The fact that Paul Krugman received the Nobel Prize in economics makes sense given that both Al Gore and Obama received the Nobel Peace Prize. But that is the only way that it makes sense.

In his December 29^th column in the New York Times, Keynes Was Right, he continues to make the case that the only reason we haven’t come roaring out of the Great Recession is because we spent too little.

Krugman cites the downturn of 1937 when FDR’s government programs were curtailed and unemployment rose. He says that unlike in that fateful year we should instead redouble our efforts and spend more to prime the economic pump. Austerity is insanity he says. We must spend more as Keynes would have advised, deficits (and inflation) be damned.

Build pyramids as Keynes said we should. So what if the they do not contribute, and probably detract, from the quality of the economy. It is the quantity of economic activity that we are interested in not quality. Get people employed doing whatever. This is the road to prosperity!

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When the House and Senate go back into session on January 17th and January 23rd respectively, shortly thereafter the Congress is expected to take up the issue of raising the nation’s debt ceiling from $15.2 trillion to $16.4 trillion, an increase of $1.2 trillion.

Communicating and visualizing a “trillion” of anything is difficult.  So let’s put a “trillion” in perspective.  According to CNBC.com:

This stack of cash - in $1 bills - would measure 67,866 miles, stretching approximately 2.72 times around the Earth’s equator.

If denominated in $100 bills, $1 trillion would be enough to fill 4.5 Olympic-sized swimming pools, with a total volume of 398,000 cubic feet. For comparison, there is only about $625 billion worth of $100 bills currently in circulation, according to the US Treasury bulletin, which would fill about 2.8 Olympic swimming pools.

With Occupy Wall Street’s “redistribution” rhetoric running rampant, perhaps another way to illustrate the enormity of America’s trillions of new debt is this: even if the government were to confiscate the net worth of the entire Forbes 400 list of richest Americans–people who create hundreds of thousands of jobs, as well as spin-off jobs and businesses–their combined $1.5 trillion of wealth would barely cover the forthcoming $1.2 trillion debt-ceiling increase.

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January 23, 2013

White House, Cabinet Room

First meeting of President Obama’s new team

OBAMA: Listen up, people. I got myself across the finish line but couldn’t bring Congress along.  That’s why you’re here.  Except for Defense, you represent the first entirely recessed Cabinet in American history.  Do me proud.  Michelle?

MICHELLE: I’m the new Chief of Staff. You want to see him, you gotta get past me. Waste my time, I’ll cut your budget 10%.

OBAMA: So, let’s hear some fresh ideas.  HHS?

MICHAEL MOORE: Now that the World Court has overturned the Supremes and ruled the PPACA [ObamaCare] constitutional, sir, amend the program to cover all humanity.  Eventually, include lesser beings, as well.  Innumerable uninsured creatures are suffering out there.

OBAMA: Easy, big guy; we’ll do it in stages.  After people, we insure the remaining mammalians; then, things with legs; finally, air breathers.  Treasury?

PAUL KRUGMAN: I’ve run the numbers, sir: Stimulus IV should tip the worldwide economy into depression within a year.

OBAMA: Good.  That gets us closer to the one-world government mankind will demand I lead to left the—I mean, to right the ship.  I’m getting bored with the Presidency, anyway. OMB? (more…)

When I introduced the concept of regime uncertainty in 1997, attempting to improve our understanding of the Great Depression’s extraordinary duration, I anticipated that many people—especially my fellow economists—would not welcome this contribution. Their primary objection, I ventured, would be that the concept remained too vague and, most of all, that it had not been reduced to a quantitative index of the sort that modern mainstream economists customarily work with, especially in their empirical macroeconomic analyses.

My argument did not lack evidence, however, and I regarded the agreement of several different forms of evidence as an important element of the argument’s force. The evidence I adduced with regard to changes in the yield spreads for high-grade corporate bonds of differing maturities seemed to me both systematic and especially compelling, though not decisive because alternative explanations of those changes might be offered. (I considered several such explanations and rejected them as unpersuasive in one way or another.) Recently, in my application of the concept of regime uncertainty to help us understand better the persistent economic troubles since 2007, I again advanced several different kinds of evidence, including as before an analysis of changes in the yield curves for high-grade corporate bonds. This time, too, the evidence is consistent with the underlying argument.

