Wednesday, October 6, 2010

Krugman's Rail Fantasy

Paul Krugman is on another tear. Those Evil Republicans are not supporting what clearly would be an extremely-costly "high-speed rail" boondoggle, which then makes them against ALL railroads. Here is Krugman in his own words:
Jonathan Cohn points out the curious opposition of Republicans to any improvement in our woefully inadequate rail system. As he suggests, this opposition goes beyond issues of cost; there’s something visceral about it.
Notice that Krugman does not say "passenger rail," just "rail," although I guess he is talking about passenger rail travel.

Furthermore, Krugman tries to invoke a questionable economic argument regarding "natural monopoly," as seen here:
It’s not too hard to understand, of course: in real life, as opposed to bad novels, railroads aren’t run by rugged individualists (nor should they be). In fact, passenger rail is generally run by government; even when it’s partially privatized, as in Britain, it’s done so with heavy state intervention to preserve some semblance of competition in a natural monopoly. So rail doesn’t fit the conservative vision of the way things should be.
Hmmm. We have a government monopoly preserving "some semblance of competition in a natural monopoly"? Uh, that does not compute, people. Furthermore, passenger rail was very, very competitive in this country until the automobile became more developed (and was subsidized by the Interstate Highway System) and also after a century of government regulation of railroads.

Furthermore, government subsidies of passenger rail don't exist to "preserve competition," but rather exist to preserve the various rail unions which have helped make the real costs of passenger rail frightfully high. All that is lost to Krugman, of course, who spins his own fantasies.

But, in the end, it really is about people ponying up so Paul can ride the rails for less than the full cost. He writes:
I almost always take trains both to New York and to Washington, and consider the time spent on those trains part of my productive hours — with notebooks and 3G, an Amtrak quiet car is basically a moving office. And I don’t think I’m alone in that.
Gee, I'm surprised Amtrak does not provide him with a heavily-subsidized private car.

As for "high-speed rail," we are speaking of billions and billions of dollars to be spent for which there really won't be any return. To those who don't subscribe to Keynesian "economics," that means that high-speed rail will use far more in resources than it will produce, which means a deficit of wealth. (Yes, Keynesians will claim it would "stimulate" the entire economy because the government is spending lots of money.)

So, any of you who might take economics seriously, don't ride on the same train with Krugman, as he might declare you an "enemy of the people" have have the conductor throw you off to the side!

12 comments:

bravo said...

Krugman is one song and dance from making this whole thing reality

http://www.youtube.com/watch?v=jF_yLodI1CQ

Ike said...

I am so glad Krugman is eager to take my hard-earned money and sink it into his life-sized model train fantasy. I'm sure it compensates his failure to enjoy HO model trains as a youngster.

However, I wonder how convenient those trains are for the many people who are not being picked up by a limousine driver?

As long as we're engaging in making youthful dreams tangible through taxation, I wonder if Krugman would also lobby for my pet project. I so enjoyed the "Tudor Electric Football" game where the board would vibrate, causing the players to execute plays.

Perhaps we could subsidize a life-sized version, that would allow me to pit the 1976 Pittsburgh Steelers against the 1996 Green Bay Packers.

Think of all the jobs that would be created!

I would consider the time spent with that game among my most productive hours... and I don't think I am alone in that.

Anonymous said...

Mr. Krugman and trains... I took a train from D.C. to Boston this summer. On the way back, right around Baltimore, I looked up and there was Paul Krugman. Well I happened to be reading Murray Rothbard's "America's Great Depression" on the train, and couldn't help but laugh. After I explained to my girlfriend what was so funny, she decided to take the book up to Mr. Krugman and get him to sign it. I don't know if he would have done it under normal circumstances, but my girlfriend is a 10 on anybody's hotness meter, so men rarely tell her no. What was so interesting is that he told her, "your boyfriend shouldn't read this book." Not, "he shouldn't believe everything in this book," or "everything in this book is a lie," but instead "you should not read this book." Who thinks like that??? That you shouldn't read any books that challenge your views, only things that confirm it. And this was coming from a man that is in charge of teaching the future of America at one of our best institutions of learning.

