Krugman: Celebrate Choices That Ruin Lives, If That's What Big Government Wants

Paul Krugman’s (Health, Work, Lies) reveals he does not understand this most basic principle of economics. He seems to think that the choices people make under screwball government regulations will make them better off – as long as no one is forcing them to make these choices. Per Krugman, bad choices motivated by bad incentives are to be celebrated not sympathized!

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Why The Financial Press Buys Into A Non-Existent Keynesian Consensus

Few Wall Street Journal readers know that its news and opinion sections are written and managed separately. Whereas the opinion section – as edited by the late Robert Bartley and now Paul Gigot – consistently champions fiscal discipline, smaller government,  and lower marginal tax rates, analysts from the Journal’s news side – David Wessel and Gerald Seib, in particular – are consistent proponents of Keynesian tax and spend policy. That the news section delivers conclusions at odds with the opinion section puts the Journal at risk of an errant headline like: “The Wall Street Journal Says Keynes Was Right.”

David Wessel consistently represents the Keynesian party line in the news section. In his most recent analysis, his conclusions about the effects of the sequester coincide with none other than the New York Times’ Paul Krugman. Although Wessel’s language is more restrained, their conclusions boil down to one and the same.

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‘Austerity’ To Blame? But Where’s The Austerity?

Die-hard Keynesians bemoan that, with a few exceptions, the world’s economies are drowning in the quicksand of austerity. They preach we need more government spending and stimulus, not less. Northern Europe should bail out its less-fortunate neighbors to the South so they can pay their teachers, public employees and continue generous transfers to the poor and unemployed. If not, Europe’s South will remain mired in recession. In America, Keynesians entreat the skinflint Republicans to loosen the purse strings so we can escape sub par growth. They advise Japan to spend itself out of permanent stagnation and welcome recent steps in this direction.

 


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Krugman’s Malarkey: “Death by Ideology”

Paul Krugman argues in his Death by Ideology  that “lack of insurance is responsible for thousands, and probably tens of thousands, of excess deaths of Americans each year.” Romney and Ryan, he claims, “want to repeal Obama care and slash funding for Medicaid — actions that would take insurance away from some 45 million nonelderly Americans, causing thousands of people to suffer premature death.” Moreover, any plan to replace Medicare by vouchers “would deprive many seniors of adequate coverage, too, leading to still more unnecessary mortality.” And what if the amount of money in a “voucher care” program were not enough to buy a decent policy? Krugman lectures that “going to the emergency room when you’re very sick is no substitute for regular care, especially if you have chronic health problems.”

It would be good if Krugman did a little gathering of facts before he writes.  If he had read my Krugman’s Sick Numbers, he would know that there are virtually no uninsured poor, that most of the uninsured are relatively young and can afford health insurance but choose not to. For them, health insurance is simply not a good deal. He seems not to know that those who substitute the emergency room for a regular physician are primarily those on the government Medicaid program. They are insured but few medical care providers want the measly fees the government offers them.

As an economist, Krugman should know that the real question is not whether there would be enough money in a voucher program “to buy a decent program.” Instead, he should ask, based on developing experience, whether government health insurance programs offer providers enough money so that they do not have to treat the government insured at a loss? If this is the case, the poor will not be able to get a doctor. Judging from the emergency room visit statistics, that is exactly what is happening.

Could it be that government insurance is “death of ideology?”

Krugman’s Sick Numbers

In his Romney’s Sick Joke, New York Times columnist Paul Krugman makes the sky-is-falling  claim that 89 million Americans under 65 “would be left out in the cold (without health insurance) under Mr. Romney’s plan…By the way, that’s more than a third of the U.S. population under 65 years old…. Another answer is 45 million, the estimated number of people who would have health insurance if Mr. Obama were re-elected, but would lose it if Mr. Romney were to win.”

I am surprised that Krugman did not tell us how many Americans Romney would allow to die so that he could “cut taxes on the wealthy.”

Politicians, especially liberals, have a nasty habit of creating government programs to solve problems, without knowing whether the problem exists, and, if it exists, how big the problem is. Obama Care was passed, without a Republican vote, to solve a long list of problems – the uninsured poor, those with existing preconditions, the lack of universal coverage, soaring health care costs, and so on – that seems to change with political convenience. According to Krugman, the health-care crisis now is preexisting conditions and Romney’s heartless cuts to Medicaid.