Nevertheless, the argument scarcely gained widespread assent, and most analysts either ignored it completely or, like Paul Krugman, dismissed it as a fairy tale—in his view, the sort of wholly fictitious notion that would be peddled only by think-tank whores in the pay of Republican plutocrats. (I trust that everyone who knows me will see how closely I fit this template.)

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The left is trying to find a way to avoid talking about the Solyndra scandal. For example, Kevin Drum at Mother Jones advises his readers to spin Solyndra as just another free market failure: “There was no scandal in the loan process, and there’s nothing unusual about having a certain fraction of speculative programs like this fail. It’s all part of the way the free market works.”

Drum’s excuse is laughable. But it’s also bad for the cause he wants to advance. If you still believe, as most on the left do, that we need government spending to create jobs, your only fallback thus far in the face of the failed stimulus has been the Paul Krugman line: that we ought to have spent more. That argument itself has failed because of our increasingly urgent debt problem.

Solyndra could provide the left with an alternative: the argument that Obama was right to spend, but he spent corruptly, and therefore unwisely. That’s a line that would let Keynesians separate the theory of the stimulus from its execution. It also would allow the left to attack corporate special interests–something it is quite eager to do, rightly or wrongly, when a Republican is in power.

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The ultra-liberal Huffington Post blared that President Obama: “MOVING TO AVOID POLITICAL SUICIDE”; as the White House abandoned efforts to pass his American Jobs Act and went into a maximum defensive mode to save the President’s imploding re-election campaign following the loss of Anthony Weiner’s ultra-Democrat New York House seat and the launch of an inter-party rebellion to deny Obama the Democratic nomination for President.

The President took his best shot at trying to sell America his vision for new stimulus spending in last week’s joint- session of Congress speech the main-stream-media adoringly termed: “forceful yet plain-spoken message on jobs and the economy”. Hope for the bill’s passage wilted on Tuesday with front page article: “Support for Big Government Jobs Programs has Evaporated” simultaneously published in the conservative Big Government and the ultra-liberal Huffington Post. The story revealed a 50% opinion poll plunge in “likely voter” support for spending on job creation has doomed much of the bill.

Legislative losses can cause political damage to any Presidential Administration; but the stunning blow last night as voters in New York’s 9th Congressional District, formerly held by disgraced Democrat Anthony Weiner, reversed a nearly 90-year tradition by electing a Republican has begun what Andrew Breitbart termed a “Civil War Against Obama”.

The first hint there might be a coup d’etat brewing against the President by the extremist wing of his party came ten days ago in an Op Ed by Mat Stoller: “What Democrats can do about Obama” published in the liberal “Salon” website.

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Big Journalism’s Larry O’Connor yesterday highlighted New York Times columnist Paul Krugman’s unhinged screed that marked the 10th anniversary of 9/11 — an attack on common decency for which Krugman (conveniently) refused to allow any comments. But in his mean-spirited and wholly inappropriate post, Krugman revealed more than he realized about the state of liberal/leftist thought in America today — and the frustration leftists foster about the current state of our politics.

To quickly recap, Krugman wrote:

What happened after 9/11 — and I think even people on the right know this, whether they admit it or not — was deeply shameful. Te [sic] atrocity should have been a unifying event, but instead it became a wedge issue. Fake heroes like Bernie Kerik, Rudy Giuliani, and, yes, George W. Bush raced to cash in on the horror. And then the attack was used to justify an unrelated war the neocons wanted to fight, for all the wrong reasons.

Such a passage makes me wonder if liberals of Krugman’s ilk even hear themselves? I know Krugman thinks Bush is a “fake hero,” because he hates him with a blinding passion. But he wedges W in there as almost an afterthought among his parade of “fake heroes” — ” … and even George W. Bush.” Before that, Krugman calls Rudy Giuliani a “fake hero.”

Now, Giuliani would be the first to reject the “hero” label, because he knows who the REAL heros are. He saw many of their dismembered bodies in the rubble of the WTC. He went to funerals for months on end. But what Giuliani did was of enormous value to the city of New York and the nation: He stayed calm in the face of enormous chaos and fear. And he acted as a leader — as did Bush.

Giuliani suffers in the measure of Krugman (as did Bush) for the same reasons. Both men were non-liberals (non-Democrats) who earned the admiration of the people. Krugman thought he’d be able to belittle Bush for the entirety of what he thought would be one quick term as a “pretender” who “stole” the election from Gore. Only now, of all days (but without comment), does Krugman feel the urge to scratch that long-neglected itch.

