Why Is Nobel Laureate Paul Krugman Talking About an Alien Invasion…Again?

Posted on June 21, 2012 at 12:24am by Erica Ritz
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In August of 2011, Nobel Prize-winning economist Paul Krugman attached himself to a theory that earned him endless mockery from the right.

“If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months,” he declared, arguing in favor of the president’s stimulus package. “And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better [off].”

Now, a little less than 12 months later, the stimulus package has been passed and economic recovery is nowhere in sight. What is Nobel laureate, Princeton professor, and New York Times columnist Paul Krugman’s solution?

Again, prepare for an alien invasion.

Yes, Krugman stands by his “alien” strategy, arguing with Paul Solman: “The great military buildup that began in 1940 as the United States scrambled to get ready for the possibility of getting involved in this war was what brought us to full employment…” but as Solman interrupted: “But we’re not likely to have a credible alien threat any time soon,“ Krugman joked that he probably should have ”broached the thing quietly to some people at NASA“ before ”[giving] the game away.”

Watch the video, below (alien reference begins at 2:18):

Solman asked: “are you suggesting then that there needs to be some collective fiction?”

Krugman responded that there was no need for anything “exotic,“ and we just need to ”restore services at the state and local levels,” without specifying which services have been cut.

After a brief discussion of interest rates and spending, Solman asked: “But isn’t too much debt a bad thing?”

“Yes, of course it is,” Krugman responded. “But by allowing this extremely high unemployment to persist, we are damaging the future.”

And his solution to high debt and unemployment, apparently, is to spend like aliens are invading.

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Comments (90)

DrAwkward
Posted on June 21, 2012 at 6:11am
You would think a Nobel winning economist wouldn’t keep repeating various versions of the Broken Window fallacy. I remember after 9/11 Krugman claimed rebuilding WTC would stimulate the economy. A trained economist really can’t grasp that money spent rebuilding after disasters or fighting wars must first be diverted from productive purposes? Or that “full employment” is pretty easy when there’s a draft, that it’s *productive* jobs that lead high living standards? Or that the “booming” WW2 economic numbers ignore the actual standard of living of Americans living under severe rationing? What is wrong with this guy?
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- JohnLarson
  Posted on June 21, 2012 at 6:29am
  Under your theory the huge levels of spending during WWII would have done the opposite, taking too much money away from the productive and hurt the economy. It did the opposite.
  
  And the great economy we had in the 40s, 50s, and 60s was when our tax rate was the most progressive, taxing the high earners.
  Report Post »
- doomytram
  Posted on June 21, 2012 at 6:47am
  Look Drawkward, Barrack Hussein Oblamer has won a Nobel peace prize, so does that not say what the prize has come to and is?
  
  Paul Krugman is a ******* jack prize salesman. He couldn’t sell Ice to Eskimos….he should be in a straight jacket.
  Report Post »
- lukerw
  Posted on June 21, 2012 at 6:48am
  NOTHING IS WRONG WITH HIM! Money is a Concept… based upon a Perception of Value. So, if everyone agreed… the Word GOLD was Actually GOLD… then people could write GOLD upon any paper and the Debt Problem would be Solved.
  
  If you are on a Desert Island… and start an Economic System using Clam Shells as Money… the Money has Zero Value… just as all Money in Circulation. Yet, Humans STUPIDLY think Money has an Actual, Real, Value!
  
  Humans are Irrational,,, and Crazy, just to varing Degrees!
  Report Post »
- DrAwkward
  Posted on June 21, 2012 at 6:51am
  I am not talking about progressive taxes, that’s way off-topic.
  In the 2000s, Bush stimulated like a drunken sailor and got us into 2 wars.
  Did he not spend enough, or too few wars?
  
