle Paulie knows the federal government is so efficient it operates like a well oiled machine. Therefore, there just can't be any spare change floating around in the $3,500,000,000,000.00 federal budget that could be used to help the unemployed. We've got to stimulte the economy by sending stimuls checks to prisoners and spending money to conduct research to see if college co-eds sometimes hook up after drinking. Shovel ready, baby.
So, it's obvious to any Nobel winner worth the weight of his prize medal that the only possible solution is to borrow the money from Hop Sing and hand the debt to our kids and grandkids and tell them how grateful we are that they're going to pay it off.
If only you guys were Nobel prize winners, you could see the wisdom in it all.
Thanks William!
ReplyDeleteAmerican Power linked back with, 'Surprise! Republicans 'Racist' for No Vote on Unemployment Extension'.
From a mediocre economist (yes I have a degree in economics) I think that Krugman is clueless.
ReplyDeleteI agree with the take given by Pasadenaphil. Also, I do not believe that if Keynes were alive today that he would agree with Krugman and co...
Sharron Angle is correct with her comment about unemployment benefits creating a disincentive. There are other nations e.g. the U.K. and Australia that have long term unemployment. I can speak to the situation in Australia since I am more familiar with regards to how disincentives are created. On the other hand, I am well aware that in the U.K. unemployment and the receipt of benefits is a generational thing.
The disincentives are created because of the extra perks that are offered to the unemployed - different rates for childcare, transport, medical etc. etc. What this means that when work is offered and there is no more unemployment benefit the perks disappear, and that means that the cost of the perks must be added into the equation. It is often better to receive the unemployment benefits than to take work that pays a few dollars extra than the fortnightly benefit. I guess Krugman has never experienced such a thing or is unaware that people do make choices based upon what they have to give up in order to take a real job.
Unemployment money is not close to enough to 'stimulate' the economy. Getting people back to productive work and getting regular wages stimulates the economy. Spending by itself does not solve the problem. Giving 20 dollars to a penniless man and then his spending it does not improve the mans standing and a paltry 20 dollars will not make any ripple in the economy. 500 million penniless folk spending 20 dollars will still not make a ripple an a huge ecnonomy such as ours.
ReplyDeleteA bad economy, contrary to what Paul says, makes the unemployment incentives to stay unemployed worse. People who in an otherwise good economy might have tried to get off unemployment, now figure that they either can't get a job or/and that getting a job in a bad economy is just not worth it since they are getting all this free money and perks.
And just because the "Neo-Keynesians" are even stupider than the old Keynesians means nothing. Keynes may not have been as "imprecise" as Krugman, but he was still a government loving anti-free market drip.
Oh, and carib, government spending can't "create" jobs, it simply takes jobs out of the private sector and ensconces them within the government where they contribute little to the economy or society. What part of that don't the moonbats understand?
"When you have 9.5 per cent unemployment, all stimulus funds should be applied toward job creation."
ReplyDeleteSo, our government shouldn't spare any cash from building underground turtle tunnels and funding studies of breast size to give to the 9.7. unemployed while they wait forever for 'jobs' for all of them to be magically created from all this, instead they should give that money by accumulating our future debt instead?
We're not "wingnuts," you're a moonbat.
Also, if job creation should be the main goal, why extend unemployment benefits and money at all? Why not take all that money and add it to the "stimulus fund?"
ReplyDelete