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Is Obama Smart?  It’s a question that more and more people are asking.  His devoted fans like to note that he made it through Columbia and Harvard—supposedly a stark contrast to Rick Perry’s less-than-stellar transcript from Texas A&M, though Obama’s refusal to release his own transcripts does blunt the comparison.

More to the point though, the evidence seems conflicting.  On the one hand, he ran a remarkable campaign in 2008.  He sensed what the American people needed to hear, and he emerged from nowhere to defeat vastly more qualified opponents.  On the other hand, his performance as President has been dismal.  Most Americans recognize that his policy preferences range from the irrelevant to the counterproductive, and leftists contend that he has been ineffectual in pursuit of their agenda.

So is Obama smart?  Yes.  Obama is a certain kind of smart.  Unfortunately, it’s the wrong kind.  President Obama is the sort of smart that our finest institutions recognize, promote, and reward.  There is no surer path to academic success than learning the orthodoxy of your field and the particular bent of your professor; explaining why only those blessed with suitable experience, training, and insight can comprehend the complex problem under consideration; and then parroting the professor’s previously articulated answers shortly before he or she reveals them to the class.  Mastery of this skill continues to pay dividends in the real world, most prominently among business consultants versed in telling corporate boards what they want to hear, and attorneys capable of tailoring their arguments to the predispositions of the judges before whom they appear.

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On today’s edition of Coffee and Markets, Ben Domenech is joined by Rand Simberg to discuss the end of NASA’s manned space program, Paul Krugman’s latest idiocy regarding space, and preview of what Rand thinks the future of space exploration looks like.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Mothball The Space Shuttle
Space Policy, Explained (Part 3)
Krugman calls for space aliens to fix U.S. economy?
Paul Krugman Calls for Space Aliens to Attack Earth Requiring Massive Defense Buildup to Stimulate Economy
Perry slams Obama for closing down NASA’s space shuttle program
Rand Simberg’s Transterrestial Musings
Rand Simberg at the Competitive Enterprise Institute (more…)

Just last week, I made fun of Paul Krugman after he publicly said that a fake threat from invading aliens would be good for the economy since the earth would waste a bunch of money on pointless defense outlays.

Yesterday, there were rumors that Krugman stated that it would have been stimulative if the earthquake had been stronger and done more damage, but he exposed this as a prank (though it is understandable that many people – including me, I’m embarrassed to admit - initially assumed it was true since he did write that the 9-11 terrorist attacks boosted growth).

But while Krugman is owed an apology by whoever pulled that stunt, the real problem is that President Obama and his advisers actually take Keynesian alchemy seriously.

And since President Obama is promising to unveil another “jobs plan” after his vacation, that almost certainly means more faux stimulus.

We don’t know what will be in this new package, but there are rumors of an infrastructure bank, which doubtlessly would be a subsidy for state and local governments. The only thing “shovel ready” about this proposal is that tax dollars will be shoveled to interest groups.

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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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“Men of experience succeed even better than those who have theory without experience…If, then, a man has the theory without the experience, and recognizes the universal but does not know the individual included in this, he will often fail to cure; for it is the individual that is to be cured.” –Aristotle

Aristotle’s wise words from 2,500 years ago gives us the precise reason why the president’s statist economic policies are failing miserably. Keynesian economists like New York Times columnist and Nobel Prize winner Paul Krugman believe that during times of economic slowdown, it is the government’s responsibility to jump start the economy and spur economic growth by the government itself spending large sums of borrowed money – usually on make work public works projects. The theory goes that when the government spends large sums of money during a slowdown, this will somehow motivate businesses and consumers to spend money as well.

Two years after the president’s ’stimulus’ plan, with consumer confidence at all time lows and with unemployment at 9.2% and rising, the plan has obviously been a failure. That is why it is difficult to understand why someone of Krugman’s stature, as late as July of  this year, would argue for more stimulus spending and downplay the need to address our massive national debt when it’s obvious that the stimulus package has failed:

“What I keep hearing from Washington is one of two arguments: either (1) the stimulus has failed, unemployment is still rising, so we shouldn’t do any more, or (2) the stimulus has succeeded, G.D.P. is growing, so we don’t need to do any more. The truth, which is that the stimulus was too little of a good thing — that it helped, but it wasn’t big enough — seems to be too complicated for an era of sound-bite politics.’

