The Onion Imitates the Times

Wednesday, July 08, 2009

From time to time, Glenn Reynolds will catch wind of news so ridiculous that it resembles an Onion parody, and then link to both, often under a headline like "Life Imitates the Onion." As it turns out, Alex Epstein of the Ayn Rand Institute may have upped the ante in that game.

Yesterday, Epstein noted that in 2002, Paul Krugman advocated replacing the Dot-com bubble with a government-induced housing bubble. (This remedy Epstein shows later to come from the same lot of snake oil Krugman was selling the year before.)

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble. [Epstein's italics]
That sounded eerily familiar to me. Today, the reason for this dawned on me: It sounds just like a parody I read not too long ago at the Onion.
A panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest.

"What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future," said Thomas Jenkins, CFO of the Boston-area Jenkins Financial Group, a bubble-based investment firm. "We are in a crisis, and that crisis demands an unviable short-term solution."
Paul Krugman's track record isn't just "inconvenient:" It's laughable.

-- CAV


Andrew Dalton said...

Paul Krugman also committed the broken window fallacy in his post-9/11 column.

"First, the driving force behind the economic slowdown has been a plunge in business investment. Now, all of a sudden, we need some new office buildings. As I've already indicated, the destruction isn't big compared with the economy, but rebuilding will generate at least some increase in business spending."

Gee, we need new office buildings! And need creates values automatically, doesn't it?

Nobel Prize or not, any economist who engages in breezy something-for-nothing arguments has no credibility in my mind.

Gus Van Horn said...

Yeah, Yasser Arafat got the Nobel Peace Prize, but who knew that a Nobel Prize winner in economics could also show an appreciation of terrorism on a professional level?

Uttles said...

Have you ever seen "the money hole" video on the Onion? That's their best skit ever, in my opinion.

"My father worked two jobs so he would have money to throw into the money hole, and he never complained!!!"


Gus Van Horn said...

Yes. that's a good one.