Wednesday, August 31, 2011

Rand Paul Calls for Kreuger to Step Down Before He Even Starts as Head of the CEA

Rand Paul has issued the following statement on President Obama's nomination of Alan Kreuger to head the Council of Economic Advisers:

Alan Krueger is nothing more than an extreme government interventionist, cut from the same cloth as those who have failed to correctly predict, diagnose, and manage our economic problem. During his tenure at the Treasury Department, Alan Krueger helped design the ‘Cash for Clunkers’ program and even supported a European style value-added tax that would raise prices on American families.

This repetition of bad economic decisions by the President and his advisers could be described as the epitome of insanity – doing the same thing over and over and expecting a different result each time. Hasn’t the President realized we don’t need more big-government Keynesians in Washington saddling the American taxpayer with trillions in debt? The President’s economic policies have been an abysmal failure. His economic advisers have helped lead to these failures.

I have called for Treasury Secretary Tim Geithner to resign, and I am now calling on Alan Krueger to step down before he even begins his new role, before any more damage can be done to the American economy by this Administration.
Bizarrely, Kreuger has argued, along with David Card, that increases in the minimum wage do not increase unemployment among teenagers and other unskilled workers.

Aside from the entire methodological question of whether empirical studies can be used in the social sciences to discover economic theory (See: The Counter Revolution of Science), the Kreuger-Card study was extremely sloppy.

According to the Employment Policies Institute:
Economists have long believed that raising the minimum wage results in fewer entry-level employment opportunities and displaces the least skilled from the job market. In recent months, proponents of a higher minimum wage have returned to one study which they claim shows the opposite -- that higher minimum wages do not reduce, and may even increase, employment. The New Jersey fast food study, conducted by Princeton economists David Card and Alan Krueger, has been cited by everyone from the Secretary of Labor on national television to key Democrats debating the issue on the floor of the U.S. Senate.
Normally, the fact that politicians refer to an economic study does not make news. But this case is different: the New Jersey fast food study has been proven wrong. It is based on seriously flawed employment data. The data set used in the New Jersey study bears no relation to numbers drawn from the payroll records of the restaurants the New Jersey study claims to cover.

The New Jersey study was wholly discredited more than a year ago when this new information came to light. The media reported on the study using terms such as "snake oil," "dubious numbers," "grossly inaccurate," and "plain wrong." For months, no public figure dared mention the study to support a higher minimum wage. Today, however, leading policymakers are again citing the New Jersey study as fact. These individuals have chosen to ignore reality, intentionally misleading the public and attempting to set public policy on the basis of discredited research.
It is time to set the record straight -- again. The following can be summarized in three simple statements:
  1. The New Jersey fast food study has been re-estimated using payroll records rather than the badly flawed telephone surveys used in the original study. The results, compiled by independent economists, are not surprising: there was significant job loss stemming from New Jersey's decision to increase the state's minimum wage in 1992.
  2. Since the release of the first edition of this report (April 1995), additional problems have been identified in the Card-Krueger data set -- particularly in their attempts to measure price fluctuations as a response to increases in labor costs.
  3. The data base used in the New Jersey fast food study is so bad that no credible conclusions can be drawn from the report.
The truth about the New Jersey fast food study is clear and irrefutable. The data and the conclusions of the study are seriously flawed. It is unconscionable for those who set national minimum wage policy to ignore this evidence and mislead the American people
Given the sloppy research conducted by Kreuger, and the unsupported interventionist beliefs of Kreuger, Rand Paul is fully justified in opposing this man as a top adviser to the President.

Only  misguided leftists and union leaders attempting to block competition from cheaper labor and banksters would be in favor of Kreuger as a key adviser.


  1. Rand may not be Ron, but he is still light years better than anyone else besides Ron currently in DC.

  2. I don't even see how this is even being debated. If you increase the price of a good or service, it necessarily follows that less will be demanded. This is econ 101. These Keynesian fools must really hate human freedom.

  3. This nut job Kreuger's argument is that increased labor costs drive businesses to hire more people? I mean come on, is this the kind of crap they are teaching kids at Princeton? Its no wonder things are so screwed up.

    The fact that this guy had to actually study this is pathetic enough, but then to come to an absurd conclusion demonstrates how out of touch he is with reality. I don't even think Krugman is this out of touch.