  Destroying wealth leads to poverty, not prosperity. I know that’s not “counter-intuitive” or modern enough for Krugman and his ilk, but it is an inescapable fact.
  Report Post »
- doomytram
  Posted on June 21, 2012 at 6:54am
  No I was saying that Paul Krugman is a Carmel flavored Popcorn prize salesman.
  Report Post »
- 123456beatriz
  Posted on June 21, 2012 at 8:11am
  Hey! Krugman Why are you living in EEUU WITH CAPITALIST MONEY? . Why didn’t you move to North Korea? IDIOT! Nobel Prize.
  Report Post »
- D-Fence
  Posted on June 21, 2012 at 8:12am
  JOHNLARSON, FDR did more to stunt growth in the 1930′s more than anything. He didn’t save the economy, the “convenience” of WWII saved our economy by creating a war machine the likes the world has never seen, opening up new markets, building counries from the ground up after we leveled them. In his case, great times made the great man. BTW DRAWKWARD was right, rationing of rubber, food,.. occurred during that time period. The tax rates were higher during the late 40′s, 50‘s and 60’s because the engine was rolling and people didn’t mind as long as they get theirs. The other reason taxes were so high is because of greedy, socialistic stooges like you who want to create some form of utopia instead of adhearing to the constitution.
  Report Post »
- DrAwkward
  Posted on June 21, 2012 at 8:16am
  There is a story (I think true) where Milton Friedman was being taken around a big government construction project in India. He noticed that the hundreds of workers were all using hand shovels. “Why not use your heavy equipment to dig this?” he asked the bureaucrat. “That wouldn’t employ enough people. This is a jobs program” was the answer. Friedman answered “In that case, why not equip them with spoons?”
  Report Post »
- Lloyd Drako
  Posted on June 21, 2012 at 8:43am
  You are all both wrong and right. The New Deal raised taxes, while at the same time never spending enough to provide true Keynesian stimulation. Keynes himself thought FDR was too conservative. Spending was even cut sharply in 1937, sending the economy into a steep nose dive: the “Roosevelt depression,” as Republicans gleefully called it, within the main Great Depression.
  
  After 1940, of course, all restraints on spending were gone: “Don‘t you know there’s a war on?” Full employment in fact resulted in rising living standards even during WWII; it’s notable that boys drafted in 1945 overall taller, heavier and in better health than their older brothers called up in 1941.
  
  At the same time, as Drawkward has pointed out, rationing limited people’s ability to use wartime wages to spend freely, while sales of war bonds resulted in $50 billion worth of savings. After 1945, once rationing and price controls ended, people spent their savings as if there was no tomorrow. Together with the military spending that resumed after 1950, this triggered the postwar boom that lasted with minor interruptions into the 1970s.
  
  Krugman is right here. The debt is a long-term problem, unemployment and a lagging economy are short-term problems. Obama has been reluctant to spend enough; the comparison with pre-Pearl Harbor FDR is all too apt, I’m afraid.
  Report Post »
- lukerw
  Posted on June 21, 2012 at 9:13am
  WARS only seem to fix Economic Problems… because the losers have their SUPPLY System Destroyed… and both sides Kill Off some DEMANDERS as CannonFodder!
  
  FDR/WWII were about Humans being Crazy & supporting Socialist Dictators in every Nation!
  Report Post »
- DrAwkward
  Posted on June 21, 2012 at 9:35am
  Lloyd Drako, An equally probable narrative is the New Deal turned short-term unemployment and a lagging economy into longer term problems than they would have been otherwise. I mean, as long as we’re arguing counter-factuals…
  
  If one is already convinced of the merits of the New Deal, it’s easy to dismiss out of hand any harms from regime uncertainty, crowding out, moral hazard, the general reduction of our economic liberty, etc, etc. Even if you believe those policies shortened the length of the depression by a few years (I don’t) doesn’t mean the policies were wise, or that we wouldn’t be in a better position now if the New Deal never happened.
  Report Post »
- Sue Dohnim
  Posted on June 21, 2012 at 9:37am
  @JOHNLARSON
  
  Clueless drivel..
  
  Prosperity came because the war (spending) ended and the US had its manufacturing intact, unlike the ROW.
  
