Krugman and Schramm: The Fool and the Wise Man

Paul Krugman, post-election: "It is true that we've been adding jobs at a pretty good pace and are quite close to full employment."

Prof. Carl J. Schramm, Opinion in 16 Nov 2016 Wall St. Journal:  "Despite the addition of 161,000 jobs in October, the labor-force participation rate fell to its second lowest level in nearly 40 years, according to the St. Louis Federal Reserve.... America needs at least 325,000 new jobs every month to stanch the growing numbers of discouraged workers, according to the Bureau of Labor Statistics."

How low the left sets the bar for employment!  High employment is clearly not one of their premier goals.

Prof. Schramm, of Syracuse University, once headed the Kaufmann Foundation, which promotes American entrepreneurship.  He notes that:

• Firms less than 5 years old create more than 80% of new jobs.
• Fewer than 500,000 new businesses were started in 2015, which is a 30% decrease since 2008.
• Over the last 8 years, the number of new businesses has decreased by more than 1 million.  The missing new businesses mean 7 to 10 million missing jobs, which would have been enough to provide jobs to the millions of discouraged workers.
• New businesses are more likely to be started when the economy is growing at a 4% rate than when it is growing at a 2% rate.  The faster growth rate gives consumers the confidence to buy the innovative products of start-up companies.
• Too much attention is given to Silicon Valley whose start-ups are only about 5% of all start-ups and have higher failure rates and create proportionally fewer jobs than the businesses started by franchisees, which are 40% of all new businesses.
• Dodd-Frank suppressed the financing by local banks of local businesses in their communities, whose business prospects they are best qualified to gauge.
• Municipal regulations are particularly protective of older businesses and likely to discriminate against new businesses.

Address these problems and he says we can enjoy 4% economic growth.  The first step was to remove the anti-jobs, anti-business party from the presidency.

Krugman Demonstrates Lack of Focus Once Again

Paul Krugman has once again demonstrated his lack of focus and poor reasoning skills.  His column criticizes Ayn Rand, Paul Ryan, and Ted Cruz.

He claims that Ted Cruz's tax reform plan will increase taxes on the poor and he references this analysis by the Tax Policy Center of the Urban Institute and Brookings Institute, for a very socialist viewpoint on Cruz's tax plan.  So what does that report say:

In 2017, the proposal would cut taxes at every income level, but high-income taxpayers would receive the biggest cuts, both in dollar terms and as a percentage of income.

This is not a tax increase for the poor as Krugman claims.  Of course the poorest, who pay virtually no taxes now, will not get as big a tax reduction as will high-income taxpayers.  The report does go on to make a prediction based upon a leftist view of the economy that by 2025, the lowest income quintile will be paying $116 more a year in taxes than they would under the present income tax scheme.  Of course, they also assume that Cruz will not succeed in reducing the size of the government relative to the size of the economy and who knows what other assumptions based on a dismal growth of businesses and a failure to count the value of welfare payments to the poorest quintile.  This economic model is likely no more sound than are the computer models that supposedly buttress the catastrophic man-made global warming hypothesis.

Krugman also seeks to discredit Paul Ryan by claiming that Ryan has said he returns over and over to read Francisco D'Anconia's Money Speech from Atlas Shrugged.  According to Krugman the Money Speech is:

one of the interminable monologs in Rand's "Atlas Shrugged"

A monolog less than four and a half pages long is too much for Paul Krugman's ability to focus and think.  He, though supposedly an economist, has little interest in the morality of Capitalism and needs escapist novels to pander to his inability to focus and reason.

Krugman Claims Europe is Economically Successful, Proving Socialism Works

Paul Krugman says:

Europe is an economic success, and that success shows that social democracy works.

Since 1980 -- when our politics took a sharp turn to the right, while Europe's didn't -- America's real G.D.P. has grown, on average, 3 percent per year.  Meanwhile, the E.U. 15 -- the bloc of 15 countries that were members of the European Union before it was enlarged to include a number of former Communist nations -- has grown only 2.2 percent a year.  America rules!

Or maybe not.  All this really says is that we've had faster population growth.  Since 1980, per capita real G.D.P. -- which is what matters for living standards -- has risen about the same rate in America and in the E.U. 15:  1.95 percent a year here; 1.83 percent there.

