Paul Krugman; John Maynard Keynes meets “Mad Max.”
Cartoon: Eric Allie.
Paul Krugman is the sort of guy that is easy to ridicule to the point where such efforts are beginning to be considered soft targeting. It is difficult at times to decide whether he is simply a guy who took Mad Magazine to be a serious publication as a kid, or whether he is barking mad.
There are a number of theories around at the moment on how to solve the debt problem and get the economy moving. A personal favorite is retailer Gerry Harvey’s, “Economic Salvation; The Role of Welfare and Stimulus Funded Retail Therapy.”
Paul, on the other hand has come up with the “Theory of Beneficent Disaster,” which some speculate he arrived at when swatting up on Keynes while watching Mad Max, or Mars Attacks. The idea is that disasters, wars, destruction, and especially alien invasions bring about government spending, which boosts the economy. This idea is loved by NYT and MSNBC as it dovetails in nicely with their current belief in benevolent despotism.
Beneficent Disaster has a big advantage over other theories in that it is not necessary for the disaster to actually occur. It can simply be made up as has been done in the ongoing global warming saga as he explains here:
This is hard to get people to do, much better, obviously, to build bridges and roads and healthcare clinics and schools. But my proposed, I actually have a serious proposal which is that we have to get a bunch of scientists to tell us that we're facing a threatened alien invasion, and in order to be prepared for that alien invasion we have to do things like build high-speed rail. And the, once we've recovered, we can say, “Look, there were no aliens.”H/t Andrew Bolt.
I recall a movie from the 1950s that had just such a theme. Unfortunately for the scientists involved, the movie's ending came when the population found out that they had been duped, and brought out the guillotines!
ReplyDeleteI don’t want to get on my soapbox but...
ReplyDeleteThis doctrine isn't new. My research leads me to believe that this ideology is the root cause of the majority of global financial woes.
Milton Friedman postulated this dogma when he was at the University of Chicago.
His disciples "The Chicago School" or, “Chicago Boys” have used the "Shock Doctrine" in most South American countries, most noticeably in Pinochet's Chile with all the documented atrocities committed in the name of "democracy".
Since then China and Russia have also felt the result of The Chicago School
Political leaders who were influenced by him:
Margaret Thatcher
Alan Greenspan
William F. Buckley, Jr
Ben Bernanke
Judge them by their legacy, need I say more?
I can't say I remember seeing a movie on this theme, but it sounds good.
ReplyDeletePD, I was never a follower of Friedman, I was more inclined toward Hayek. I find it difficult to believe though, that he pushed this old barrow of rotting fish.
The ideas of Krugman are normally a rehash of the broken window fallacy which would make Kiwi's the luckiest people in the world in being blessed with the Christchurch earthquakes because of all that economic activity generated in the wake of the disaster.
In this case he is advocating the politics of panic as a rational economic philosophy.
Jim
ReplyDeleteIn truth, I have little time for economists or politicians. If they are as clever as they purport to be, why are we in the mess we find ourselves?
If you get time have a look at No Logo or, Shock Doctrine by Naomi Klein; interesting if scary books!
Probably one of the best reads in economics is Ron Kitching's book, "Understanding Personal and Economic liberty." Ron was a driller who studied the subject and wrote the book in layman's terms.
ReplyDeleteI'll check your reference when I get a bit of spare time.