  The high tax rates were not the real effective tax rate, nobody paid those rates,
  Report Post »
- smokeysmoke
  Posted on June 21, 2012 at 9:55am
  alien invasion= war with middle east…
  Report Post »
- Lloyd Drako
  Posted on June 21, 2012 at 10:44am
  @Drawkward: The best recipe for a really short Depression would have been for Herbert Hoover back in 1929 to have heeded Secretary Mellon’s advice to “liquidate” everything. Instead, Hoover tried to jawbone business into maintaining wages, went along with Smoot-Hawley, boosted spending and then abruptly reversed course by cutting it while raising taxes, provided “bailouts” through the RFC for banks, utilities, etc. By the time the New Deal began, the damage was done–both to the economy and to the political fortunes of the Republican Party. It’s a mistake, though, to think that economic recovery was the sole aim of the New Deal. Relief measures seemed absolutely necessary by 1933, eventually taking the form of “job creation” with WPA, by far the most expensive New Deal program. Reforms long on the progressive agenda, left over from the 1900s-1910s, such as Social Security, found an opening and were duly enacted. Business “recovery” as such was entrusted to the ill-starred NRA, an experiment that came close to justifying charges that the New Deal was “fascist,” but without the secret police and concentration camps. In the end, especially after 1937, FDR resumed, but until the war boom it was never enough to provide full employment or real recovery. It’s probably best to see the New Deal as a muddled holding operation, until something better came along. You might argue that the something was the free market, but that idea was totally discredited by 1933.
  Report Post »
- Ne_FAL
  Posted on June 21, 2012 at 12:04pm
  John Larson the reason that the United States economy boomed in the 40′s, 50′s ,60′s is that the rest of the industrialized world was literally pounded flat during WW2 . Our nation however was not, when we converted war production back over to making consumer goods ours was the only industrial nation with intact infrastructure.
  Since we had intact industry & Gi’s returning home from war motivated to get back to a peace time existence & the rest of the 1st world in a bloody shambles what do you think the economy is gonna do.
  The Marshall plan is what helped keep WW3 from starting by providing tools & food for the rest of the world while they WORKED LIKE HELL to rebuild .
  That is what is commonly know as the German economic miracle & the rebuilding of Japan.
  Having fools in govt. lie about an invasion of little green men from outer space to spend money that belongs to the taxpayers is FRAUD & when folks find out about you would find politicians hanging from tree limbs & street lights & rightly so .
  Report Post »
JohnLarson
Posted on June 21, 2012 at 6:05am
Government spending in WWII officially got us out of the Great Depression. Even right wing economists admit this.

When money sitting in elite’s bank account gets taxed instead and given to the middle and lower class, they immediately spend it, and it goes right back up and gets the economy going at the same time.
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- The Third Archon
  Posted on June 21, 2012 at 6:24am
  Yup–that’s known as marginal propensity to spend and its inverse relation to income (that is, as income increases, marginal propensity to spend decreases).
  Report Post »
- DrAwkward
  Posted on June 21, 2012 at 6:28am
  So if the downturn drags on through 16 years of Keynesian stimulus and wars and then finally
  begins to recover, expect Krugman to jump up and say ‘Tadaaa!! It worked’ and take a bow.
  
  Please, WW2 ending the depression is just another chestnut of common knowledge that happens to be factually incorrect.
  Report Post »
- lukerw
  Posted on June 21, 2012 at 7:02am
  WRONG! The Great Depression did not End until the 1950′s… and the introduction of the CREDIT CARD.
  
  Just check the History of the Stock Market… Total Value per year!
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- hcartexas
  Posted on June 21, 2012 at 8:34am
  Johnarlson…… that statement while true, is only a SMALL part of the complete story that makes it true. You have no idea how economics work. During WW2, these factors also led to recovery, in the short term. Every Other Economy in the world was wrecked.. ours wasnt. The massive borrowing in the 40‘s led to us having to exit the gold standard in the 60’s. Things have consequences. Just because you choose to be Myopic, and expect immediate results and/or consequences doesnt make it so. We will pay eventually for our massive borrowing/printing. In a massive way. No go back to World of Warcraft, and let the adults fix this.
  Report Post »
- Sue Dohnim
  Posted on June 21, 2012 at 9:50am
  @JOHNLARSON
  
  Government spending in WWII officially got us out of the Great Depression. Even right wing economists admit this.
  
