Now, Bob is fair to Krugman in that he does not say that Krugman wants war, alien invasions, or even the entire East Coast to be devastated by earthquakes and storms. Nonetheless, Murphy writes:
As I said earlier, the Keynesians lately have been launching a counterattack on the charge that they are committing the broken-window fallacy. One of their responses is to claim that the conservative/libertarian critics are ignoring the distinction between wealth and employment, and that they are unwittingly assuming that there is full employment (i.e., that there are no "idle resources").Bob's answer is instructive, and I also believe that Keynesians cannot refute it, at least honestly.
Sympathetic onlookers have jumped into the debate, claiming that Bastiat could have been wrong. After all, suppose a hurricane came along and struck a community that initially had a large number of unemployed construction workers. Who would deny that the hurricane might (under the right circumstances) actually lead to more employment and a higher "gross domestic product" as it is currently measured?
On another note, Krugman's Princeton colleague Alan B. Krueger has been named the chairman of President Obama's economic advisers. I have commentary here.