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Actually, this is quite an interesting development in the intellectual evolution of Our Most Celebrated Economist, the esteemed Paul Krugman of the New York Times. Since I have written a number of posts based on Mr. Krugman's Scientific inquiries, I thought it was only fitting that I mark this occasion, for it represents a "pivot" (as the big-time journos say) for the wily Mr. K.
What am I talking about? Well, as I have noted before numerous times, Mr. Krugman belongs to the conceptual wing of economics known as New Keynesian, which is a shape-shifting sort of amalgam of...well, complete nonsense, but what these people are all about is "demand." This is what ails the modern American economy: American citizens just are not buying enough stuff, or services, or whatever it is that the modern American economy offers to its increasingly confused citizens. Or "consumers," as they are more relevantly called. Thus, the American economy is "underperforming," it's not using all of its "productive capacity." The American economy is Oskar Schindler lamenting, "I could have done so much more!"
The answer, according to the acolytes of John Maynard Keynes, is for the government to take up the demand "slack" and flood the economy with money until the juggernaut of American production roars back to life. While to the casual observer, this may sound moronic and hopelessly out of date, it is an article of faith in Mr. Krugman's scientific approach, and he dwells in an echo chamber of like-minded liberal thinkers who all say the same thing.
Yet I had noted, in my careful appreciation of the protean and wily Mr. Krugman, that a new strain of thinking had entered his learned discourse, that discourse which he displays with frightening freequency in his columns and blogs (his columns are simply longer, and more boring, versions of the blog posts, which in turn are sort of the rough drafts for the twice-weekly column). To wit, Mr. Krugman became aware, within the last few months, of automation, and of the ways that modern "capital" (Big Business) was using it to maintain a high level of "productivity" and profitability. And that this development might have an awful lot to do, at this point, with the phenomenon of income and wealth inequality.
Well, that's what Science is all about: integrating new discoveries into the old paradigms, as our understanding of the world evolves, forcing us either to modify those paradigms or, on rare occasions, to re-conceptualize Reality itself. Plus, Mr. Krugman needed an escape hatch, because it was becoming apparent that the Old Normal was simply not coming back, and six full years after the economy began its final roll-over, his take on the American economy was beginning to look a little out-of-date, based as it was on things that happened in 1929.
So yesterday we got this from Mr. Krugman:
So what is the answer? If the picture I’ve drawn is at all right, the only way we could have anything resembling a middle-class society — a society in which ordinary citizens have a reasonable assurance of maintaining a decent life as long as they work hard and play by the rules — would be by having a strong social safety net, one that guarantees not just health care but a minimum income, too. And with an ever-rising share of income going to capital rather than labor, that safety net would have to be paid for to an important extent via taxes on profits and/or investment income.I can already hear conservatives shouting about the evils of “redistribution.” But what, exactly, would they propose instead?