  When money sitting in elite’s bank account gets taxed instead and given to the middle and lower class, they immediately spend it, and it goes right back up and gets the economy going at the same time.
  
  ————–
  
  Right wing economists, name 3… ALL Keynesians are SOCIALISTS
  
  Conservative/Libertarian Austrian School economists completely disagree..
  
  The second part of your comment is nonsensical babble…
  
  You socialist nut-bags always get things wrong, Government spending is like a heroin shot. You get a short term high, but the inevitable depression is greater and each time a bigger shot is required leading to a bigger depression.
  
  Government stimulus is not the cure, it is the disease…
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- Bellini
  Posted on June 21, 2012 at 11:13am
  How do you explain the Gilded Age then, an extremely prosperous time for Americans while there was very limited taxation and government spending? The average American was 8 times as rich as his German counterpart, and they were the powerhouse of Europe. Prosperity always being something relative, arguably Americans were richer then than at any time during the 20th century.
  
  When the elite’s money is in the bank, it is being invested and gets the economy going too.
  Report Post »
- GilbertAcct
  Posted on June 21, 2012 at 12:44pm
  Johnlarson. You are completely wrong. In 1946 we had the most growth in US history. What happened prior to this? Government spending was slashed, the troops came home, and the Revenue Act of 1945 slashed taxes (specifically the “excess profits tax” from 90% to 0%).
  
  It is a common misconception that spending on WWII got us out of the depression. The right wing economists who push this lie are the war-hungry Bushites. The left wing economists who push this lie are the government spending addicts. Both are wrong.
  Report Post »
The Third Archon
Posted on June 21, 2012 at 5:53am
“WHY IS NOBEL LAUREATE PAUL KRUGMAN TALKING ABOUT AN ALIEN INVASION…AGAIN?”
Aggregate demand, that’s why.
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- JACKTHETOAD
  Posted on June 21, 2012 at 9:01am
  When they come, go with them. Please.
  Report Post »
- Sue Dohnim
  Posted on June 21, 2012 at 10:01am
  Typical NEOKEYNESIAN dogma,,,
  
  Failure to acknowledge the unseen,, if the Government spends they, tax, borrow or print..
  
  all of these have an impact, they all redistribute wealth very inefficiently..
  
  Anyone who believes that small group of elite economic planners can out think the free market is an delusional ideologue.
  
  The problem is the subversion of the free market by planners, that begets further intervention causing more distortions, malinvestments, bubbles and greater depressions.
  
  Central planning intervention and subversion is the problem,
  Report Post »
GenOptimus
Posted on June 21, 2012 at 4:57am
the way this guy sounds I think he is a space alien in disguise.
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georgepatton
Posted on June 21, 2012 at 4:22am
Krugman: AKA………………………………………. Daffy Duck.
Just goes to show how insignificant a noble peace prize is!
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- johnpaulkuchtajr
  Posted on June 21, 2012 at 4:46am
  Here’s a bit of Nobel Laureate logic for you, Mr. Krugman: If your proposed solution to solve our
  
  economic problems is correct, Greece should be THE most prosperous nation on Earth.
  
  Seems like a simple enough analogy!
  Report Post »
- lukerw
  Posted on June 21, 2012 at 8:04am
  ECONOMICS 101 is a Subject… that no one seems to take any more! He is talking about Economic Concepts!
  Report Post »
nzkiwi
Posted on June 21, 2012 at 3:40am
I understand the point that he is trying to make. He is not expecting aliens to land and take us over. He is saying that a calamity like that, or world war two (that he also alludes to), would prime the economy and send us into an era of prosperity.

I think that he is wrong, however. New Zealand took decades to satisfy its war debts, as it did in most other countries. It was better then than today, though, because there were far less entitlements which would have had to have been funded on top of our other debt. New Zealand’s per capita debt was still low compared with today, and people simply had to get out and work or go under. Married women also, as a rule, left the workforce to care for the newly arrived “baby-boomers.