Seems interesting and perhaps surprising, but wait.  Think about it.

First off, in 1981, not 1980, we stopped moving deeper into socialism, but we did almost nothing to reverse it.  In 1988, we restarted our momentum down the socialist path under the first President Bush with President Clinton and then the second President Bush continuing the slide into the numbing clutches of socialism.  We now have the highest corporate tax in the world, excepting Japan whose corporate tax will be lower than ours starting in 2011.  Meanwhile, many of the European countries have been reducing their corporate taxes and many other business taxes.  Some have adopted flat rate income taxes with growth rates increasing as a result.  Many of the nations have returned state-run enterprises to the private sector.  Yes, there are many legacies of socialism in Europe and yes, they are still enamored of it in many ways.  At the same time, they have come to understand that there are economic penalties associated with it and they have backed off from socialism somewhat. The effects of the long term legacy of socialism are stronger in the comparison between the U.S. and Europe than have been the effects only compared in the window since 1980 as Krugman does.

There are other problems in the comparison.  One is that our population growth is not just a variable in need of correction.  It is due to Americans having a more positive view of the future, which the socialist environment seems to kill off.  This makes it more tempting to have children.  It is also due to the fact that we allow very high levels of immigration to the U.S. and many of our immigrants are very poor as they begin their life here.  Many take years to learn the skills that native Americans have.  But, let us leave this caveat aside and look at the more meaningful per capita GDP numbers corrected for Purchasing Power Parity (PPP).  This information is available at a Blog called Political Calculations in a post entitled Battle of the Titans: U.S. vs E.U. GDP per Capita, 2008.

We find there that:

United States 2008 GDP-PPP is $45,588.10

European Union 2008 GDP-PPP is $31,182.49

The U.S. beats the complete E.U. by miles and miles, or more than 46%!  But this is not what Krugman was comparing.  He left out the newer members of the E.U. to exclude those most hurt by their prior experience with socialism.  So let us look at the results on a country by country and a state by state basis while ordering them together, with the E.U. countries in red (note that Norway and Switzerland are not E.U. countries) in the table at the end of this article.

Luxembourg does well and beats the U.S. average, but it comes in behind the District of Columbia and has a bit less than half the GDP-PPP of D.C. and it has a smaller population, so it does not raise the E.U. result relative to the U.S.  The next country on the list is Ireland, which comes in just behind the U.S. average of $45,588.10 with $45,475.12.  Then the Netherlands and Austria manage to beat 16 states.  Sweden, which has made a strong reversal of its socialist model lately, beats out the nine poorest U.S. states, but loses to the Okies!  The United Kingdom only beats seven states, finishing behind Montana.  Germany beats only five states and loses to Alabama.  France and Italy can only beat Mississippi!  None of the other countries of the E.U. can beat any state of the U.S.

So despite the fact that many of the European countries have been backing away from socialism and the U.S. has been moving deeper into its clutches, the standard of living in the U.S. is clearly much higher than that of Europeans with their long history of embracing socialism, even gussied up as social democracy.  The upcoming election should slow down our present slid deeper into the quagmire of socialism.  As the table below makes clear, you have to weigh a horror of seeing anyone around you who is better off materially than you are very heavily to find any reason to think socialism will give you a higher standard of living.  I do not believe any thinking Americans really want to trade places with European countries on this list and we should be able to agree that the Paul Krugman claim is false.

Krugman: Advisory Panels will Reduce Costs with Rationing

Paul Krugman, the Progressive economist writing for the New York Times and a major spokesman for the Progressive viewpoint, said on ABC News Sunday during the show "This Week" that

The People on the right, they're simultaneously screaming, 'They're going to send all the old people to death panels,' and 'It's not going to save any money.

The advisory panel which has the ability to make more or less binding judgments on saying this particular expensive treatment actually doesn't do any good medically and so we are not going to pay for it. That is actually going to save quite a lot of money. We don't know how much yet. The CBO gives it very little credit but, but most, most of the health care economists I talk to think that's going be a really, uh a really major cost saving.

Krugman is saying that the ObamaCare program will have to ration medical care more than it presently is rationed in order to save money.  It will do so with advisory panels whose decision is close to that of the Grim Reaper in finality.  The patient and the doctor and the patient's family will have little to no say.  The advisory panel's decision is "more or less binding."  It is dictated.

