Disdain for Economics

I find it quite interesting that Paul Krugman has decided to recast himself as a populist, as though he is part of the "rest of us." (Anyone who has attended conferences and seen Krugman interacting with others can say quite assuredly that the guy hardly fits into the category of the "common man," especially since he is a multi-millionaire and an academic.)

As usual, in his latest column, he pretends to be Paul Krugman The Populist and excoriate Mitt Romney for his recent remarks at the Boca Raton fundraiser. What I find interesting, however, is that Krugman reverts to stereotypes, which hardly is what academics are supposed to do. Moreover, in other columns, he has claimed that inflation actually benefits the poor and middle class over the rich, which simply is not true.

Furthermore, instead of providing insight, Krugman provides Keynesian stereotypes. I find it interesting that Tim Carney, who hardly is a celebrated economist, gives much more insight into the whole Romney affair than Krugman ever could. Carney writes:

By tagging 47 percent of America as irresponsible, Obama-supporting government dependents, Romney showed again that his politics are grounded in false liberal premises.

Romney's statement at a closed-door fundraiser reflected the mistaken liberal view that the growth of government mostly redistributes wealth downward -- it doesn't. He also implicitly bought into the Left's narrow view that both tax cuts and welfare programs mostly benefit the immediate recipients. Finally, Romney conflated tax cuts with government aid, reflecting the perverse mindset that all wealth originally belongs to the state.

He then lays it out quite nicely:

Romney was correct that a portion of America backs President Obama because they "are dependent upon government" and "believe that they are entitled." We even know these dependents' names: Duke Energy CEO Jim Rogers, General Electric boss Jeff Immelt, Pfizer lobbying chief Sally Sussman, Solyndra investor George Kaiser and millionaire lobbyist Tony Podesta, to list a few.

In the last few years of bailouts, stimulus, Obamacare and government expansion in general, we have seen median income fall and corporate profits soar. Industries are consolidating as the big get bigger while the little guys shut down.

But it gets better:

When government controls more money, those with the best lobbyists pocket most of it. The five largest banks hold a share of U.S. assets 30 percent larger today than in 2006. Also, as Obama has expanded export subsidies, 75 percent of the Export-Import Bank's loan-guarantee dollars in the past three years have subsidized Boeing sales.

Romney, however, wasn't talking about corporate welfare queens. He was talking about the 47 percent of the population that pays no federal income tax.

Think about Romney's perverse logic here: He disparaged people as "dependent" for not owing income taxes. Many of these people are retired and living off the life savings they earned. A family of four earning $40,000 could owe zero federal income tax even without tax credits.

Keeping your own money isn't being "dependent on government." Sure, Obama speaks as if it were, lambasting the GOP for "giving" tax cuts to the wrong people. But Republicans are supposed to distinguish between government giving you something and government leaving you alone.

The real issue is not disdain for workers but rather disdain for investment and for economic growth. Romney certainly does not get it and neither does Krugman. (Nor does Obama, but we already knew that.) When I read Romney's quotes, all I can do is to shake my head, and when I read Krugman's quotes, I am reminded once again that he is a political operative, not an economist.