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Challenge for the American Left: Go on Record For Hollande's Socialist Program

During the French presidential campaign, pundits assured us that Francois Hollande was simply playing to his socialist base. Once in office, he’d prove to be a pragmatist. All his talk of 75 percent income tax rates, wealth surcharges, infrastructure banks, new taxes on dividends, hiring more public employees, not giving an inch on entitlements, and punishing the financial sector was just talk. Two months later, we know Hollande meant every word. Armed with a solid parliamentary majority, he is carrying out his socialist agenda, no holds-barred.

It is time for our anti-austerity, pro-stimulus, and ueber-fairness crowd to go on record in support of Hollande. I’d like to count them when the French economy goes down the toilet, as it certainly will unless Hollande changes course.

The American Left counts among Hollande’s many cheerleaders. At long last, a leader of France is standing up to the austerity crowd. Liberal New York Times columnist, Paul Krugman, rails against the Hollande hysteria of the staid Financial Times and the stingy Germans. Per Krugman: we need not fear someone who genuinely believes in the need for a fair society, and we know the mess we get into when the government does not run things.  By ignoring the austerity nonsense, Hollande offers the “possibility of something better” not only for “new Keynesians and old socialists” but for France, Europe, and the world economy.

As they say, time will tell.

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The Greek Vote, Blame Germany, and the Forgotten Reforms

Greek, French and Egyptian voters went to the polls today. In what was supposed to be a turning point for Egyptian democracy, voters turned out in small numbers to cast their ballots for the Muslim or establishment candidate. They well understood the military had assumed control and the election was meaningless. In Europe, Greek voters remained evenly divided between the center-right and the Left, which promised to jettison the austerity of the Euro bailout agreement. Although preliminary results suggest that a pro-Euro coalition may achieve a fragile majority, it is sure that Greece will continue to muddle along from crisis to crisis. Europe needed clarity but got more confusion. The Greeks did not vote to leave the Euro, and no one wants to be responsible for pushing them out. Greek voters reckon that Europe will bail them out unconditionally rather than risk Greece’s departure from the Euro. Quite a gamble, but it may be a winning bet.

In France, electors gave their new socialist president Hollande a solid parliamentary majority to support his pro-stimulus and pro-welfare state policies. With two elections out of the way, attention turns tomorrow to Mexico where the G-20 leaders can pontificate and agree on general principles while deciding nothing.
Sunday’s votes took place against the drumbeat of blaming Germany for all that ails the Euro zone. If only the miserly, self-centered Germans would lend a helping hand to their deserving neighbors, all these troubles would go away. The blame-Germany narrative gives the weak European countries an excuse for not taking tough action, and the facts show that Germany’s stingy reputation is undeserved.

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Dr. Gregory's latest book can be found at Amazon.com.

How Krugman Would Ru(i)n Steve Jobs’ Apple

The Left considers Steve Jobs, the charismatic PC pioneer, a self-centered individualist, who did not to conform to elite etiquette. As Warren Buffet and Bill Gates gave away money with great fanfare, Jobs quietly devoted himself to creating value in Apple. He was conspicuously silent as Buffet recruited the super rich to argue for higher taxes. He told President Obama unwelcome truths (“Apple jobs are not coming back to America”).  He advocated school vouchers and he emphasized the importance of the family (oral history interview). He did not dash to DC to testify on the latest fad or navigate the elite cocktail party circuit. He had more important things to do.

Although Steve Jobs was a major donor to Democrat causes, his errant behavior did not sit well with the “progressive” political class. Now six months after his death at age 46, the attack on his legacy is in full swing, fueled by Apple Computer’s new status as the world’s richest corporation.

The Left’s standard bearer, Paul Krugman  snidely labels Steve Jobs (Jobs, Jobs, and Cars) the “heroic entrepreneur, the John Galt, I mean Steve Jobs-type ‘job creator’ Republicans love.”  Krugman rates Jobs’ achievements as inconsequential relative to Obama’s Detroit bailout – “the single most successful policy initiative of recent years.” Per Krugman, real heroes preserve vital “economic ecology and industrial clusters,” even if it takes taxpayer money. The heroes are not rugged individualists but union-industry-government partners, who, according to Obama’s State of the Union address, “work as a team” and “get each other’s backs.” 

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