Showing posts with label Paul Krugman. Show all posts
Showing posts with label Paul Krugman. Show all posts

Friday, May 8, 2015

Hell Just Froze Over

Hell Just Froze Over

May 08, 2015 Mark Finelstein , Newsbusters 0 Comments
Surprise: Super-Lib Sachs Criticizes Krugman, Praises UK Conservatives

By Mark Finelstein, May 8, 2015, Newsbusters

It was enough to make a blogger in mom's basement spit out his Cheetos in surprise. On today's Morning Joe income redistributionist and global climate kvetcher Prof. Jeffrey Sachs praised the UK Conservatives for creating jobs via an austerity budget. In a second surprise, Sachs criticized fellow lefty traveler Paul Krugman.

Read the full story:  www.newsbusters.org

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Thursday, February 5, 2015

When Leftwing Economists Gruber And Krugman Practiced Economics By Larry Elder

February 05, 2015 Articles by Larry Elder , Economy 0 Comments
By Larry Elder, Feb. 5, 2015

President Barack Obama, in his State of the Union speech, called for a minimum-wage hike and for government-mandated paid family and medical leave.

"We are the only advanced country on Earth," said the President, "that doesn't guarantee paid sick leave or paid maternity leave to our workers." On the minimum wage, Obama issued this challenge: "And to everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full-time and support a family on less than $15,000 a year, try it. If not, vote to give millions of the hardest-working people in America a raise."

Minimum wage and paid family leave are not only moral imperatives, says Obama, but good economics to boot. Employees, he tells us, are happier and therefore more productive. Minimum wage and paid medical leave, understand, actually benefit business. It's just that dumb businessmen and women don't realize it.

But what does it say that perhaps the two most high-profile leftwing economists once opposed the minimum wage and paid family and medical leave?

When Obamacare architect/economist Jonathan Gruber and The New York Times economist Paul Krugman actually practiced economics, they both opposed the minimum wage. In Gruber's case, he also opposed government mandated for paid family and medical leave. In 2011 -- less than four years ago -- Gruber gave an MIT lecture called "Applying Supply and Demand." About the minimum wage, Gruber said: "Let's say the government rolled in and set a minimum wage. ... Workers want to supply more hours than firms want to hire. ... You end up with excess supply. And we call that excess supply 'unemployment.'" He also insisted that a higher minimum wage pressures an employer to turn to automation: "We have a downward sloping demand curve, and why is it downward sloping? Because the higher the wage, the fewer workers the firm wants to hire. It would rather use machines instead."

As to paid leave, Gruber also argued against it. In 1994 Gruber wrote: "I study several state and federal mandates which stipulated that childbirth be covered comprehensively in health insurance plans, raising the relative cost of insuring women of childbearing age. I find substantial shifting of the costs of these mandates to the wages of the targeted group." In other words, Gruber said that an employer forced to pay for family leave will simply reduce the employee's wages to offset the cost -- not net benefit to the employee.

This brings us to The New York Times columnist/economist Paul Krugman, who currently supports a $15 minimum wage. He, too, has done a 180 on the issue.

In 1998, Krugman reviewed a book that supported the living wage, titled "The Living Wage: Building a Fair Economy." But Krugman slammed the idea: "The living wage movement is simply a move to raise minimum wages through local action. So what are the effects of increasing minimum wages? Any Econ 101 student can tell you the answer: The higher wage reduces the quantity of labor demanded, and hence leads to unemployment."

Krugman even dismissed Card-Krueger, the widely cited minimum-wage study that purports to show its positive effect. Krugman pretty much dismissed it. "Indeed," he wrote, "much-cited studies by two well-regarded labor economists, David Card and Alan Krueger, find that where there have been more or less controlled experiments, for example when New Jersey raised minimum wages but Pennsylvania did not, the effects of the increase on employment have been negligible or even positive. Exactly what to make of this result is a source of great dispute. Card and Krueger offered some complex theoretical rationales, but most of their colleagues are unconvinced; the centrist view is probably that minimum wages 'do,' in fact, reduce employment, but that the effects are small and swamped by other forces. ...

"In short, what the living wage is really about is not living standards, or even economics, but morality. Its advocates are basically opposed to the idea that wages are a market price -? determined by supply and demand, the same as the price of apples or coal. And it is for that reason, rather than the practical details, that the broader political movement of which the demand for a living wage is the leading edge is ultimately doomed to failure: For the amorality of the market economy is part of its essence, and cannot be legislated away."