“So no, I mean, the deficit doesn’t matter. The economy matters. And that’s why somehow or other, Obama has got to get jobs being created.”

Again:

“Men of experience succeed even better than those who have theory without experience”

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The Fourth of July weekend is a time when we Americans expect our 1400 newspapers to take a reprieve from their endless ridicules and criticisms to dutifully celebrate all that is good in our nation. We look forward those beautiful front page pictures and stories about patriotic parades down Main Street and glorious fireworks displays. We appreciates the Op Ed letters that express heart-felt thankfulness for the sacrifice of our troops serving in harm’s way; uplifting stories of the values that unite us as a beacon for freedom, and tales of rugged individualism that define our spirit. But there will always be one tabloid that will stand alone in failing to appreciate the true meaning of Fourth of July; the New York Times.

When the Times refers to itself as: “All the News That’s Fit to Print”; the paper expects all the unwashed proletariat must show subdued homage to the superior intellect. For this July Fourth weekend, they have achieved a new pinnacle of negativism and defeat. In contrast to joyous patriotic faire; the Times offers a despondent middle-aged woman bowing to a symbolically torn American flag forlornly fluttering in the total desolation of tornado-ravaged Joplin, Missouri.

Having established a morose mood; the Times stifles our spirit with Front Page headlines; American Folly”, “Declaration of Endurance, and “Fears of Declining”. Having sufficiently documented America as a despairing empire; Times Op Eds indict our moral decay with: “The Moral Logic of Survivor Guilt”, “It Gets Even Worse”, and “Corporate Cash Con”.

“The Moral Logic of Survivor Guilt” introduces us to the “absurdity” of U.S. military veterans who often suffer pangs of “survivor guilt” for leaving their combat units when they return home from war. The writer analyzes “just how irrational those feelings are” with the help of 19th Century philosopher Friedrich Nietzsche; who is most famous for his belief in existential nihilism that confirms life is without objective meaning, purpose, or intrinsic value; consequently God is Dead. Nietzsche describes such military self-doubt as due to a “bad conscience” for what “I ought not to have done.” Having thoroughly defamed our military; the Times offers no fair and balanced opposing writer to extol the virtues of our sons and daughters who risk the ultimate sacrifice to answer to the high moral callings of honor, duty, and valor.

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@BigGovt Q1: Rep. Ryan, thx for the Twitterview! Kindly explain, in 140 chars or less, how your budget deals with entitlements like Medicare #ryanttv

@RepPaulRyan A1: Thx! Our plan: no more empty promises; saves Medicare w no changes 4 those 54+ & real reform 4 next generation #ryanttv

Follow @RepPaulRyan

@BigGovt Q2: Democrats say they have a Medicare plan in form of ObamaCare’s $500bn cuts. Is that a real plan? Will it keep Medicare solvent? #ryanttv

@RepPaulRyan A2. No PPACA raids Medicare to pay for ObamaCare & lets bureaucrats ration care. For truth on Medicare- http://tinyurl.com/3jl6bhh. #ryanttv (more…)

London was just hit by heavy riots as part of a protest against the “deep” and “savage” budget cuts of the Cameron government. This is not the first time the U.K. has endured riots. The welfare lobby, bureaucrats, and other recipients of taxpayer largesse are becoming increasingly agitated that their gravy train may be derailed.

The vast majority of protesters have been peaceful, but some hooligans took the opportunity to wreak havoc. These nihilistic punks apparently call themselves anarchists, but are too dense to understand the giant disconnect of adopting that title while at the same time rioting for bigger government and more redistribution. My anarcho-capitalist friends must be embarrassed by the potential linkage with these angry morons.

Speaking of rage, Paul Krugman is equally dismayed with Prime Minister Cameron’s ostensibly penny-pinching budget. Summoning the ghost of John Maynard Keynes, he asserts that such frugality is misguided when an economy is still weak and people are unemployed. Indeed, Krugman argues that the U.K. economy is weak today precisely because of Cameron’s supposed austerity.

Not surprisingly, the purpose of his argument is to discourage similar policies from being adopted in the United States.

