Right On Target, And Missing The Point: Krugman's 'Defining Prosperity Down'

Paul Krugman, that Lion of The Left, The One's Personal Homeboy, Never Saw A Gubbermint Spending Program Too Lavish--that guy--has contributed a well-written essay to the current debate on OS's favorite subject--the culture that shapes the economy.

And, to lead off, he is exactly on point:

I’m starting to have a sick feeling about prospects for American workers — but not, or not entirely, for the reasons you might think.

Yes, growth is slowing, and the odds are that unemployment will rise, not fall, in the months ahead. That’s bad. But what’s worse is the growing evidence that our governing elite just doesn’t care — that a once-unthinkable level of economic distress is in the process of becoming the new normal.

And I worry that those in power, rather than taking responsibility for job creation, will soon declare that high unemployment is “structural,” a permanent part of the economic landscape — and that by condemning large numbers of Americans to long-term joblessness, they’ll turn that excuse into dismal reality.

He is dead-on, and expresses so well OS has been attempting to verbalize in his halting fashion. (That's why Krugman gets paid well for his words, and OS still writes as a hobby...craft matters.)

OS spent a week on business in Northern Kentucky and Louisville, which are favored places in his world. Heartbreakingly beautiful is the description that comes to mind about the scenery and small towns on the south side of the Ohio River. And yet, there is another sort of hearbreak that overtakes him as he visits: It is evident that these towns were once profoundly prosperous, and have been gutted over time, by one recession after the other, each one playing a cruel game of musical chairs with the souls that inhabit them. The music stops, and another slice of people become the 'structurally unemployed', living in subsidized housing or trailers, shopping at the Walmart and Dollar Tree-type stores with their SNAP cards, because no new businesses arose from the ashes of the ones that died. They raise children who eke by in the public school, and seem adrift. OS had to make a late-night trip to Walmart, and was struck by the number of kids just 'hanging out', at their poor physical and mental condition. Depressing. One town on the route in particular, Carrollton, featured lovely Victorian homes with dismal trailers next door, empty storefronts in a downtown that had once obviously thrived. The connector road to the interstate completed the scene with trailer parks, a closed car dealership, weedy lots, etc. It's like the wind just died in the sails.

Krugman is right. The powers-that-be may have decided this is just the way things will be, with a very prosperous layer shopping-til-they-drop at St. Matthews Mall on Louisville's east end, and a vast semi-underclass huddled together in neighborhoods not too far removed, hanging on for dear life, hoping the music doesn't stop for them as well.

But then, bless him, he proposes that the solution is to have the gubbermint increase the pace of its borrowing and spending, as if much more of the same policy since January '09 will put the economy back up on its feet.

What's needed are businesses. In order to have businesses, entreprenuers are required, willing to risk. If they turn profits by meeting needs, they create wealth, which is distributed to the owners.

Gubbermint can't do that. It's not set up to do that. It can't be in the wealth-creation business. It's in the taxing and making rules business. That doesn't create wealth, and tends to destroy it over the long haul.

Still, Mr. Krugman is well worth the time invested, if for no other reason than to see how the liberal mind functions.