Paul Krugman Once Again Proves he Doesn’t Understand Economics

I teach economics. I like to think I understand economics better than the average bear. I try to explain to my students who the witch doctors (Keynesians) are. I try to explain that they still believe in blood letting with leeches, borrowing massive amounts of “stimulus” funds. The heroes are the Austrians (F.A. Hayek) and Monetarist (Milton Friedman) understand things like the business cycle and capitalism. Biased? Yes but in the mist of reliving the Great Depression very painful as well.
Ten years ago I swear I kept my politics out of teaching economics as an adjunct professor. I just stood there with my overhead projector and regurgitate Keynesian IS-LM curves to the students like a good dutiful professor. I admit I assigned a money supply class projects here and there to try and get across to the students the concept of inflation and deflation but that was it. A typical boring economics class that surly is repeated thousands of times all over the United States.

Nobel Prize winning economist Paul Krugman pretends to be for the “little people” but lacks the compassion or a understanding of economics to accomplish his professed desire

I left teaching and went into construction. For most this would seem like a step backwards but for me it was quite liberating to be free of all unnecessary human interaction. I actually enjoyed being able to be a part of creating and doing instead of talking about it. And the money was better.
Eventually all things come to an end, sometimes with a huge thud. With the Keynesians in Washington, New York and the Federal Reserve the Florida construction industry shrunk 50%? 80%? Who knows but it’s on life support getting infusions of Obama money here and there for the politically connected and politically correct workers and business owners. Yes for years the appeal of construction was getting away from political correct class of asses, now the politically correct government dweebs control what 70% or was that 80% of the current construction activity. No room anymore for the undisciplined libertarian white guys. No place for us to go now but to form militias and wait for the deconstruction of the United States. Ah revenge just around the corner.
So here I am ten years latter teaching economics again. The Fed has blown up the monetary base 162%, a few trillion stimulus dollars latter American rediscover Roosevelt economics doesn’t work and Paul Krugman is still as dense as ever. Paul Krugman the guy who in 2003 wanted housing prices to rise so as to stimulate the economy, the guy who supports 17th century Mercantilism economic policies, price floors for energy markets, and in general a centralized command and control of the economy by Washington politicians.
I have come to the conclusion that Krugman either doesn’t understand economics and should find another profession or is just a mean bastard that believes the elites are the only ones who should partake and enjoy in the fruits of their labor. I favor the latter theory.
I show videos in class of real economist like Dan Mitchell and even the kind of sort of economist Peter Schiff. Inevitably some bright liberal “balanced” young student will ask for some Paul Krugman videos. I am ashamed to say it but it is true. My response “Paul Krugman doesn’t understand economics.” And as far as I am concerned he doesn’t and neither do 99% of the economists in Washington DC. They basically are the equivalent of the 18th century doctors who believe in blood letting and leeches to drain the sickness from patients for any and every disease that is encountered. Witch doctors who should be shown the door, forever ostracized and forgotten except as a example of what not to do.

Keynesian economics are the 18th century equivalent of doctors using leeches and blood letting to cure a patent. Medicine came out of the Dark Ages and now it is time for economist to come out of the Dark Ages and ostracize those in their profession who do not understand the profession. Just as medicine made dramatic gains in the 19th and 20th centuries now is the time for economist to do the same.

Now if the Paul Krugman’s and Barack Obama’s of the world wanted to be honest they would come out and say they only want 500,000 people on the planet. To get there the elites will have to set up a dictatorship and strip you of your living standard. No car, no television, no refrigerator. If you are a peasant maybe the elites will let you live but on their terms. This is exactly what Krugman is saying when he supports price floors on energy. Why should the peasants be allowed to live with air conditioning and personal transportation? It makes no sense to him or Obama why someone working as a janitor or bookkeeper should have or enjoy air conditioning. The damage to the environment is too great and it’s a luxury not a necessity. They are allowed to believe what they want to but they should have the decency to state their beliefs in public in a honest manner. Instead like all communist, fascist and socialist they cloud their true intentions with rhetoric about being “for the people.”
Krugman should just come out and say “I am for the dictatorship of the elites. I do not think most people on this planet are worthy of the consumption of resources above and beyond bare subsistence levels. If we impoverished people to say Middle Ages levels of income of about $150 per year we would lessen environmental damage and free up resources for the elites to experiment with alternative life styles. Eventually I would like to see a world where there was no need for money and society was classless. To do this the number of humans will need to be reduced down to 500,000 or so.” Now that would be honest. Instead Krugman writes like he is a serious economist giving out supposedly rational advice to improve the standard of living for all. He masquerades about being for the little man. In fact the opposite is true and that’s why I refuse to show Krugman videos in my class.
The latest example of this elitism is Krugman’s article in the New York Times where he professes to be on the side of the working man. He wails out against the angry rich and their Republican allies who have the audacity to ask to be treated like the other 98% of Americans when it comes to extending the Bush Tax Cuts. He is for the common man, right?

