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Paul Krugman: got a problem, pass a law!

Economist David Henderson articulates one of my frustrations with Paul Krugman:

Paul Krugman seems never to take account of the findings of public choice. Even a basic understanding of public choice would make him question his views about how effective government can be in achieving good things. This comes across clearly to those who, as I do, read over 30 percent of his columns in the New York Times. He seems to believe that if one can conceive of a government solution to a problem, then all that has to happen is that the legislative bodies pass a law to spend money on the problem and the problem will be fixed.

Read the whole post here.  Henderson is the editor or the Concise Encyclopedia of Economics, available on-line here.

Speaking of public choice, here’s a succinct summary from a Medicare reform report:

Like for-profit firms, politicians must compete to survive. But the nature of that competition forces them to weigh political costs against political benefits – where “costs” and “benefits” are measured in terms of impact on the next election. Private firms competing in a marketplace, by contrast, must compare economic costs with economic benefits.

For more, see here.

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