In sum, Gruber and Krugman once made Milton Friedman-like, Econ 101 arguments against minimum wage and its cousin, the livable wage. And in Gruber's case, he even argued against government-mandated paid family and medical leave.

The late Democratic Sen. Daniel Patrick Moynihan is attributed with the following quote: "You're entitled to your opinion, but you're not entitled to your own facts." In the case of Gruber and Krugman's current support for "progressive" policies they once opposed, what changed? The facts -- or the politics?

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Tuesday, October 14, 2014

When prez is a dem, he switches views!

October 14, 2014 Articles by Larry Elder , Democrats 0 Comments
'The Hypocrisy Of New York Times Economist Paul Krugman' 

By Larry Elder, Feb. 11, 2010

Left-wing economist, Nobel laureate and New York Times columnist Paul Krugman hates deficits in tough economic times -- when the president of the United States is named George W. Bush.

Krugman, in a November 2004 interview, criticized the "enormous" Bush deficit. "We have a world-class budget deficit," he said, "not just as in absolute terms, of course -- it's the biggest budget deficit in the history of the world -- but it's a budget deficit that, as a share of GDP, is right up there."

The numbers? The deficit in fiscal year 2004 -- $413 billion, 3.5 percent of the gross domestic product.

Back then, a disapproving Krugman called the deficit "comparable to the worst we've ever seen in this country. ... The only time postwar that the United States has had anything like these deficits is the middle Reagan years, and that was with unemployment close to 10 percent." Take away the Social Security surplus spent by the government, he said, and "we're running at a deficit of more than 6 percent of GDP, and that is unprecedented."

He considered the Bush tax cuts irresponsible and a major contributor -- along with two wars -- to the deficit. But he also warned of the growing cost of autopilot entitlements: "We have the huge bulge in the population that starts to collect benefits. ... If there isn't a clear path towards fiscal sanity well before (the next decade), then I think the financial markets are going to say, 'Well, gee, where is this going?'"

Three months earlier, Krugman said, "Here we are more than 2 1/2 years after the official end of the recession, and we're still well below, of course, pre-Bush employment." In October 2004, unemployment was 5.5 percent and continued to slowly decline. At the time, Krugman described the economy as "weak," with "job creation ... essentially nonexistent."

How bad will it get? If we don't get our "financial house in order," he said, "I think we're looking for a collapse of confidence some time in the not-too-distant future."

Fast-forward to 2010.

The numbers: projected deficit for fiscal year 2010 -- over $1.5 trillion, more than 10 percent of GDP.

This sets a post-WWII record in both absolute numbers and as a percentage of GDP. And if the Obama administration's optimistic projections of the economic growth fall short, things will get much worse. So what does Krugman say now?

We must guard against "deficit hysteria." In "Fiscal Scare Tactics," his recent column, Krugman writes: "These days it's hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we're told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren't stated as opinions, as views held by some analysts but disputed by others. Instead, they're reported as if they were facts, plain and simple."

He continues, "And fear-mongering on the deficit may end up doing as much harm as the fear-mongering on weapons of mass destruction." Krugman believes Bush lied us into the Iraq War. Just as people unreasonably feared Saddam Hussein, they now have an unwarranted fear of today's deficit.

Questions: Didn't Krugman, less than six years ago, call the deficit "enormous"? Wouldn't he, therefore, consider a $1.5 trillion deficit at 10 percent of GDP mega-normous? Didn't he describe the economy with 5.5 percent unemployment as "weak"? Isn't the current economy, at 9.7 percent unemployment, even weaker? If the 2004 deficit was "comparable to the worst we've ever seen in this country," wouldn't today's much bigger deficit cause even more heartburn?

Nope. Now a huge deficit is actually a good thing: "The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs." The deficit "should be bigger"?!

Long term, Krugman says, we've got concerns about revenue and spending. But as for now? "There's no reason to panic about budget prospects for the next few years, or even for the next decade." In 2004, Krugman warned that without a "clear path towards fiscal sanity" before "the next decade," we faced a "crunch." Presumably, we now have this "clear path."

Let's review. In 2004, an unhappy Krugman criticized Bush's "weak" economy and "miserable" job creation. Running an "enormous" deficit was a bad thing. Times were awful -- "by a large margin" the worst job crash and performance since Herbert Hoover. Today the deficit is four times as large in an even weaker economy with much higher unemployment. Times are awful. Now, though, the deficit is a good thing and should be even bigger.

Krugman's flip-flop on the deficit demonstrates a modern economic equation. Hatred of Bush + love for Obama = intellectual dishonesty.


