UPDATED!!! This wasn’t Krugman, but see below…
“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.”
-Paul Krugman
Paul Krugman is an ass. Yes, he is the Nobel Laureate columnist for the New York Times. Yes, he has forgotten more economics than I’ll ever know. But yes, he is an ass.
A prime tenet of Keynesian economics is that spending is what makes an economy go. Recessions are caused by a drop in spending. The theory then says that to get out of a recession, you need to increase spending. If the private sector won’t do it, by God the government will. It doesn’t matter who is doing the spending, what is being bought, or even why people spend, as long as they spend everything is good.
Hence, big ticket items like wars and cleanup after disasters are seen as opportunities in the Keynesian model. Rational people understand that wealth doesn’t come from things being destroyed. Nor does it come from making things that blow up and blow people up. Normally, a reductio ad absudum critique of this theory goes something like this, well, why don’t we destroy vast swaths of property and rebuild, that will surely do wonders for the economy!
Instead of refuting this argument, Krugman has doubled down and said that yes, that is the idea. He seems to regret that the earthquake didn’t cause more damage, probably because he’s a patriot and is only looking out for the good of the country. It has certainly worked for Haiti and Japan. Aren’t we jealous of the opportunities those countries have gotten? Krugman is currently being savaged on Twitter, here are some of my favorite riffs on the destruction breeds prosperity theme:
From the #Krugmanstimulus feed:
The Iranians don’t hate Jews, they’re just trying to stimulate the Israeli economy.
Army Air FOrce General Curtis LeMay given lifetime achievement award for #Krugmanstimulus.
When God unleased the 10 plagues, He was actually trying to boost the Egyptian economy.
They should let students play grand theft auto in economics classes so they’ll understand the application of #krugmanstimulus.
The US should invade Europe, that way it can stimulate both the American economy and the Eurozone.
#politicalmath has some amazing ones:
“And I looked, and behold a pale horse: and his name that sat on him was Krugman, and Stimulus followed with him.
“It’s a liquidity trap! Commence attack on our own main reactor! Admiral Krugman Ackbar
The Unibomber was just trying to create some job openings.
This stuff just writes itself. Krugman had also just recently said the the world’s economic problems could be solved if the nations of the earth thought they were going to be invaded by aliens. No really, he thinks that the militarization of the world would be great. Take all of our resources and turn them into armaments. We’d be rich! This is what passes for economics, this is the kind of though that went into our stimulus efforts. Is it any wonder they don’t work? I’m hoping that Krugman (the world’s most popular advocate of Keynesianism) has done enough damage to discredit that line of economic thought. If this doesn’t do it, what will? The Onion understands Keynesian economics, why doesn’t everyone?
UPDATE:
OK, so the comment has been shown to be a fake. Krugman did not actually say that things would have been better if there was more damage. He did say that an alien invasion would help, and he did say that 9/11 would be good for economy too so I think this critique still stands.