Friday, April 27, 2012

When You're Right

Let's set the stage. Remember this post?

"The United Kingdom is acting early. No one really knows if it is right or wrong. We only have our opinions. I think it’s wrong. But if you think it’s the right thing to do for America -- cutting government spending and raising taxes to pay off the deficit -- you now have a test case to watch."

I, of course, get all my economic ideas from Krugman. So, it is not I that is right. It is Krugman. (I just have the good sense to heed what he says.)

"When David Cameron became PM, and announced his austerity plans — buying completely into both the confidence fairy and the invisible bond vigilantes — many were the hosannas, from both sides of the Atlantic. Pundits here urged Obama to “do a Cameron”; Cameron and Osborne were the toast of Very Serious People everywhere.

Now Britain is officially in double-dip recession, and has achieved the remarkable feat of doing worse this time around than it did in the 1930s."

(Emphasis added)

I think it's one of the reasons I really like Krugman -- he lacks the "good manners" to remain quiet when he's right. He'll poke you in the eye with it.

Death of a Fairy Tale

"Or as I put it way back when, the idea was that the confidence fairy would come in and reward policy makers for their fiscal virtue. 

The good news is that many influential people are finally admitting that the confidence fairy was a myth. The bad news is that despite this admission there seems to be little prospect of a near-term course change either in Europe or here in America, where we never fully embraced the doctrine, but have, nonetheless, had de facto austerity in the form of huge spending and employment cuts at the state and local level."

If this subject interests you, you must read all of Krugman's blog entries from this week (be sure to look at the charts). He hasn't been showing much mercy to his critics or policy makers. Nor should he.

It isn't easy being right when the powers-that-be of the world are aligned against you. And I think it's actually prudent to remind citizens that the powers-that-be aren't always right.

"To wrap this up, NextGen is the FAA’s version of the Strategic Defense Initiative (SDI) -- better known as Star Wars. It’s an irresistible idea and $50 billion dollars is just the start. You might want to ask yourself the same question about SDI. Where is it ?"

Yes, I wrote that back in February 2008.

By the way, how's ERAM doing?

Transformational FAA modernization programs slipping schedule

In case you're wondering, it doesn't make me feel better. I suspect it's the same with Krugman. No one wants to see public policy fail. Watching the same mistakes being made over and over again is painful. But not nearly as painful as public policy failures are for our citizens. That is what is important.

Don Brown
April 27, 2012

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