Saturday, November 14, 2009

Anti-Krugman shot of the day. 

Taken by economist Steven Landsburg on his new blog...
Itís always impressive to see one person excel in two widely disparate activities: a first-rate mathematician whoís also a world class mountaineer, or a titan of industry who conducts symphony orchestras on the side.

But sometimes I think Paul Krugman is out to top them all, by excelling in two activities that are not just disparate but diametrically opposed: economics (for which he was awarded a well-deserved Nobel Prize) and obliviousness to the lessons of economics (for which heís been awarded a column at the New York Times).

Itís a dazzling performance. Time after time, Krugman leaves me wide-eyed with wonder at how much economics he has to forget to write those columns. But todayís, on why America should consider European-style employment protection, is his masterpiece. It opens thus ... [more]
Paul really knows how to inspire people!

And I have to admit, when I see him writing...
we could have policies that support private-sector employment. Such policies could range from labor rules that discourage firing
... Mein Gott in Himmel! Sacre Bleu! I feel a bit inspired myself.

What's the first thing employers do when governments impose rules making it harder to fire workers?

Answer: They slash hiring, for fear of becoming stuck with low-quality workers (or workers who decide to take advantage of the new rules to slack off), hiring instead only those they can be absolutely most sure of. A good 25 years of unemployment in France averaging 10%, a level seen in the US only once every 27 years or so in a "great recession", shows that plainly enough.

In this column Krugman praises German employment policy for keeping unemployment down. Did he praise it during the previous 12 years when German unemployment averaged 8.8% (higher than seen in the US since the 1982 recession) versus the US's 5.0% ... did he praise how in 2005 it kept German unemployment down to only 10.6% (higher than in the US today) while the US level was 5.1%?

Just wonderin'.