Free to Lose - Paul Krugman
Consider, for a moment, a tale of two countries. Both have suffered a severe recession and lost jobs as a result — but not on the same scale. In Country A, employment has fallen more than 5 percent, and the unemployment rate has more than doubled. In Country B, employment has fallen only half a percent, and unemployment is only slightly higher than it was before the crisis.
Don’t you think Country A might have something to learn from Country B?
Well, if someone were genuinely curious about the question, he would first ask "From what baseline are both countries starting?"
This story isn’t hypothetical. Country A is the United States, where stocks are up, G.D.P. is rising, but the terrible employment situation just keeps getting worse. Country B is Germany, which took a hit to its G.D.P. when world trade collapsed, but has been remarkably successful at avoiding mass job losses. Germany’s jobs miracle hasn’t received much attention in this country — but it’s real, it’s striking, and it raises serious questions about whether the U.S. government is doing the right things to fight unemployment.
Mr. Krugman might want to amend that to read "has been remarkably successful at avoiding additional mass job losses."
He goes on to suggest new programs to pay employers for employees that they don't need, using money from, uhmmm....you.
But, I digress.
Here's the German unemployment rate, relative to the U.S.
Go here to see some additional history. Any U.S. political party that tried to emulate Germany's economic policies and results - 10% unemployment during the previous economic boom - would be thrown out.
Every now and then, we have to drop back and punt. If we aren't happy with the results, we throw out the current regime and put in a new one.Don’t you think Country A might have something to learn from Country B?
In closing, here's an October, 2009 article about German Chancellor Angela Merkel's next challenge: Germany's rising unemployment rate.
What the hell was Krugman thinking?
Die quickly, mainstream media. Die quickly.
Update from 8:00 p.m. Here's what Don Boudreaux of George Mason University had to say about Krugman's article. Posted a couple of hours after mine, and making the same points and then some.
What does this mean? It means that if GMU Economics Professors and Fort Worth Shipping Managers take time out of their day to rip your editorials to shreds, just because its so dang easy, you should consider hiring a fact-checker.