When a world class economist makes a comment like this:
But even building bridges to nowhere would create jobs, not destroy them, as the congressman from nowhere knows. To be sure, that is not a valid argument for building them. Dumb public spending deserves to be rejected—but not because it kills jobs.
I am sure he means jobs in a gross sense. Here’s an extra credit opportunity for folks however. What if Mr. Blinder did, indeed, mean that building bridges to nowhere creates jobs on net — as many green jobs advocates in fact claim for their pet projects. What is the meaning of this and what is the relevant economic concept that we all should be thinking about instead of the number of jobs?
Like the unbroken solar panel?
Would the theme song be, ” I’ve Been Workin’ on the Negative Railroad”?
Creative Wealth Destruction?
I read the same article in the journal this morning and it made me very sad. The concept he is forgetting to mention is opportunity cost. You could also make an augument for crowding out, but as Mr. Binder points out, since interest rates haven’t gone up clearly no recourses have been wasted (sarcasm).
My question for you is why do Princeton economist seem to forget every economic concept they learned as an undergrad once they start writing Op’ed. (refering mostly to Krugman and Binder)
I’m a student of your’s just so you know, took your econ 108 class, and decided to be an econ major the next semester.
James, you clearly are a past student of Perfesser Wintercow. You raise some great questions.
One question I noticed was about the future of interest rates. Ben Bernancke debases the dollar, gets applause from Krugman and Blinder, and all of them argue that the market will be indifferent and not demand an inflation premium. This only works if we are going to hell.
Were you ever to take a Blinder course at Princeton (I am sure he does not teach much), you would probably be castrated by the Provost if you called him Mr. Blinder. Doctor Al would be better.
The relevant economic concept is the difference between just adding someone to a payroll and adding someone to your payroll, you being the one who pays the bills. In the first place, if your business fails, you, as supposed to I or someone else, pays the penalty. In perfesser Blinder’s world, it does not matter if somebody spends a few hundred billion of someone else’s dollars to keep California teachers on the payroll for a few more years, or if we have them digging holes and filling them up.
The question is not how often the entrepreneur will make a better business decision than the pipe-smoking professor, however. The question is at what price to our freedom. Even if “creating jobs” for conductors and brakemen on the high-speed negative railroad were a better idea than a thousand ill-conceived free business ventures, it would be a terrible world for me, and I would not want it for my daughter.
I would add that it is the difference between trickle-down/trickle-up demand-side economics and supply-side economics.
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Wintercow, I am puzzled by this last post. Are we spied on in cyberspace for our heretic views? Is wikileaks watching, with their evil amoral eye?
I have a pitchfork and a maul in my garage, but I own no working guns. My cooking knives are sharp. I have a scythe in the barn. Do I need anything more?