Similarly, the USA had a comparatively miniscule debt and very low unfunded obligations. In addition, it was, as it is now, an economic powerhouse and one unfettered by skyrocketing debt. Energy prices were very low and production was way up, as she was partly supporting and rehabilitating the defeated countries, which other western countries helped pay for.

His premise is, obviously, quite wrong. Recent wars rather than helping, have pushed western countries closer to the edge. A big brain, it seems, can conceal a tiny mind.

If the aliens actually did arrive, the left would probably just surrender and ask for a loan.
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- Diane TX
  Posted on June 21, 2012 at 4:25am
  I think that most here recognize that he’s not really speaking to outer space aliens invading Earth. The thing is, this so-called “brilliant” Nobel prize winner actually believes that Keynesian economics is a good thing. So does President Obama. President Obama said: “If the stimulus is passed, unemployment will go to or below 8%”. It hasn’t gone to/or below 8%, since he’s been in Office Keynesian economics is a model for fools. That’s because neither persons or government can spend their way out of debt.
  Report Post »
Bruce P.
Posted on June 21, 2012 at 3:34am
For a Nobel prize winner…he sure is a maroon…

Aliens would not need to invade us. There is nothing on this planet that cannot be found elsewhere in the galaxy and in more abundant supply. Nor, if say an alien race did decide to invade, could we hope to prepare for it. If an alien race could make it across the stars to reach us, their technology would be so sufficiently advanced that we would be incapable of fighting them. It would be much like if the United States brought the full force of our military upon the Sentinelese Islanders.
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- Stoic one
  Posted on June 21, 2012 at 4:20am
  actually we have technology that could… take us to the stars. unfortunately this would bankrupt the world.
  
  Assuming world finances were healthy…BUHAHAhaha…………..
  Report Post »
JACKTHETOAD
Posted on June 21, 2012 at 3:17am
I don’t even think the schmuck would be welcome on Polaris…
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Captain Crunch
Posted on June 21, 2012 at 3:15am
This guy is suppose to be SMART?????
I think he has been abducted by the leftist invasion. They must have probed him in a sensitive spot.
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Maxim Crux
Posted on June 21, 2012 at 3:00am
It takes an alien to know an alien. I say deport the bumb…to the Amazon or Sudan.
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lassiegirldawn
Posted on June 21, 2012 at 2:59am
Since the solar industry is in trouble with government money, maybe this is the next study to be funded for The Commie In Chiefs friends, after all, they did do a study with shrimp on a treadmill.
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Truthmonster
Posted on June 21, 2012 at 2:53am
Nobel!??? Give me a break, they should call it what it is. The Liberal Left Wing Nut Award. You can see the crazy in this man’s eyes. Could he be the illegitimate son of Nancy Pelosi and Harry Reid, crazy is as crazy does!
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- lassiegirldawn
  Posted on June 21, 2012 at 3:00am
  I know, did our Commie In Chief get one of those.
  Report Post »
lessoneleg
Posted on June 21, 2012 at 2:53am
I’m pretty sure Mr.Krugman has invested heavily on TinFoil Hats. Being a good studious person that he is. A run on the aluminum market is in order for this Space Alien Invasion to come through. What the hell, You have a massive invasion of foreign latino/hispanic people who have no inclination to apply legally for immigration. So invent an alien invasion of sorts to deflect the real alien invasion.
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HappyInTheMiddle
Posted on June 21, 2012 at 2:42am
Mock him if you will… I think he’s right. If there had been no World War II, and in the forties we just manufactured all those (government-sponsored) ships, ammunition, guns, planes, etc. etc. and just dumped it all in the ocean to rust, we would have recovered from the great depression just as if we had fought a major world war. Keynes was right in the end. The war, strictly from an economic viewpoint, was just a giant government-sponsored Keynesian recovery package. P.K. is saying if we spent even a fraction of that amount of money on the stimulus, we’d be home free. Again, I think he’s right. (I don’t expect many to agree here! lol)
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- RepubliCorp
  Posted on June 21, 2012 at 3:04am
  The kill off of some of the world work force help too. Plus the rebuild of Europe and japan. We need a big goal, like a moon base & go from there.
  Report Post »
- Stew57
  Posted on June 21, 2012 at 8:30am
  You really can’t be that simple minded. I will say it real simple. If I work to produce nothing the standard of living of those that pay me goes down. If the government tries to stimulate the economy by taking money away from people (taxes) to give to someone else for nonproductive work (public sector) someone’s standard of living will go down. During WW2 people sacrificed and had a lower standard of living to achieve a noble goal.
  Report Post »
98ZJUSMC
Posted on June 21, 2012 at 2:32am
Boy. Liberals sure hate that Military spending……

