No matter what the illness, Paul Krugman has the cure — more federal coercion! To stop rising unemployment, the obvious answer is for the government to adopt rules against firing workers.
Don Boudreaux (a real economist and not a party hack) comments on Krugman’s latest baloney in this letter:
Editor, The New York Times
620 Eighth Avenue
New York, NY 10018
To the Editor:
To combat unemployment, Paul Krugman supports “labor rules that discourage firing” (“Free to Lose,” Nov. 13). If a student in my Principles of Economics course ever wrote such a thing on an exam, he or she would earn an F.
But no student in my class would ever write such nonsense. My students learn from day one to distinguish intentions from results. So my students understand that the intention of such labor rules might be to decrease unemployment, but that the result will be to increase it – because my students also understand that labor rules that discourage firing raise employers’ costs of hiring workers to begin with. Firms will think twice – thrice! – before hiring employees who, once on the job, are difficult to fire.
If the goal is to increase employment, raising firms’ costs of hiring unemployed workers is emphatically counterproductive.
Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