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As he sits behind bars awaiting trial, Jared Loughner is undoubtedly relishing every moment of the ruckus that he managed to stir up with his deadly rampage in Tucson.  In addition to murdering six innocent human beings and wounding more than a dozen others in an act of sheer evil, the deranged gunman has set off a media and political frenzy that refuses to abate.

By various accounts, this is precisely what Loughner was hoping for. As his close friend Bryce Tierney told Mother Jones, “I think the reason he did it was mainly to just promote chaos. He wanted the media to freak out about this whole thing. He wanted exactly what’s happening.” Ironically enough, then, many of those now engaged in the shameless finger-pointing are inadvertently advancing the goals of the madman, by fulfilling his desire to create an environment of mayhem in society.

Deploying the most acerbic members of its verbal firing squads, the left has launched volley after volley of vitriol in recent days in an effort to score some political points and paint conservatives as extremists.  But in so doing, they are merely extending the damage inflicted by Loughner into the sphere of public discourse, thereby undermining the very same foundations of civilization that the gunman himself was targeting. (more…)

For those unfamiliar with “jumping the shark”, I’d strongly suggest looking up this Hollywood idiom. It appears we are witnessing this in epic fashion as the far-left shamelessly exploits violence for the second time in four months: first, the fake explosive executions of climate change doubters in last October’s 1010global.org video; now they agonize over the very real Giffords shooting. Both showcase the far-left’s attempts to marginalize and silence their critics, while spewing the same kind of vitriol they ironically claim should end.

The 1010global.org video was the latest in a long line of vitriolic far-left rants, depicting the explicit execution of people blown up at the push of a button for not complying with an imperative to reduce their carbon footprint. It was titled “No Pressure”, a subtle message for those doubting human activity as a cause of global warming. No pressure to change, after seeing what might happen to those who don’t comply.

But what do such presentations instill in the minds of those believing man-caused global warming must be stopped at all costs? How do they react to Paul Krugman’s 6/28/09 NY Times op-ed “Betraying the Planet“, when he equates global warming skeptics with committing acts of treason? How do they feel when seeing NASA scientist James Hansen’s 2/15/09 UK Guardian op-ed “Coal-fired power stations are death factories. Close them“, in which he says, “The trains carrying coal to power plants are death trains”? Regarding Ross Gelbspan, the anti-skeptic book author I described in my two prior articles here at Breitbart, what must they think of multiple references in his 2004 book to skeptic scientists committing “crimes against humanity“? Would they find some kind of perverse inspiration when seeing IPCC scientist Ben Santer’s infamous ClimateGate email, where he mentions he would like to assault skeptic scientist Pat Michaels?

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The chart below (found also here), from Big Government contributor Veronique de Rugy clearly shows that federal employment has grown by 98,000 jobs since the start of the recession. This bears repeating, because lefty columnist Paul Krugman is furiously spinning that the increase in employment is due to Census hiring. Krugman:

But anyone paying attention knew why public employment had risen — and it had nothing to do with Big Government. It was, instead, the fact that the federal government had to hire a lot of temporary workers to carry out the 2010 Census — workers who have almost all left the payroll now that the Census is done.

Um, no.

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California State Treasurer Bill Lockyer is absolutely right to scoff at accusation in the Wall Street Journal that California is the “the Lindsay Lohan of states”. Ms. Lohan is currently in Court Ordered rehab at the Betty Ford Clinic, whereas wily California is still “at large” and making lots of new Ponzi scheme promises to pay existing municipal bondholder with future borrowings.

Treasurer Lockyer in his Op Ed crows that California has approximately $89.4 billion in revenue and only $36 billion mandated as priority to pay schools, leaving “$53.4 billion available to pay debt service on bonds — more than eight times the $6.6 billion of interest payments the state will need to make this year.” But he conveniently forgets to tell readers that those interest costs are headed to $9 billion, pension costs will double to $8 billion, the State budget has a $24 billion expected shortfall over the next 18 months; and the State must by law pay back $27 billion in short term borrowing from State agencies.

California does have many similarities to Ms. Lohan. Both were America’s premier child stars, but over the last fifteen years they have increasingly been overwhelmed by their addictions. For Ms. Lohan, the addiction is cocktails and drugs; for California, it is shopping and spending. Psychiatrists explain that addictive behavior is any behavior that has become the exclusive focus of a person’s life and physically, mentally, or socially and harms the individual and or others. The addictive behavior produces beta-endorphins in the brain, which makes the person feel “high.”

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