The Amazing Krugman

14 November 2009 at 10:15 am 10 comments

| Peter Klein |

The man indeed has a unique talent, as described here by the witty and clever Steve Landsburg:

It’s always impressive to see one person excel in two widely disparate activities: a first-rate mathematician who’s also a world class mountaineer, or a titan of industry who conducts symphony orchestras on the side. But sometimes I think Paul Krugman is out to top them all, by excelling in two activities that are not just disparate but diametrically opposed: economics (for which he was awarded a well-deserved Nobel Prize) and obliviousness to the lessons of economics (for which he’s been awarded a column at the New York Times).

It’s a dazzling performance. Time after time, Krugman leaves me wide-eyed with wonder at how much economics he has to forget to write those columns.

The subject is Krugman’s latest proposal to combat unemployment, namely laws making it harder to fire workers, which of course increases the cost of labor, leading firms to hire less of it, increasing unemployment.

Entry filed under: - Klein -, Myths and Realities, People.

Fed Independence and Comparative Institutional Analysis What Would Peter Say?

10 Comments Add your own

  • 1. The Amazing Krugman « Daniel Joseph Smith  |  14 November 2009 at 11:24 am

    […] The Amazing Krugman […]

  • 2. Caminadella  |  14 November 2009 at 11:55 am

    Uh? What I read in Krugman’s column is “policies [that] could range from labor rules that discourage firing to financial incentives for companies that either add workers or reduce hours to avoid layoffs”. How is this equivalent to “laws making it harder to fire workers”?

  • 3. simone  |  14 November 2009 at 11:56 am

    Krugman is an ideologue who cares little for reality or the truth.

    Sad that he chooses to behave in such an unprofessional manner.

  • 4. Tom Woods  |  14 November 2009 at 12:26 pm

    Caminadella: The part you quoted about “labor rules that discourage firing” probably covers it.

  • 5. Caminadella  |  14 November 2009 at 12:32 pm

    Probably not. In the article Krugman mentions Germany’s short-time work scheme, “which provides subsidies to employers who reduce workers’ hours rather than laying them off”. Of course there are excellent arguments against subsidies, but they are not the same thing as making it harder to fire workers. And of course subsidies do not raise the cost of labor.

  • 6. Steven Horwitz  |  14 November 2009 at 2:01 pm

    Someone needs to ask Krugman if he supports tougher divorce laws as a way to encourage marriage.

  • 7. Peter Klein  |  14 November 2009 at 3:37 pm

    Caminadella, it depends on the magnitude of the subsidy relative to the cost increase associated with the short work week, job guarantee, or whatever. A gross subsidy may not be a net subsidy.

  • 8. Rafe Champion  |  14 November 2009 at 3:57 pm

    I suppose Krugman is one of the five Nobel winners along with some hundreds of other economists who signed a petition in favour of higher minimum wages. Or is that an urban myth?

  • 9. Per Bylund  |  14 November 2009 at 5:44 pm

    Rafe, you’re probably thinking of this statement, which was signed by 665 economists including Ken Arrow, Bill Baumol and Joe Stiglitz.

    Krugman was not one of them, however.

  • 10. REW  |  15 November 2009 at 10:57 am

    Oops! I thought the quote was from the witty and clever Steve Landesberg, who brought us: “Honesty is the best policy, but insanity is the best defense”. ;-)

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