Thursday, July 2, 2015

Krugman to Puerto Ricans: Ditch Your Island

Paul Krugman, who, I must add, received his Nobel Prize for work in economic geography, doesn't seem to understand the law of comparative advantage,

He seems to think it doesn't apply to Puerto Rico and that nothing can be done there to turn things around:
There is much discussion of what’s wrong with Puerto Rico, but maybe we should, at least some of the time, just think of Puerto Rico as an ordinary region of the U.S.; at any given time, we expect some regions to be in relative and maybe even absolute decline, as the winds of technology and global trade shift. 
His solution:
 [O]utmigration need not be such a terrible thing.
This is his solution despite the fact that he admits :
Puerto Rico does, of course, have warm winters and beaches.
And despite his absurd  "leave the island" policy solution. at some level he does understand the real problem:
Now, you might argue that this is just an argument for big wage cuts. But Puerto Rico is part of the United States, and its residents are US citizens. This tends to put a floor under wages, in several ways. The New York Fed [] emphasizes the effects of the federal minimum wage and relatively generous federal safety-net programs (given low productivity) that may cause people to choose exit from the work force in the face of low wages.
But Krugman will not stand for cuts in the minimum wage or federal hand out programs, he wants Puerto Ricans to leave the island instead.



  1. I read this to my girlfriend, and she said "Start Leaving Puerto Rico? Has he never been to New York City?"

  2. They brought it upon themselves. I left 30 plus years ago. Last week my sister called to tell me sge might be coming to Texas to look for a job.