unless they‘re the one’s doing it.
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- HappyInTheMiddle
  Posted on June 21, 2012 at 2:47am
  You disagree with FDR’s military spending during WWII?
  Report Post »
DIR
Posted on June 21, 2012 at 2:27am
Paul thinks he sees little green men, and they be coming for him. The last person that told me they’d seen litle green men, was shortly thereafter declared crazy by a board of experts. Really! Whereas Paul is concerned, I’m sure they are coming for him. Whatsmore Paul, they want to take you away because you are so brilliant they’ll want you to run their planet. Wow, wouldn’t that be nice. It would be nice too if someone would play an elaborate joke on this doofus and ultimately send him off into space. Nobody‘s stupid enough to think Paul’s brilliant, except Paul, the idiots that gave him his Nobel, liberals and maybe the terminally misinformed.
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- HappyInTheMiddle
  Posted on June 21, 2012 at 2:43am
  You DO understand that the “little green men” is an analogy, right? Right?????
  Report Post »
TSUNAMI-22
Posted on June 21, 2012 at 2:26am
The biggest problem with Krugman is that he thinks he’s the star of some weird Twilight Zone episode in which Krugman saves the world through economic science fiction.

He thinks he’s the Isaac Asimov of economics.
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restoretheusa
Posted on June 21, 2012 at 2:25am
just a weirdo with a platform…see a lot of it these days. Look at his face and you can see he is not right.
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rsanchez1
Posted on June 21, 2012 at 2:09am
It’s Krugman and his Keynesian ilk that got us in this mess.
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HiredMind Blog
Posted on June 21, 2012 at 2:04am
That’s liberals for you. Liberals believe that it’s just fine for the government to lie to us.
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TheSoundOf Truth
Posted on June 21, 2012 at 1:47am
Anunaki?
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- Diane TX
  Posted on June 21, 2012 at 2:19am
  I think you mean – Anunnaki. It’s scary that there are real people, today, who believe that the Anunnaki actually existed.
  Report Post »
- Meyvn
  Posted on June 21, 2012 at 7:52am
  They did exist.
  Report Post »
Stoic one
Posted on June 21, 2012 at 1:46am
ah yes the answer from a scientist that receives gov’t funding. I expected nothing less than; ‘the gov’t is the answer!”
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- Stoic one
  Posted on June 21, 2012 at 2:43am
  um…economist.
  Report Post »
Diane TX
Posted on June 21, 2012 at 1:45am
Gee, for a smart guy, he really isn’t that smart. Since the stimulus was a total failure, maybe “this” Paul Krugman is really a pod person. Then again, he’s probably just one of those Commie Progressives.
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rickc34
Posted on June 21, 2012 at 1:42am
Isn’t it obvious this poor man is insane. Time for the rubber room. Poor paraniod person…I really do feel sorry for him.
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marine249
Posted on June 21, 2012 at 1:31am
to ans. your question
because he plain nuts.
because he is nutter the a bay of peanuts.
maybe because is an a$$ho!e also
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- Rightallalong
  Posted on June 21, 2012 at 1:38am
  I can see that winning a Nobel Prize has pretty much lost any meaning … what a stupid piece of trash
  Report Post »
- marine249
  Posted on June 21, 2012 at 1:39am
  boo-boos
  he;s
  than
  he
  Report Post »

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