Advertisement

Krugman's Contradiction

Krugman's Contradiction

By Tom Bevan - July 13, 2009

Every time I read a Paul Krugman column I stop and wonder: what would America look like if this man were in charge of the country?

We know from his most recent writings that Krugman would have nationalized the entire banking system, that he would have enacted a significantly larger stimulus package than the $787 billion that passed, that he would move America to a single payer health care system, and that he'd enact much tougher environmental policy to deal with global warming.

Today, Krugman spends the first half of his column lamenting the fact that without an additional stimulus package we may be headed for a "jobless recovery." He writes:

Now, it's bad enough to be jobless for a few weeks; it's much worse being unemployed for months or years. Yet that's exactly what will happen to millions of Americans if the average forecast is right - which means that many of the unemployed will lose their savings, their homes and more.

Krugman describes the prospect of lingering high unemployment as a "slow-motion human and social disaster." Fair enough.

But then Krugman spends the second half of his column arguing that the Waxman-Markey cap-and-trade bill that just passed the House "fell well short of what the planet really needs."

Krugman doesn't elaborate on what type of additional environmental regulations are needed to avert the "utter catastrophe" heading our way, but he makes clear that we need much, much more than we have and that we need it fast.

How can we reconcile the two pieces of Krugman's argument? I'm not a Nobel Prize winning professor from Princeton, but it doesn't take more than a basic understanding of economics to know that the kind of stricter environmental policies Krugman is talking about (carbon taxes, capping emissions, additional regulations, etc) will come at a cost to the economy. The discussion is, and always has been, all about balance: how do we implement policies aimed at addressing the issue of climate change without putting additional undue burdens on the economy and stifling growth?

To achieve the kind of dramatic, fast-acting results Krugman envisions would obliterate any such balance (unless Krugman believes further massive government spending can somehow offset the havoc such legislation would wreak on the economy) and one byproduct of Krugman's prescription would almost certainly be higher unemployment.

It really doesn't make much sense. Krugman frames his argument with the colorful analogy of the slowly boiling frog. But, ironically, Krugman's solution for saving the frog is to pull him out of the boiling pot and strangle him to death.

 

Tom Bevan is the co-founder and Executive Editor of RealClearPolitics and the co-author of Election 2012: A Time for Choosing. Email: tom@realclearpolitics.com, Twitter: @TomBevanRCP

Why We Can't (Or Won't) Govern
Robert Samuelson · November 17, 2014
Marriage Is Pro-Growth
Larry Kudlow · November 15, 2014
Obama Touts Economic News as He, GOP Leaders Meet
Alexis Simendinger · November 8, 2014

Tom Bevan

Author Archive

Follow Real Clear Politics

Latest On Twitter