Monday, 14 November 2016

Krugman + Trump = Love?

In the aftermath of the U.S. Election, the renewed discussions of Trump's potential fiscal stimulus made me think of an awkward bed-fellow of his. Remember how Paul Krugman, the most viscious of hypocritical high-profile pseudo-economists, has been calling for additional fiscal stimulus for years? How odd. Shouldn't he secretly approve of Trump?

Let me remind you what Krugman infamously said a few years back, here quoted in an interview with Huffington Post:
“If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months,” he said.“And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better—“

“We need Orson Welles, is what you’re saying,” Rogoff cut in.
“There was a ‘Twilight Zone’ episode like this in which scientists fake an alien threat in order to achieve world peace,” Krugman said. “Well, this time, we don’t need it, we need it in order to get some fiscal stimulus.”
He did title his 2012 book 'End this Depression Now': calling for massive deficit-spending to reach full employment and get the economy going. What's the story behind the Fake Alien Threat? That we desperately need the government to borrow-and-spend (remember: spending is mending), even if the spending turns out to be useless and completely in vain, since the Alien Threat wasn't actually happening.

Hang on, that sounds like something else I've heard somebody say recently. A certain President-Elect keeps talking about a 50-something feet Wall to be built along the Mexican border, the essence of useless government spending. So wouldn't Krugman be on-board? This is, after all, his wet dream come true: senseless, useless government spending for no reason other than spending itself. Get the economy back to work!

Krugman came close to admitting it last week, but somehow a candidate calling for exactly the senseless government deficit-spending Krugman has been promoting for years is "a disaster", that will do "immense damage to America and the world". Who could have thought?
Nobody who thought Trump would be a disaster should change his or her mind because he won the election. [...] It’s at least possible that bigger budget deficits will, if anything, strengthen the economy briefly. More detail in Monday’s column, I suspect.
Last week, he was hedging his bets, and gave himself the weekend to come up with an excuse. Fair enough, I have patience, Dr. Krugman. Come Monday, and I'm not kidding, the best he could come up with in today's column is, well maybe Trumponomics will be alright in the short-term, BUT guys, Hillary was our "last, best chance to rein in runaway climate change". Really? A climate change that will "doom civilization"? Thanks, Dr. Krugman The Evangelist.

And it gets better! He continues, admitting that a
badly designed stimulus would still, in the short run, be better than no stimulus at all. In short, don't expect an immediate Trump Slump.
It's settled, then, Krugman is on Trump's side! Spending-is-mending, and building walls and pretending there are fake alien invasion to get spending going. Krugman finally found his intellectual consistency and realized that he was a Trump supporter!

Not so fast. Being Krugman, he obviously comes up with some vague reasons for why whatever he said last week no longer applies. In this case, here's his Top 3 reasons:
  1. Climate change will doom us all in the long run. Let's ignore the fact that it's largely irrelevant, far-off in the future and unlikely to be as bad as he believes.
  2. the quality of public servants will somehow drop, presumably since the smart guys giving us the Great Recession and the Slow Recovery aren't gonna be around to save us (oh, no!). Then again, Krugman has spent the better part of the last decade capriciously denouncing those public servants for either not doing the right thing, or not doing enough of it. 
  3. Trump's policies to help the poor will hurt them, for reasons he doesn't explain or justify. Proving and explaining empty assertions is obviously beneath Krugman and his Nobel Prize. 
No wonder Krugman doesn't like the President-Elect; Trump is challenging Krugman for the spotlight of No. 1 Clown. Poor Krugman, being crowded out by such a politically incorrect populist. I was so sure they'd find eachother over deficit-spending on useless projects. 

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