Filling the Holes in Krugman's Analysis

Ludwig Von Mises Institute ^ | January 17, 2009 | Robert Murphy

[dbz77]

lthough many free-market economists were aghast that Paul Krugman won the Nobel (Memorial) Prize in Economics, I have come to realize that he is every bit as brilliant as that august award indicates. For some time now, Krugman has said we are in "depression economics" mode, where the normal rules of scarcity and tradeoffs don't apply. In this universe, it makes sense to have one group of workers dig holes, and another group fill them back up. Sure, when all is said and done, there is nothing tangible to show for this effort, but at least it "creates jobs."

So what I've come to realize is that in these last few months Krugman has implemented his own private-sector stimulus plan. He has been working furiously, cranking out fallacious articles and blog posts, which then provide work for people like Bill Anderson and me, as well as thousands of other bloggers who still can't understand why it's bad for families to save more. A clever chap, this Dr. Krugman, no?

[ex91B10]

...we are in "depression economics" mode, where the normal rules of scarcity and tradeoffs don't apply.

We are in a 'holding pattern': nobody wants to make a move because the rules may be different tomorrow.