Note the sleight-of-hand in his first statement in which he concatenates the critic's statement that rationing will occur and it will result in more deaths with their statement that ObamaCare will cost a lot more money and raise premium prices in such a straw-man way as to make the statements appear to be contradictory.  Yet, it is elementary, my dear Krugman, to note that the latter statement of ObamaCare raising net costs does not mean that ObamaCare will not take desperate measures to ration really important care in life and death situations in order to free up money to pay for the much added costs of people seeing a care provider for their many sniffles.

So, as I have noted many times, ObamaCare must ration medical services.  Of course medical services are always rationed.  They used to be rationed by a combination of the ability to pay and the willingness of doctors to provide the truly needy with free or greatly reduced cost care.  Now they will be rationed by an Obama advisory panel of government bureaucrats, who will come between the patient and his family and the patient's doctor, who will not really be the patient's doctor at all, because the doctors will all be owned by the government.  Now, how many times did Obama and his horde of allies tell us that "No one will come between you and your doctor."?????

While it is true that medical care is and always must be rationed, there are very important further differences in which care will be rationed.  ObamaCare will measure its success in the number of doctor visits made to address the sniffles.  There will be many more such visits to the doctor than now because people will not have to pay out of their own pockets for those visits.  They have also committed ObamaCare to much more preventive medicine, even though this also drives cost up, contrary to their claims.  The extra sniffles visits and the preventive medical care will drive the total cost of medical care sharply upward.  At least partially compensating savings will have to be made.  Now, where can savings be made?  Given the ObamaCare commitments, the only time to save lots of money is when most medical expenditure has occurred in the past.  Very rationally, this has been when the care was most needed to extend life and is usually encountered with older people or babies.  Obama and his friends have made it very clear in unguarded moments in the past, that they do not like the fact that so much medical money is spent on babies and the elderly.  They have argued that babies and the elderly have little social value.  They have complained very bitterly about this, but by hiding it in general statements such as Americans spend too much on health care during the recent debates.

So, the advisory panel will look at cost to life extension and future life quality and decide what procedures are worth it, given the budgetary constraints of ObamaCare.  Procedures that were worth the effort to doctors, their patients, and their insurance companies will now be deemed not worth it.  There must be added savings to compensate for the sniffles and the preventive medicine.  The advisory panel will have to decide that grannies and babies who used to be worth the medical effort to save are not now worth the medical effort to save.  However much, the Progressives do not want these panels to be called Death Panels, they are tasked with the necessary job of pulling the plug on granny or your newborn baby.  The plug will have to be pulled much more frequently than we as free people ever allowed it to be pulled.  Now that all value decisions are to be made on a collective basis, your granny and your baby are worth much less in the future than they were in the past.

So, the reality is that just as the Progressive tries to hide the fact he is a Socialist behind a deceiving name implying he is the Angel of the Future Better Society, his Advisory Panel is exactly what Sarah Palin called the Death Panel.  The Advisory Panel serves the purpose of the Grim Reaper, who must cull society of its weak members.  The Weak are Expensive and not Worth it to the Collective.  And on and on, they will insist that we are not fair in identifying them as Socialists.

Our granny may be weak, but when she was our granny, she was loved and she was valuable.  Under ObamaCare, our granny is just a nationalized wee little bit of the Collective.  She is no longer your granny.  She is old and weak and not much regarded by the Collective.  Granny is now very expendable.  So is your newborn baby, if your baby has a serious health problem.  Get used to it.  Or, man the barricades and fight as you have never fought before to save your granny and your future babies!

This is not the time for Summer Soldiers, this is the crisis that can only be met by Winter Soldiers!  We must stand for the equal, sovereign rights of the individual to life, liberty, and the pursuit of happiness.  We must realize that our individual rights and our individual values mean nothing to any too powerful government.  They never have in all of history.  Our Founding Fathers and the Framers of the Constitution knew this very well.  They gave us a Constitution which tightly constrained the federal government with very limited powers in order to protect our individual rights and values.  Our federal government has pushed and pushed to expand its powers far, far beyond those given to it in this wonderful Constitution.  The People have not stopped them in this expansion of government power to this time.  Will you finally become the Winter Soldier for Freedom to save your granny and your future baby?  If you will not, you consent to their being expendable.