Friday, November 25, 2011

Krugman Disses Capitalists

Paul Krugman's rant today in NYT is about the 0.1%, and while many in those 0.1% are truly pigs at the trough of government bailouts and protection, there are others who have achieved there wealth by providing goods and services for us all.

Krugman appears to be completely oblivious to this capitalistic role by creating a strawman as to the role of a capitalist. he writes:
Well, aside from shouts of "class warfare!" whenever such questions are raised, the usual answer is that the super-elite are "job creators" - that is, that they make a special contribution to the economy. So what you need to know is that this is bad economics. In fact, it would be bad economics even if America had the idealized, perfect market economy of conservative fantasies.

After all, in an idealized market economy each worker would be paid exactly what he or she contributes to the economy by choosing to work, no more and no less. And this would be equally true for workers making $30,000 a year and executives making $30 million a year.
Krugman attempts to shift the defense of the role of the super wealthy to those who claim that the super-rich are job creators.

Krugman is correct in pointing out that jobs would be created if if there weren't super-wealthy. Markets clear, if there is a supply of labor, prices (i.e. wages)will fall until everyone is employed. But, by using this strawman, Krugman is implying that there is no other value of the super-elite, which ignores the very important role of the super-rich in providing capital that helps increase the standard of living of an economy by making workers more productive. It also ignores the role of some super-elite as entrepreneurs, who see opportunity in front of them and become rich by creating a world that provides new or better services to all of us.

Bottom line: Krugman is a capitalist hater, elitist interventionist. To the degree his policy recommendations are followed, the standard of living of the U.S. will fall---which he will then blame on "free markets" and capitalists.

2 comments:

  1. "Well, aside from shouts of "soak the rich!" whenever such questions are raised, the usual answer is that the government are "job creators" - that is, that they make a special contribution to the economy. So what you need to know is that this is bad economics. In fact, it would be bad economics even if America had the idealized, perfect socialist economy of liberal fantasies.

    "After all, in an idealized socialist economy each worker would be paid exactly what he or she contributes to the economy by choosing to work, no more and no less. And this would be equally true for workers making $30,000 a year and bureaucrats making $30 million a year."

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  2. I wonder what a half-wit usually proven wrong economist that has never created a single job in his life is worth in a real market? My guess is that it would be no where near what Krugman is taking home.

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