William L. Anderson said...

This is good! I am going to post the comment on the LRC blog! Love it.

Snorkel said...

The Krugman-on-a-train story highlights a glaring shortcoming of e-reader technology.

JFF said...

Anon,

"...you should not read this book.' Who thinks like that???"

Well, even though it's a blatant violation of Godwin's Law, I'll tell you who:

The Nazis, for one.

Silly pastors in Florida, for two.

The Pentagon, for three.

See a pattern?

Anonymous said...

"with notebooks and 3G, an Amtrak quiet car is basically a moving office. And I don’t think I’m alone in that."

So, the logical conclusion to be drawn is that offices should be obsolete and we should subsidize LONGER train rides to increase productivity. Ideally, you'd get on the train at 8 am at your house and off the train at your house at 5 pm, getting all of your work done your own government subsidized moving office!

I think I'm a genius! And I owe it all to Krugman.

Brian said...

@Anon 10:37am,

That anecdote was made in heaven! Thanks for sharing.

Difster said...

I've thought about starting a blog that tears Krugman apart but I just don't have the time. I barely keep up with my own blog these days.

I'm glad you're doing this and I'll be adding it to my RSS feed.

Lord Keynes said...

You say:

But, in the end, it really is about people ponying up so Paul can ride the rails for less than the full cost.

Provision of services for free or inexpensive at the point of delivery through subsidy is a rational choice made after weighing up the cost and benefits, and also through considering moral arguments.

Even Ludwig von Mises agreed with the idea of “reasonable” intervention:

There are certainly cases in which people may consider definite restrictive measures as justified. Regulations concerning fire prevention are restrictive and raise the cost of production. But the curtailment of total output they bring about is the price to be paid for avoidance of greater disaster. The decision about each restrictive measure is to be made on the ground of a meticulous weighing of the costs to be incurred and the prize to be obtained. No reasonable man could possibly question this rule (Mises, 1998 [1949]. Human Action: A Treatise on Economics, Ludwig von Mises Institute, Auburn, Ala, p. 741;

See further:

http://socialdemocracy21stcentury.blogspot.com/2010/10/was-mises-socialist-why-mises-refutes.html


I’ll leave you with Mises' own wise words:

“No reasonable man could possibly question this rule.”

Anonymous said...

As usual, Lord Keynes, you are a f*@#ing idiot and completely miss the point. Exactly what "greater disaster" are we avoiding by subsidizing passenger rail?

Perhaps you should consider this statement from the very same chapter of Mises' Human Action:

This is the crux of the matter. All the subtlety and hair-splitting wasted in the effort to invalidate this fundamental thesis are vain. On the unhampered market there prevails an irresistible tendency to employ every factor of production for the best possible satisfaction [p. 744] of the most urgent needs of the consumers. If the government interferes with this process, it can only impair satisfaction; it can never improve it.

Maybe you should read all of Action before cherry-picking and mis-characterizing individual quotes. No reasonable man could possibly question that rule.

Lord Keynes said...

Exactly what "greater disaster" are we avoiding by subsidizing passenger rail?

Massive pollution from increased car use in urban areas and all the effects on human health it has requiring greater future medical costs? Urban congestion? Traffic jams?

By the way, Mises is perfectly clear that the "avoidance of greater disaster" is ONE factor justifying the fire regulation. There could be plenty of other factors that could justify other interventions:

“Economics neither approves nor disapproves of government measures restricting production and output. It merely considers it its duty to clarify the consequences of such measures. The choice of policies to be adopted devolves upon the people. .... The decision about each restrictive measure is to be made on the ground of a meticulous weighing of the costs to be incurred and the prize to be obtained. No reasonable man could possibly question this rule” (Mises 1998 [1949]: 741;

There are plenty of other "prizes" that one could gained by reasonable intervention.

And, by the way, by using the criterion of "avoidance of greater disaster" you could justify pharmaceutical regulations, food regulation, even welfare and social security.

In contrast to your embarrassing abuse and obscenity, I will say thanks for your comment. I am sure you are a thoughtful and intelligent person. :).