PAUL KRUGMAN: ‘RIDICULOUS’ TO TALK ABOUT ‘TINY, TINY MISSTEPS’ LIKE SOLYNDRA
June 3, 2012
by Erica Ritz
New York Times columnist Paul Krugman appeared as a guest on ABC’s This Week Sunday where he said, among other things, that Rep. Paul Ryan’s budget plan is a “fraud,” Scott Walker is trying to redistribute income upwards through tax cuts, and that it’s “terribly unfair” to hold Obama responsible for the shameful state of the United States economy.
If that’s not enough, the columnist remarked of Solyndra: “We’re talking as if a billion dollars was a lot of money…,” particularly in comparison to the size of the U.S. debt and the economy. While this is true, the economist seemingly lacks any awareness that it is precisely this mindset thatleads to a $15 trillion dollar debt.
Watch Krugman discuss how “ridiculous” it is to discuss “tiny, tiny missteps” like Solyndra, below:
Trouble viewing video? Click HERE.
This is not the first time Krugman has come under fire for confusing the failure of public and private funds.
Last August, Forbes contributor Warren Meyer summarized:
I suppose it should not surprise me that a prominent voice on the left does not recognize a distinction between private equity money invested voluntarily and public investments of taxpayer money. So, to help Dr. Krugman out, let me suggest several important differences.
The most important distinction is that [private failures like] Pets.com did not take my money. Solyndra did, and without my permission, too. When Solyndra flushed over a half billion dollars down the toilet, some of that wealth destroyed was mine. [Emphasis added]
He continues, following Krugman’s theme that there is no real difference between public and private capital failures:
By the way, if it were the job of the President to be such a venture-capitalist-in-chief, would you have chosen Barack Obama for this position? Would he even be in your top, say, 20 million choices? If I gave you a choice of Barack Obama or a random person snatched off the street of lower Manhattan, who would you choose to make these investment choices?
Krugman’s argument falls into a general category of [leftist] defenses of big government that I would summarize as “private actors make mistakes too.” This is one of the great straw men of anti-capitalist writers. No reasonable defender of capitalism would ever dispute that there are private enterprises that become senescent and unresponsive, that burn through hundreds of millions of dollars pursuing losing business plans, or that treat customers in arbitrary ways not much better than does the DMV.
The difference is that, absent government bailouts and crony protections of favored businesses, private markets exercise a discipline and accountability that eventually shift market share, revenues, profits, and capital to better enterprises. These corrective mechanisms are almost entirely absent in the political realm. Circuit City goes away, but the DMV lasts forever. [Emphasis added]
(H/T: Weasel Zippers)