I’ve poked fun at Paul Krugman for his views on health care and British fiscal policy, and I’ve semi-defended him about unemployment subsidies and housing bubbles.

Now it’s time for some more mockery.

Back in 2001, Paul Krugman received some much-deserved criticism for stating that the 9-11 terrorist attacks would be stimulative for the economy.

He committed the “broken-window” fallacy, popularized more than 150 years ago by a famous French economist, Frederic Bastiat.

Breaking a window at the local bakery, Bastiat explained, might generate business for the town glazier, but only at the expense of some other merchant, like a tailor, who would have benefited if the baker didn’t have to spend money on a new window.

In other words, the destruction of wealth is not good for an economy. At best, it makes us poorer and then shifts how current income is allocated. This is why Bastiat wrote (perhaps predicting the emergence of Krugman):

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

But we have to give Krugman credit for a bizarre form of ideological consistency. He is willing to advocate bigger government, no matter how sloppy the reasoning or how quirky the rationale.

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Last week President Obama began the blitz which, barring Republican collapse (read on) could last for the next two years, pushing his State of the Union call for American taxpayers to hand over even more billions to underwrite a supposed ‘clean energy’ future.

By chance, I read of this between sessions conferring in London and Brussels with leading experts on the disastrous folly of Europe’s experiment with the ‘clean energy economy’. We know that this is the same disaster that President Obama is now doubling down on as an economic recovery plan because he used to admit as much.

But in his new push the president has toned down the European roots of his model, as well as the planetary salvation rationale for energy rationing. This is because, respectively, the success stories all proved to be black holes which European governments are now trying to walk back, and the public turned against the global warming campaign.

So it was with great amusement that I caught, on my flight back this weekend, some art imitating life in a spectacularly appropriate way. Accountant Leo Bloom revealed to producer Max Bialystock, “under the right circumstances, a producer could actually make more money with a flop than he can with a hit”. Voila! There you have, in a Broadway second, President Obama’s ‘clean energy’ agenda.

Government Electric – once a bastion of American genius now fallen to being no more than a government front company – and the rest of the ‘renewables’ Music Men (to note another apt vehicle) are the Bialystock and Bloom of policy. They seek to make their fortune by producing flops. But since their ‘markets’ are arranged by pals in government and not due to performance, it works. That’s the beauty of it.

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I just returned from speaking to two terrific groups about California’s looming ballot initiative, Proposition 23, to delay implementation of the state’s climatically meaningless, economically suicidal state-level adoption of the Kyoto agenda, called AB 32.

On the flight out I pulled out my pocket Bastiat reader, which I carry everywhere but hadn’t re-read in a while. There, in the opening, brilliant essay “What is Seen and What is Not Seen” — a work that perfectly nails Obamanomics, and the entire ‘green jobs’ fallacy that is the latest re-branding of central planning (if in its most devastating form: mandating energy price hikes on top of generational debt) — I ran across a stunning reminder:

In noting what the state is going to do with the millions of francs voted, do not neglect to note also what the taxpayers would have done—and can no longer do—with these same millions. You see, then, that a public enterprise is a coin with two sides. On one, the figure of a busy worker, with this device: What is seen; on the other, an unemployed worker, with this device: What is not seen. The sophism that I am attacking in this essay is all the more dangerous when applied to public works, since it serves to justify the most foolishly prodigal enterprises. When a railroad or a bridge has real utility, it suffices to rely on this fact in arguing in its favor. But if one cannot do this, what does one do? One has recourse to this mumbo jumbo: “We must create jobs for the workers.”This means that the terraces of the Champ-de-Mars are ordered first to be built up and then to be torn down. The great Napoleon, it is said, thought he was doing philanthropic work when he had ditches dug and then filled in. He also said: “What difference does the result make? All we need is to see wealth spread among the laboring classes.”

Spread the wealth around. So here we have Obamanomics in a nutshell.

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The Atlas Economic Research Foundation – a libertarian leaning organization – recently released a video featuring Foundation Vice-President Tom G. Palmer. Titled “Free Trade: The Great Prosperity Machine,” the video aims to make a compelling case for why free trade is good for everyone, not just foreign competitors, and makes reference to the classic libertarian economist Frederic Bastiat. Interested viewers can look here:

However, there are some problems with the video. For one thing, I’m not sure precisely who Palmer thinks his audience is, or who he wants it to be. Is he trying to persuade people on the Left? If so, then I don’t know how effective it is to talk about the benefits of exchange, since most Leftists view the exchanges that go on in trade relationships as fundamentally exploitative.

Moreover, Palmer’s argument that trade generates peace, while it could persuade some people to switch their position, probably won’t make a dent in the hardcore isolationist Left, which views trade as just another element of the military industrial complex and of the globalized order that underlies it. Maybe Palmer intends his video to speak to the more moderate technocratic Left, insofar as he uses scientific metaphors, but this seems like preaching to the choir. The moderate technocratic Left, as personified by Bill Clinton, has often been an ally of the internationally-oriented Right and the libertarian movement when it comes to trade, and I have yet to see any indicators that this attitude is changing.

What about the protectionist Right? Here things aren’t particularly encouraging either.

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In watching this year’s NCAA tournament, one finds it hard to miss the hip commercials for the 2010 Census. Invariably, the emphasis of these ads is on people gaining “representation” in the form of their piece of the public funding pie. Personally, I find the whole parasitic charade sickening.

The Founders must be turning over in their graves knowing how much something as simple as the Census has been twisted as a result of a government that has so obfuscated the General Welfare clause that it has deemed the Constitution worthless. Where the Census was created with the purpose of representative apportionment, with the parties in power in the states unfortunately gerrymandering districts so as to solidify their political strongholds and marginalize their opponents, reflecting the transformation of our country, this time around the focus of the Census is on ensuring the proper allocation of $400 billion of public money.

Where are we as a nation when it becomes the patriotic thing to do to fill out a form for the purpose of sticking our paws in a $400 billion honeypot? The commercials would be far more honest if they merely stated, “Make sure to fill out the Census so you can feed at the collectivist trough.” What kind of message does it send to immigrants and the poor when we say that the key to improving one’s lot is to make sure one gets one’s fair ration of taxpayer money?

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You and I have a rendezvous with destiny.  We’ll preserve for our children this, the last best hope of man on earth, or we’ll sentence them to take the last step into a thousand years of darkness.

Ronald Reagan spoke these words some forty-six years ago in his famous “A Time for Choosing” speech.  Tragically, today in America it appears the time for choosing is fast passing. As each day goes by our debt grows more untenable; our security more imperiled; our economy more shackled; our government more tyrannical.

These are symptoms of an America that has chosen the wrong path.  We lost our way on the road to civilization, veering onto the road to serfdom. Our plight is the result of a hundred-plus year campaign by the socialist sophists to slowly but surely undermine the bedrock principles on which we had built our strength.

While the ends of a nation are peace, prosperity and culture, from our founding there was a dichotomy of opinion as to how best to achieve these ends.  It was not merely a matter of state versus federal or small versus big government.  Rather, at its core the split rested and continues to rest upon embracing liberty or embracing tyranny.

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