Monday, July 4, 2011

Krugman identifies demand as the problem and recommends a JG of sorts

New York Times: Corporate Cash Con
So here’s what you should answer to anyone defending big giveaways to corporations: Lack of corporate cash is not the problem facing America. Big business already has the money it needs to expand; what it lacks is a reason to expand with consumers still on the ropes and the government slashing spending.

What our economy needs is direct job creation by the government and mortgage-debt relief for stressed consumers. What it very much does not need is a transfer of billions of dollars to corporations that have no intention of hiring anyone except more lobbyists.
[emphasis added]


Detroit Dan said...

I heard Krugman on the radio yesterday and he sounded all the right notes...

Ralph Musgrave said...

To parody Karl Marx, the internal contradictions of JG are as bad as the internal contradictions of capitalism. In particular, if JG involves little capital equipment and permanent skilled labour it will very inefficient. But if it involves decent quantities of the latter factors of production, it becomes near indistinguishable from a normal or regular employer.