Krugman writes: "What I'm interested in, instead, are suggestions that the unveiling of the iPhone 5 might provide a significant boost to the U.S. economy, adding measurably to economic growth over the next quarter or two."
Portrait, New York Times columnist Paul Krugman, 06/15/09. (photo: Fred R. Conrad/NYT)
The iPhone Stimulus
14 September 12
Are you, or is someone you know, a gadget freak? If so, you doubtless know that Wednesday was iPhone 5 day, the day Apple unveiled its latest way for people to avoid actually speaking to or even looking at whoever they're with.
So is the new phone as insanely great as Apple says? Hey, I'll leave stuff like that to David Pogue. What I'm interested in, instead, are suggestions that the unveiling of the iPhone 5 might provide a significant boost to the U.S. economy, adding measurably to economic growth over the next quarter or two.
Do you find this plausible? If so, I have news for you: you are, whether you know it or not, a Keynesian - and you have implicitly accepted the case that the government should spend more, not less, in a depressed economy.
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Blocking competition by patent lawsuits/monopo lizing? Common Paul, people are hungry, let them eat iPhones?
The acolytes will no doubt provide the requisite automatic hosanna's for his latest silliness.
Firstly, the good professor errs in thinking that the spending on iphone 5's represents new spending. It doesn't. It represents opportunity cost. The money spent on iphones will simply be money not spent on something else. It is not new money or new spending.
As well, he harbors the notion that JQPublic is sitting on loads of available cash and equivalents, just hot to find "new" products to buy, instead of up to their eyeballs in unemployment statistics, mortgage payments, maxed out credit cards and low paying jobs.
Add to that millions of senior citizens who can't earn a decent return on their CD's or savings due to artificially low interest rates and well, you get the picture. These folks are being forced into riskier investments (found on Wall Street, heh, heh) simply to try to get the 3 or 4% returns they need to survive.
Lest we kid ourselves, it's still all about saving the bankers and Wall Street.
If only the people were as stupid as the government. What's another trillion or so of debt anyway...we owe it to ourselves right?
Krugman is not a shill for Wall St; he's been a critic of the cozy relationship of the banks with government since the beginning of the Bush administration. I cite as proof the fact that he has never been asked to be a White House adviser or cabinet member.
Read Limits to Growth, Read Silent Spring -
Krugman is recycling old cliches/status quo.
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