Paul Krugman and the elites want the United States peasants to be more like Chinese peasants both in attitude and income levels.

For the uneducated masses it would seems so. He even states so at the end of his diatribe in case you are too stupid to pick up on the fact that he is for the people, “But when they (Republicans and the rich) say “we,” they mean “you.” Sacrifice is for the little people.” Oh how quaint. We know Krugman is a delusional mean bastard or doesn’t understand economics from this statement.
Okay Mr. Krugman please let me explain it to you. There are certain segments of the tax code that are highly responsive to increases or decreases in tax rates and how it affects GDP. If you increase taxes on cigarettes not much will happen to the economy one way or the other. If you tax the top 2% then that is a completely different matter. That cuts off the already wealthy, already elites from competition in their industries from young upstart entrepreneurs like Bill Gates 35 years ago.
You see Mr. Krugman the elites already have capital and wealth. They already have market share. They can live off their capital quite well thank you. Now who cannot live off their capital and wealth? Who has not accumulated capital and wealth? Maybe the up and coming entrepreneur? Krugman know this or is the dumbest economist on the planet.
Oligopolies the world over know this and favor high taxes and complex tax codes to protect their market share from new and innovative competition. Basically kick the young challengers when they are down tax policies. Deny new competitors capital and the ability to accumulate capital and if you are working for the elite oligopolies of the world you will always enjoy your position of power and privilege. Pay off the political congressmen and senators on a regular basis to maintain the status quo.
When the government increases regulation and taxes the most politically connected and corporations who already are established gain and young entrepreneurs as well as the people who work for them lose. Society becomes rigid and the elites benefit with higher prices and secure market shares for basic products like Coke, oil, catsup, milk and so forth. The poor and working class pay more and have their standard of living lowered, unemployment increased depressing wages and the “little people” really do suffer under Krugman economic policies.

Nicholas Biddle (1786-1844) understood how to limit competition and bribe politicians

If you look at the economic effects of Obama’s financial regulation bill it makes it harder for smaller banking firms to compete by increasing oversight and regulation. Krugman and the elites know this. It’s as old as Nicholas Biddle and his comrades back in 19th century New York society. Squeeze out the competition and gain market share, charge more for your services, gouge the “little people.” Give the Washington politicians bribes and cash to finance their capital projects “for the people.” Been there done that.
Now for a “real” economist like myself its not to hard to see the ulterior motives of Mr. Krugman. When he talks about price floors on energy I see through it. The poor do not deserve air conditioning or heat.
When he talks about protecting the poor by taxing the top 2% I get it. We don’t need more capitalism but must transform society to a socialist statist form of government. The poor and middle class are consuming more than they need to in Mr. Krugman’s view and they should not be allowed to join the ranks of the elites.
When he vilifies Steve Forbes “defending the interests of the rich” I get it. Mr. Forbes should shut up and enjoy his privileged status and stop talking about capitalism and its benefits.
Unfortunately millions of Americans do not. Krugman and his Keynesian buddies are charlatans spreading myths and lies throughout the land to protect their privilege class and status. Dare we ask Mr. Krugman who benefits from centralized government planning? Could it possibly be Mr. Krugman and his statist at the New York Times? Would a Obama dictatorship let the New York Times go bankrupt? Krugman and his pals enjoy the best lifestyle in the world by supporting the elites. Why would he want to change? It’s sickening to realize millions take a bastard elitist like Krugman at face value.
I feel bad in a way about not showing Krugman videos. Freedom of speech right? I guess in ten years when the Keynesians are totally discredited and removed from economics text books across the land I will show video of Krugman like a history teacher would show film of Hitler in 1955 ten years after the end of WWII. Right now as we are in the mist of this horrible economic turmoil caused by Krugman, Bernanke, Greenspan, Bush, Obama and the thousands of Keynesians in Washington spreading this garbage to our leaders. It’s all just too painful to watch. Sorry kids maybe someday you will understand.