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Friday, October 10, 2014

Lefty circles the wagon

October 10, 2014 Paul Krugman , President Barack Obama 0 Comments
Rolling Stone/Paul Krugman: In Defense Of Obama

By Paul Krugman, Oct. 8, 2014, Rollingstone.com

When it comes to Barack Obama, I've always been out of sync. Back in 2008, when many liberals were wildly enthusiastic about his candidacy and his press was strongly favorable, I was skeptical. I worried that he was naive, that his talk about transcending the political divide was a dangerous illusion given the unyielding extremism of the modern American right. Furthermore, it seemed clear to me that, far from being the transformational figure his supporters imagined, he was rather conventional-minded: Even before taking office, he showed signs of paying far too much attention to what some of us would later take to calling Very Serious People, people who regarded cutting budget deficits and a willingness to slash Social Security as the very essence of political virtue.

And I wasn't wrong. Obama was indeed naive: He faced scorched-earth Republican opposition from Day One, and it took him years to start dealing with that opposition realistically. Furthermore, he came perilously close to doing terrible things to the U.S. safety net in pursuit of a budget Grand Bargain; we were saved from significant cuts to Social Security and a rise in the Medicare age only by Republican greed, the GOP's unwillingness to make even token concessions.

But now the shoe is on the other foot: Obama faces trash talk left, right and center – literally – and doesn't deserve it. Despite bitter opposition, despite having come close to self-inflicted disaster, Obama has emerged as one of the most consequential and, yes, successful presidents in American history. His health reform is imperfect but still a huge step forward – and it's working better than anyone expected. Financial reform fell far short of what should have happened, but it's much more effective than you'd think. Economic management has been half-crippled by Republican obstruction, but has nonetheless been much better than in other advanced countries. And environmental policy is starting to look like it could be a major legacy.

Read the full story:  www.rollingstone.com

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Friday, May 23, 2014

FLASHBACK: NYTimes Economist/Columnist Paul Krugman's Love Column About The The "Highly Successful" VA

May 23, 2014 Healthcare Reform , National Quality Research Center 0 Comments
By Paul Krugman, Jan. 27, 2006, Nytimes.com

American health care is desperately in need of reform. But what form should change take? Are there any useful examples we can turn to for guidance?

Well, I know about a health care system that has been highly successful in containing costs, yet provides excellent care. And the story of this system's success provides a helpful corrective to anti-government ideology. For the government doesn't just pay the bills in this system -- it runs the hospitals and clinics.

No, I'm not talking about some faraway country. The system in question is our very own Veterans Health Administration, whose success story is one of the best-kept secrets in the American policy debate.

In the 1980's and early 1990's, says an article in The American Journal of Managed Care, the V.H.A. ''had a tarnished reputation of bureaucracy, inefficiency and mediocre care.'' But reforms beginning in the mid-1990's transformed the system, and ''the V.A.'s success in improving quality, safety and value,'' the article says, ''have allowed it to emerge as an increasingly recognized leader in health care.''

Last year customer satisfaction with the veterans' health system, as measured by an annual survey conducted by the National Quality Research Center, exceeded that for private health care for the sixth year in a row. This high level of quality (which is also verified by objective measures of performance) was achieved without big budget increases. In fact, the veterans' system has managed to avoid much of the huge cost surge that has plagued the rest of U.S. medicine.

How does the V.H.A. do it?

The secret of its success is the fact that it's a universal, integrated system. Because it covers all veterans, the system doesn't need to employ legions of administrative staff to check patients' coverage and demand payment from their insurance companies. Because it covers all aspects of medical care, it has been able to take the lead in electronic record-keeping and other innovations that reduce costs, ensure effective treatment and help prevent medical errors.

Moreover, the V.H.A., as Phillip Longman put it in The Washington Monthly, ''has nearly a lifetime relationship with its patients.'' As a result, it ''actually has an incentive to invest in prevention and more effective disease management. When it does so, it isn't just saving money for somebody else. It's maximizing its own resources. In short, it can do what the rest of the health care sector can't seem to, which is to pursue quality systematically without threatening its own financial viability.''

Oh, and one more thing: the veterans' health system bargains hard with medical suppliers, and pays far less for drugs than most private insurers.

I don't want to idealize the veterans' system. In fact, there's reason to be concerned about its future: will it be given the resources it needs to cope with the flood of wounded and traumatized veterans from Iraq? But the transformation of the V.H.A. is clearly the most encouraging health policy story of the past decade. So why haven't you heard about it?

Read the full story:  www.nytimes.com

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