Monday, September 05, 2011

Krugman -- Present and Past

While I think of something appropriate to say about Labor Day (I’m never on time with these sorts of things), you should take a look at Krugman’s column in The New York Times today.

The Fatal Distraction

”Friday brought two numbers that should have everyone in Washington saying, “My God, what have we done?”

One of these numbers was zero — the number of jobs created in August. The other was two — the interest rate on 10-year U.S. bonds, almost as low as this rate has ever gone. Taken together, these numbers almost scream that the inside-the-Beltway crowd has been worrying about the wrong things, and inflicting grievous harm as a result.”

But even more impressive, is an article he pointed us toward in his blog. It’s in Slate magazine.

Supply-Side Virus Strikes Again

”So why does the supply-side idea keep on resurfacing? Probably because of two key attributes that it shares with certain other doctrines, like belief in the gold standard: It appeals to the prejudices of extremely rich men, and it offers self-esteem to the intellectually insecure.

The support of rich men is not a small matter. Despite its centrality to political debate, economic research is a very low-budget affair. The entire annual economics budget at the National Science foundation is less than $20 million. What this means is that even a handful of wealthy cranks can support an impressive-looking array of think tanks, research institutes, foundations, and so on devoted to promoting an economic doctrine they like. (The role of a few key funders, like the Coors and Olin Foundations, in building an intellectual facade for late 20th-century conservatism is a story that somebody needs to write.)”

Sound familiar to you? But what’s embarrassing is that, while I am just catching on to all this, Krugman wrote this article fifteen years ago. This article spends time talking about Bob Dole running for President, for crying out loud. (A lot of my younger readers are now saying, “Bob who?”)

”And so it doesn't really matter whether supply-side economics makes any sense, or even whether it goes down to a crushing electoral defeat. The supply-siders will always have a safe haven in the world of Free Enterprise Institutes and Centers for the Study of Capitalism, outlets for their views in the pages of Forbes and the Wall Street Journal, and new recruits who never tire of saying the same things again and again. When I was younger I thought that ridicule could eventually bring the whole farce to an end, but now I know better. Presumably the pundits are right, and Dole's desperate ploy will fail. But while that will be the end of him, the supply-siders will be back.”

Read it.

Don Brown
September 5, 2011

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