Paul Krugman actually allows criticism on his blog!

I had heard bad things about Keynesian economist Paul Krugman not allowing comments on his blog that are too critical, but that turned out not to be an issue. In a recent post he argues that the gold standard is obviously flawed because economic recovery during the Great Depression was highly correlated with going off the gold standard. Nevertheless, my usual criticism of this point got approved for others to see. It's this comment, which I'll repost here:

****

I’ve known about this correlation for a while, but I think it’s misleading, regardless of the merits of a gold standard.

Think about it this way: at the time, people expected their money to be convertible at a specific rate into gold. “Going off the gold standard” is therefore a roundabout way of saying “robbing people of their wealth”, because it amounts to expropriation of their gold holdings.

So this correlation (between going off the gold standard and recovery) reduces to the observation that “when times are bad, taking rich people’s stuff and redistributing it can making things look a lot better in the short term” … which isn’t so impressive when you look at it that way.

The real question is, *discounting* for the usual effects of looting the rich, did it make the economy better off than it would have been without such capricious, revolution-like activity?

On the "Felony Stupdity" in the NYC Flyby

Apparently, I'm not the only one stunned by the "felony stupidity"in the decision yesterday to fly an Air Force One standby with fighter jet escorts at low altitute through New York City. To begin with, to fly over the city that actually endured a terrorist attack from low-flying jumbo jets, a few weeks' worth of warning are certainly called for.

And for what? Apparently, because their file photos of ... aircraft, I guess? ... were out of date. Yes, the indignity of having insufficiently new pictures of your aircraft flying near the Statue of Liberty!

I would estimate this whole venture cost the government $500,000 (a coworker with more experience in this kind of thing puts it at $2 million), when you take into account wages of those participating, fuel and security costs, coordination with other agencies, etc. Then you take into account the costs imposed on bystanders (panic, evacuations), which I'll conservatively estimate bring the total cost to $10 million.

With that in mind, do you know what's really outrageous? They could have accomplished the same thing at a sliver of the cost. Here's what they should have done:

1) Set aside $100 instead of $500,000. Plus maybe a few days of wages for government workers.
2) Go to SomethingAwful.com and start a contest for whoever can photoshop the aircraft they want onto the background they want, promising an award of $100 (tax free!) to the winner. Allow them to use the existing stock photographs of the Statue of Liberty area and aircraft (obviously excluding classified photos).
3) Spend a few days sorting through the hundreds of high-quality entries that are indistinguishable from what you'd get through a photo of the real thing.
4) Spend a few more hours removing the "clever" captions SA users added to their entries, like "Your government at work!" and "9/11 looked something like this".
5) Tell President Obama that you just saved the taxpayers $500,000 minus a rounding error, so he can start up another debate in the blogosphere.