Wednesday, August 07, 2013

Teh Stupid: Krugman

Charles McMillion makes a point.

...Over the past 30 years of lobbying by the financial sector in Washington and support by naive academics for "free" trade, the normal, small U.S. trade surplus in goods and services has turned into an unbroken torrent of 30 consecutive annual deficits that now total an astounding $9 trillion of which $7.7 trillion is for manufactured goods. 

As Detroit demonstrates, production, businesses and jobs lost to imports are not merely "displaced" and automatically moved to other, more productive and higher-wage uses -- as many economic theorists still claim. In fact, the Labor Department has tracked workers displaced by cutbacks and closings since 1979 and most such workers -- especially in manufacturing -- are either permanently forced out of the paid labor force or eventually forced to take sharp cuts in pay, benefits and hours. 

The cuts in compensation for displaced workers reflect the drive to less productive jobs and businesses that are protected from import competition in industries such as health care, education, entertainment, tourism, retail sales and now many levels of "homeland" security. Over the past 30 years of worsening trade losses, all of the net new jobs in the United States are in services. Most all of these jobs have been immune to outsourcing or imports -- although this, too, is changing quickly.

THAT is not what makes Krugman and his fellow-traveler pointy-headed academics stupid, although it's a big part.

HERE is what makes him a Stupid:

...Detroit is ridiculed for not adequately adapting to the low-wage global and subsidized "market," with New York Times columnist Paul Krugman literally raising the cliche of "buggy whips," blithely urging Detroit to find a new competitive advantage. (Who wants to buy autos today?) Like others, Krugman is silent about any new industries, jobs or businesses that could provide good salaries to hundreds of thousands of people in Detroit and millions elsewhere in the country who have been displaced by surging imports.

Krugman and the rest of the Theoretical Class (read:  rulers-with-Ph.D.) haven't a clue as to what will "replace" the jobs now vanished from the auto industry.

Not. A. Clue.  Nonetheless, they pontificate.


Anonymous said...

Here's Geg Mankiw completely flaying Krugman's Detroit argument:

Dad29 said...

I see that Capper's Crowd of ignorant sluts is still active.

And that the syphilis has affected their brain, as is usually the case.

Comment removed....

Grim said...

This is just what I've been saying for a while now -- not about Krugman, whom I ignore, but about the problem of the economy. If there's going to be widespread prosperity of the kind industrial society got us, we need some analog that creates not just a producer but a consumer class.

I think I do know what the future looks like: I think it looks like biotech. But the people who will have the greatest demand for biotechnology are going to be those with the least capacity to obtain new income, or to take new jobs of the sort the industry will create. (I.e., the elderly, followed by seniors generally, followed by the middle-aged.)

So we can't expect the job to be the source of income for biotech-consumption, but we need those with the greatest demand to be able to actualize that demand by having ready access to the resources for consumption. That's what will continue to drive new investment and expansion in the biotech industries.

It's a solvable problem, but not on the current model.

Anonymous said...

Christian values at 11:16 a.m. on display, eh, Dad29?

Anonymous said...

And nice Christian values you let on this board, Dad29. Links to gay porn?

What a terrible Christian you are, Dad29.

Anonymous said...

Yet the, would be, Dad found links to the Guardian offensive enough to delete.

The trouble with legacies is that they seldom have the talent of their forefathers.