Paul Krugman - Lets imitate Germany

Here's Paul Krugman, who won a Nobel in Economics for consistently saying that the economic policies of George W. Bush, the failed economic policies of the past 8 years, were bad, bad, bad.

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?

No.

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.

Rich Germans Demand Higher Taxes

From the BBC:

A group of rich Germans has launched a petition calling for the government to make wealthy people pay higher taxes.
The group say they have more money than they need, and the extra revenue could fund economic and social programmes to aid Germany's economic recovery.

If someone believes that government spending is the answer, and that person voluntarily throws more money into the gaping maw of the beast, that person is worthy of our grudging respect.

If someone believes that government spending is the answer, and that person advocates forcing others, at gunpoint, to throw more money into the gaping maw of the beast, then that person is beneath contempt.

Germany could raise 100bn euros (£91bn) if the richest people paid a 5% wealth tax for two years, they say.

But do you think they would leave their 100% intact in Germany to allow earnest pocket-pickers to have their way with it? Or do you think this wealth tax would have some unforeseen effects?

The petition has 44 signatories so far, and will be presented to newly re-elected Chancellor Angela Merkel.
The group say the financial crisis is leading to an increase in unemployment, poverty and social inequality.

Which is more likely to increase unemployment - allowing the wealthy to invest their money in whatever they they believe will create the biggest return on investment? Or letting the government spend the money on some random unholy cause?

Simply donating money to deal with the problems is not enough, they want a change in the whole approach.
"The path out of the crisis must be paved with massive investment in ecology, education and social justice," they say in the petition.

Call the folks at the Good Intentions Paving Company. The road to hell is about to get some work.

Those who had "made a fortune through inheritance, hard work, hard-working, successful entrepreneurship, or investment" should contribute by paying more to alleviate the crisis.
The man behind the petition, Dieter Lehmkuhl, told Berlin's Tagesspiegel that there were 2.2 million people in Germany with a fortune of more than 500,000 euros.
If they all paid the tax for two years, Germany could raise 100bn euros to fund ecological programmes, education and social projects, said the retired doctor and heir to a brewery.

Idea for a short-lived blog....a list of succesful government funded social projects.

Signatory Peter Vollmer told AFP news agency he was supporting the proposal because he had inherited "a lot of money I do not need".

Pete, here's an idea. Invest your money with someone who wants to grow and hire people. Put it to work. Don't invest it in a grievance factory.

He said the tax would be "a viable and socially acceptable way out of the flagrant budget crisis".

That was the #2 money quote right there. Socially acceptable. Because creating jobs by producing things people need is just so....tacky.

The group held a demonstration in Berlin on Wednesday to draw attention to their plans, throwing fake banknotes into the air.

Here comes the #1 money quote, and it's a good one:

Mr Vollmer said it was "really strange that so few people came".

Peter Vollmer, please step away from the Kool Aid.

Picture of Euros being pointlessly burned came from here.