krugman jumps the shark (UPDATED)
So the Krugman post was a hoax, albeit a funny one. So while Krugman didn’t say that Tuesday’s East Coast quake could’ve been an economic stimulant, this Nobel laureate did, in fact, say this about the Japanese earthquake in March:
And yes, this does mean that the nuclear catastrophe could end up being expansionary, if not for Japan then at least for the world as a whole. If this sounds crazy, well, liquidity-trap economics is like that — remember, World War II ended the Great Depression.
And this, about 9/11:
Nonetheless, we must ask about the economic aftershocks from Tuesday’s horror.These aftershocks need not be major. Ghastly as it may seem to say this, the terror attack — like the original day of infamy, which brought an end to the Great Depression — could even do some economic good.
So yeah, it’s not beyond the realm of possibility that he’d say something like that. As a commenter on the hoax-exposing post says:
The dude 0wns [sic] the Broken Window Fallacy. We should rename it in his honor to the Broken Krugman Fallacy.
Original post after the jump.
Nobel Laureate Paul Krugman:
People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage.
The parable of the broken window was introduced by Frédéric Bastiat in his 1850 essay Ce qu’on voit et ce qu’on ne voit pas (That Which Is Seen and That Which Is Unseen) to illustrate why destruction, and the money spent to recover from destruction, is actually not a net-benefit to society. The parable, also known as the broken window fallacy or glazier’s fallacy, demonstrates how opportunity costs, as well as the law of unintended consequences, affect economic activity in ways that are “unseen” or ignored by some…who typically see those actions as beneficial to the economy.
In other news, Stephen Hawking says that the Flat Earth Society has some “pretty good ideas.”
No. No he doesn’t. Because we live in an age of modern science—but apparently one of astonishingly rotten economics.