With Nobel Prize Winning Economists Like These, Who Needs Terrorists?
If you’re wondering what #KrugmanStimulus is about, take a gander at this:
In case you can’t read it:
Paul Krugman – 7:15 PM (edited) – Public
People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage.
Now there’s some question as to whether or not this is really Paul Krugman’s Google Plus account – as far as I can tell, it looks legitimate. It’s been open for a while, and he has many friends added from the liberal and intellectual elite. If it’s the case that it is his account, it has to be one of the stupidest comments made by any of Obama’s advisors. And that’s saying something.
Click on the image to go to the Google Plus post and make a comment – tell Paul what a GENIUS you think he is!! (post has been removed)
Now this isn’t the first time the Nobel Prize Winning Economist has made such opinions. Here’s a column he wrote after 9/11:
SYNOPSIS: The worst tragedy in American history will not necesarily drive us into recession
It seems almost in bad taste to talk about dollars and cents after an act of mass murder. Nonetheless, we must ask about the economic aftershocks from Tuesday’s horror.
These aftershocks need not be major. Ghastly as it may seem to say this, the terror attack — like the original day of infamy, which brought an end to the Great Depression — could even do some economic good. But there are already ominous indications that some will see this tragedy not as an occasion for true national unity, but as an opportunity for political profiteering. About the direct economic impact: The nation’s productive base has not been seriously damaged. Our economy is so huge that the scenes of destruction, awesome as they are, are only a pinprick. The World Trade Center contained 12 million square feet of office space; that’s out of 375 million square feet in Manhattan alone, and 3.5 billion in the United States as a whole. Nobody has a dollar figure for the damage yet, but I would be surprised if the loss is more than 0.1 percent of U.S. wealth — comparable to the material effects of a major earthquake or hurricane.
The wild card here is confidence. But the confidence that matters in this case has little to do with general peace of mind. If people rush out to buy bottled water and canned goods, that will actually boost the economy. For a few weeks horrified Americans may be in no mood to buy anything but necessities. But once the shock has passed it’s hard to believe that consumer spending will be much affected.
Will investors flee stocks and corporate bonds for safer assets? Such a reaction wouldn’t make much sense — after all, terrorists are not going to blow up the S.&P. 500. True, markets do sometimes react irrationally, and some foreign markets plunged after the attack. Since then, however, they have stabilized. On the whole it’s just as well that our own markets have stayed closed for a few days, giving investors time to calm down; the administration was wrong to put pressure on stock markets to reopen right away. By the time the markets do reopen, the worst panic will probably be behind us.
So the direct economic impact of the attacks will probably not be that bad. And there will, potentially, be two favorable effects.
First, the driving force behind the economic slowdown has been a plunge in business investment. Now, all of a sudden, we need some new office buildings. As I’ve already indicated, the destruction isn’t big compared with the economy, but rebuilding will generate at least some increase in business spending.
Second, the attack opens the door to some sensible recession-fighting measures. For the last few weeks there has been a heated debate among liberals over whether to advocate the classic Keynesian response to economic slowdown, a temporary burst of public spending. There were plausible economic arguments in favor of such a move, but it was questionable whether Congress could agree on how to spend the money in time to be of any use — and there was also the certainty that conservatives would refuse to accept any such move unless it were tied to another round of irresponsible long-term tax cuts. Now it seems that we will indeed get a quick burst of public spending, however tragic the reasons.
Now for the bad news. After the attacks, I found myself wondering whether some politicians would try to exploit the horror to push their usual partisan agendas. Then I chided myself for such an uncharitable thought. But it seems you can’t be too cynical; sure enough, the push is already on to sell tax breaks for corporations and a cut in the capital gains tax as a response to terrorism.
One hopes that the White House will distance itself from this disgraceful opportunism, that it will deliver the bipartisanship it originally promised. But initial indications are not good: the administration developed its request for emergency funding in consultation with Congressional Republicans — full stop. A Democratic contact says that his party received “no consultation, no collaboration, virtually no information.”
I didn’t want to mention this, but now is the time to draw the line. This tragedy will only be magnified if it is exploited for political gain. Politicians who wrap themselves in the flag while relentlessly pursuing their usual partisan agenda are not true patriots, and history will not forgive them.
Originally published in The New York Times, 9.14.01 (I left the entire article intact so you could judge it all)
Surely it’s ok to use tragedies in order to push economic agendas!
Oh, and just as an added treat – some official estimates of the cost of 9/11 come to $2 TRILLION. Now, I’m not a Nobel Prize winning economist or anything, but $2 trillion of $9.8 trillion* is SLIGHTLY more than the 1/10 of a percent that our good pal, Paul Krugman estimated. It’s actually more than 20% of the GDP, or, 200 TIMES more than what this brilliant economist guesstimated! That’s understandable. When your training depends on you positing that space aliens, earthquakes, and terrorist attacks are all great ways to stimulate an economy, math is just boring!*$9.8 trillion was the US GDP in 2001.
———- UPDATE ———–
Some great tweets from the sarcastic “#KrugmanStimulus” hashtag game tonight (not meant to be exhaustive, but the ones I caught):
——- UPDATE ——–
Well Paul is calling a hoax on this one:
…. I hear that the not-so-good people at National Review are attacking me over something I said on my Google+ page. Except, I don’t have a Google+ page.
This is the third incident I’m aware of — there may well be more — in which people are claiming to be me. There was also my nonexistent connection with academia.edu, and at least one web opinion piece by someone claiming to be me (and sounding not at all like me).
This is really cute, not. Apparently some people can’t find enough things to attack in what I actually say, so they’re busy creating fake quotes. And I have enough on my plate without trying to chase all this stuff down.
So if you see me quoted as saying something really stupid or outrageous, and it didn’t come from the Times or some other verifiable site, you should probably assume it was a fake.
And for once, I agree with him! His non-hoaxy comments are so ridiculous, we should focus on those, as I have shown above. Notice that he implies that National Review made up the quote, which they didn’t. Resist we much, Paul, Resist we much!