The Krugman Who Cried Stimulus
So the big topic on the Interwebs this morning is the quote that came from what seemed to be Paul Krugman's Google + page, and was subsequently removed, that had him saying:
"People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage?"
Krugman has since denied that's his page. Here's the screenshot (it's on Facebook, so you may not be able to get it) if you're interested. Several observations:
1. As Roger Koppl pointed out on Facebook, Krugman only denies having said it, he doesn't deny that he agrees with that statement.
2. As several others have pointed out on Facebok (Lynne Kielsing and Will Luther especially), the problem with the "disasters are good for the economy" nonsense, and GDP more generally, is that it confuses a flow with a stock. GDP measures a flow of activity, not a stock of wealth. Destroying things and then rebuilding them might increase economic activity in the area affected (by drawing resources from elsewhere), but leaves us with less wealth than we would have had without the disaster. That is the real meaning of the Broken Window Fallacy. Interested readers might also see Bob Murphy's blog post on this topic.
3. Finally, even if Krugman didn't say it, when he has, in fact, said things like the 9/11 attacks will be good for the economy and that the threat of an alien invasion is just what we need for a stimulus, and he's said them in his NYT column and on TV so we know they are really him, it's totally believable that he would have said what was attributed to him. Like the boy who cried wolf, but in reverse, we're going to believe it was him even when he didn't say it.
So even if Krugman didn't say it, the fact that it's so easy to believe he did, given his earlier verified statements, just points out how much of a caricature he's become. And that's unfortunate because his real work as an economist could be really good at times (e.g., Pop Internationalism among others). But when your legacy is thinking that the mere threat of a space alien invasion is good for the economy, it's hard to feel to sympathetic when you're misquoted saying what amounts to the same thing just in a different context.