The waste of Krugman

KRUGMAN’s latest screed neatly illustrates why he, in his NYT, twice weekly incarnation, is no longer worth reading (except as blog fodder). Reasonable people can disagree about oil exploration in the Arctic National Wildlife Refuge and raising the Corporate Average Fuel Economy standards to 36 mpg (well, I’m not so sure about the latter). Professional economists can say useful things to say about both. But Krugman doesn’t even try to do anything like that. Instead he just attacks the honesty and integrity of his enemies using sound-bite rhetoric that should be flunked out of one of his econ courses.

But then why are the Bush administration and its allies so vehement about ANWR? Pay no attention to rhetoric about national security; the Kerry-McCain proposal [to raise the CAFE standards to 36 mpg] would save about three times as much oil per year as ANWR would deliver even in its brief period of peak production.

At what cost? Econ 101 teaches the apparently non-intuitive (to some people, anyway) idea that it can be perfectly rational to opt for a less valuable option over a more valuable option because the less valuable option is less costly. Common example: hiring two $5/hour unskilled workers over one $15/hr skilled worker because skilled workers are only 2 times more productive, but 3 times more costly, than unskilled workers. There’s nothing wrong with claiming that exploring for oil in the ANWR is worth the cost while the raising the CAFE requirement to 36 mph isn’t, even if the latter offers three times the benefit of the former.

And senators who are indifferent to the air pollution that kills thousands of Americans each year got all weepy at the prospect — rejected by serious analysts — that making cars more efficient would lead to more traffic fatalities.

I don’t know how seriously to take an analyst who claims engineers can’t figure out how to design more crashworthy cars when they have more steel at their disposal. That’s actually another Econ 101 tenet: reducing choices cannot make you better off. The engineers can just choose not to use the extra steel. If the theoretically most crashworthy car possible really did get 36mpg, then people could just make it and buy it now. That they don’t tells you something.

American exceptionalism?

This study (via Instapundit) finds that increased foreign trade in Vietnam led to lower child labor rates. The only surprise in the article was the surprise expressed by the authors, who expected to find higher child labor rates as parents shoved their kids into the sweatshops to bring home more of the trade-induced increased wages. Instead Vietnamese parents are acting pretty much like American parents: they are spending their own additional income on their children. In the US parents buy their children fancier Playstations. At the moment, in Vietnam, they are buying their children childhood.


Back when he wrote about economics, Paul Krugman contributed a magnificent article lambasting the trade liberalization critic’s failure to think through the implications of their policies. (I wish he’d get back to that kind of writing.)