  4. Cash for Clunkers, I'm feeling the effect right now. I want an inexpensive used truck, something good on gas, but guess what, Cash for Clunkers gobbled them all up leaving a glut of the large gas guzzling trucks.
    Many ads for the rare "good on gas" trucks I see, point this out, the price is higher as a result too.

    We don't need more advice and programs from the People who thought up Cash for Clunkers. But I suspect that what we'll get and they'll expect us to like it too.

    Thanks for nothing, I say, in fact, worse than nothing.

  5. Hardcore indoctrinated.
    WoW! Just WoW!
    Kreuger can't think to save his own life. Literally.

  6. When you see the nightmare our government is creating right now, there are only 2 possibilities: 1) they are incompetent; or 2) this is intentional.
    I think there is a degree of incompetence, but unfortunately, it must be their intention to destroy the U.S. dollar and our economy. There is no other rational explanation for current events.

  7. Figures don't lie, but liars figure!

  8. At LEAST they could have a minimum wage exception for teenagers so they could get work experience and work their way up in a useful profession.

  9. It's getting even worse for teenagers--at least in California. Tom Ammiano (D-San Francisco) has put forward AB-889 which will tax and regulate babysitters--including requirements for rest and meal breaks every 2 hours.



  10. We looked at that paper in my class. To me, the largest flaw in the study was that it failed to look at the number of hours worked by employees. I've worked in fast food and there are company directives that to cut labor costs, overtime is eliminated, store hours change, people overall are hired for fewer hours, etc. They try not to fire anyone and make sure not to hire anyone.

    Very sloppy study.

  11. Is this moron going to do for our nation what Cousin Freddie did for Halloween? I mean, at least give him a mask!

    And if you think Paul Krugman isn't even as dopey as this guy: Take note that he was probably one of the Krug's understudies!

    And the worst thing ANYONE needs is another economic Post-hole Digger! I was totally shocked that Princeton gives out Ph. D.'s in Keynesian economics! Except for government and a university payroll, such a degree is just as worthless as our money will soon be.

  12. I am so voting for Ron Paul and will support Rand Paul in anyway I can. As far as I have seen, they are in the minority of intelligent, well read and great thinkers. They are also in the minority with a few other ethical politicians who have not sold their soul for financial gain. I am so angry and so in fear regarding what is happening in our nation. BO makes one huge blunder after another and yet no one seems to be able to find a way to get him out of the WH before he destroys our country completely. To assign a college professor to this position when our country is in desperate need of people who understand and can solve these enormous financial problems created by those who know nothing is definitely INSANITY. We have several great economists who should have been assigned to this position including Ron Paul, Rand Paul and Paul Ryan who have come up with feasible ways to solve our problem; yet, the President assigns Krueger, a professor, who has no proven record of working in a corporation and no record to prove that he knows what he's doing!! PLEASE!!
    If our national situation weren't so critical it might almost be laughable.
    It's like asking a car mechanic to do a heart transplant! I'm not extreme in my thinking nor a conspiracy theorist, but I do agree that something terribly wrong is going on in the WH and Congress. Why don't we all work at trying to get Ron Paul elected in 2012. He appears to be our only hope in the long list of Republican Presidential hopefuls. We NEED integrity, truth, sound thinking and ethical answers to our many problems.

  13. The sad fact here is that both Rand and Ron Paul seem to be one of very few voices of reason, common sense, and the true American ideal and dream. Our founding fathers wrote the constitution to protect us from expanding, invasive government (that is why no free country is run by a monarch). Instead we have the Nanny States of the US, which is trying to dictate every facet of our life. The sheeple, in turn, for handouts, freebies, and just out of plain ignorance, choose to re elect these dictators time and again. We have more media coverage than ever, but no equal, ethical coverage of anything, it's all smoke and mirrors and leftist agenda. FREE. Ask someone on the street, and they will probably tell you it's about getting something for nothing, when actually it should be about release from tyranny and oppression and the ability to make your own choices, lifestyle, and wealth. Not take it from someone else.

  14. I had the pleasure of attending Ron Paul's New Hampshire town hall meeting last night.
    'Nuff said.

  15. Is it possible to impeach BO for insanity?

  16. I'm with Kevin.
    Can't believe there isn't a howl of outrage about Freddy Krueger Nightmare on Elm Street Version 2.0.
    This is insane.