Sunday, May 9, 2010

Krugman: More Unemeployment is a "Good" Jobs Report

The latest issue of Econ Journal Watch has an article by Brett Barkley on how economists change their interpretation of economic events when a person of their own party takes over the White House. Barkley looked at 17 economists, and while 11 were consistent, and five changed their outlooks somewhat, on economist changed his viewpoints in a significant way: Paul Krugman.

Somehow, I am not surprised, as Krugman has been a loud partisan voice instead of a voice of reason. His commentary on the latest jobs report from the government provides another example of partisanship. He writes:
An actually good employment report. A reminder: there are two separate surveys, one of employers — which is where the 290,000 jobs number comes from — and one of households, which is where the 9.9 percent unemployment rate comes from. Sampling error, seasonal adjustments, and other technical factors can make these reports give contradictory indications.
Unfortunately, as he later adds, the economy won't be adding jobs as quickly as it did during the Clinton years. However, he fails to put two and two together.

In the past few years, the federal government has gone on a spending spree, starting with the unwise bailouts and Federal Reserve System initiatives when it became clear the economy was moving into crisis mode. We have high unemployment not (as Krugman says) because the "stimulus" was not "bold enough," but rather because the government continues to print money in order to prop up weak sectors.

If Krugman wonders why we are looking at high unemployment for the next generation, he might want to look in a mirror, for the high-deficit policies of borrowing and spending have been disastrous.

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