Krugman – why many of my peers are idiots

Especially in lambasting the discredited, absolutist Chicago School (which largely still refuses to accept its self-immolation), Paul Krugman has a great in-depth explainer on just how wrong supply-side economics is.

Not just wrong, but WILLFULLY wrong, perversely, sickeningly wrong:

Chicago’s Casey Mulligan suggests that unemployment is so high because many workers are choosing not to take jobs: “Employees face financial incentives that encourage them not to work . . . decreased employment is explained more by reductions in the supply of labor (the willingness of people to work) and less by the demand for labor (the number of workers that employers need to hire).” Mulligan has suggested, in particular, that workers are choosing to remain unemployed because that improves their odds of receiving mortgage relief. And Cochrane declares that high unemployment is actually good: “We should have a recession. People who spend their lives pounding nails in Nevada need something else to do.”

Yep, my newspaper company closed two months ago because we all wanted to take time off for nothing, wanted government handouts, and wanted to do something different.

This isn’t even “voodoo economics.”

Rather, it’s “voodoo political science,” or “voodoo sociology,” disguised as “voodoo economics.”

That said, Krugman hasn’t read the Iranian philosopher Idries Shah, with his famous observation about there never being just two sides to an issue.

The third side here, beyond (neo)-Keynesianism and neo-classicism, is behavioral economics, which actually has a foothold at Chicago, of all places. Krugman does mention behavioral economics on the last page of the story, but only to try to subsume it into a Keynesian world.

Rather, behavioral economics trumps BOTH the other sides by being scientific in a way neither of them are, mainly through gathering scientific, empirical data through sociological research, on the one hand, and incorporating the findings of cognitive science and neuroscience, on the other.
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