Paul Krugman

Paul Krugman @paulkrugman

Oh boy. The WH really doesn't understand the economics at all. And capital gains tax cuts as tens of millions face economic hardship ... — PolitiTweet.org

Paul Krugman @paulkrugman

Well, https://t.co/nroZjgMnkU has suddenly decided that I don't have a subscription. Technical glitches like this are a bigger deal than usual, because customer support is minimal. — PolitiTweet.org

Paul Krugman @paulkrugman

RT @IvanWerning: When one of your idols does this... makes your month! Actually, our section 4 especially felt to me aspirationally Krugma… — PolitiTweet.org

Paul Krugman @paulkrugman

Here 2/ https://t.co/8kM8aA9DAf https://t.co/Q6LQlok56h — PolitiTweet.org

Paul Krugman @paulkrugman

Actually, that's one of the ways Marcus Licinius Crassus made money in ancient Rome! 1/ https://t.co/Qzl4wSq7tQ — PolitiTweet.org

Paul Krugman @paulkrugman

And now trying to rewrite that history and claim that it never happened — PolitiTweet.org

Paul Krugman @paulkrugman

pdf version of this argument 16/ https://t.co/lZwrs2FCbw — PolitiTweet.org

Paul Krugman @paulkrugman

Maybe rules against price-gouging hurt economic efficiency in the sense that they reduce the sum of consumer and producer surplus. But economics is about people; and human welfare sometimes requires looking beyond dollars and cents. 15/ — PolitiTweet.org

Paul Krugman @paulkrugman

So even if you believe that the best system for normal times is to let markets rip and soften the impact of inequality with taxes and transfers, it makes sense to temporarily move to price controls and rationing in the face of disaster. 14/ — PolitiTweet.org

Paul Krugman @paulkrugman

The answer, it seems clear, is that you’d choose rules of the game in which profiteering and price-gouging in the aftermath of disaster are prohibited. You really don’t want a society in which low income means death in times of disaster. 13/ — PolitiTweet.org

Paul Krugman @paulkrugman

Compare this with a regime in which disasters are followed by temporary price controls and rationing of essentials based on need. If you had to decide between these regimes ex ante, behind the veil of ignorance, which would you choose? 12/ — PolitiTweet.org

Paul Krugman @paulkrugman

Answer: if disasters are followed by a free-for-all, with very high prices for essentials, the stakes of inequality become much higher. Those who can’t afford high prices face extreme privation, even death, while those with sufficient wealth face no more than inconvenience. 11/ — PolitiTweet.org

Paul Krugman @paulkrugman

Suppose, however, that we already have progressive taxes and a safety net — that we have, in effect, made our choice about how much inequality to have — and then disaster strikes. How does this change things? 10/ — PolitiTweet.org

Paul Krugman @paulkrugman

paid for with progressive taxes, because the assurance that you will be able to afford essentials if you end up poor matters much more than how much luxury you’ll be able to afford if you end up rich. 9/ — PolitiTweet.org

Paul Krugman @paulkrugman

If you assume that we’re going to need to rely on a market economy, a Rawlsian approach doesn’t prescribe complete equality: in reality, people do know who they are, and must be given incentives to produce. But it does say that you want a strong safety net 8/ — PolitiTweet.org

Paul Krugman @paulkrugman

The classic argument here is that of Rawls, who argued that we should evaluate social arrangements by imagining ourselves having to choose institutions and policy behind a “veil of ignorance”: what society would you prefer if you didn’t know who you would be? 7/ — PolitiTweet.org

Paul Krugman @paulkrugman

The piece linked above makes the case in terms of the morality of the seller’s actions: is it right to take advantage of peoples’ distress? Without disagreeing that this is a relevant question, I find it helpful to think in terms of distributive justice. 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

There seem to have been very few attempts to think through why, exactly, most people feel that price-gouging is bad; this is one of the few examples I’ve been able to find. https://t.co/yLiSUbFvED But I’d argue that the public is right and many (most?) economists are wrong.5/ — PolitiTweet.org

Paul Krugman @paulkrugman

To the extent that economists have thought about it, however, they tend to argue that we should let markets work, that putting a lid on price increases is counterproductive. 4/ https://t.co/Y4oHpjKG2h — PolitiTweet.org

Paul Krugman @paulkrugman

But is price-gouging in the wake of a disaster bad? Most people instinctively feel that it is — that those who happen to be in possession of crucial supplies in a time of extreme shortages shouldn’t be allowed to make a killing by selling those supplies at very high prices. 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

Crucially, the Trump administration’s refusal to make serious use of the Defense Production Act has left states competing with each other for critical medical supplies, from ventilators to personal protective equipment, leading to soaring prices. 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Covid-19 has led to a number of shortages. It has also, as a consequence, produced an epidemic of price-gouging. 1/ https://t.co/PojY18MoRu — PolitiTweet.org

Paul Krugman @paulkrugman

Werning has a very good thread explaining what's going on in their work 7/ https://t.co/gbtEAQAwMu — PolitiTweet.org

Paul Krugman @paulkrugman

And actually more than self-indulgence involved. People who rely on rote repetition of slogans based on different situations — like those still worried about disincentives for work — are completely lost now. In times like these, only the creative survive (intellectually) 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

A self-indulgent note: Although our situation is horrible, intellectually I love the kind of thing they're doing: using the tools of economics to make sense of an unprecedented situation. 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

One thing they don't mention, but I think is very serious, is the fiscal impact on state and local governments, which face balanced-budget requirements and will be forced into destructive austerity, delaying recovery, unless they get federal aid 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

They suggest that there may be lasting negative effects, even as the pandemic fades, because of balance-sheet damage; they suggest, going beyond where I was, that there may be adverse effects on the economy's potential 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

My informal discussion here. We have a direct hit to "contact-intensive" sectors, and a second-round Keynesian demand-side hit to the rest of the economy 2/ https://t.co/Xdm1Rspnoh — PolitiTweet.org

Paul Krugman @paulkrugman

This paper by Guerrieri et al is impressively fast work, similar in spirit to what I've been thinking but going much further while also crossing the eyes and dotting the teas 1/ https://t.co/LZaOSnFmsR https://t.co/0IuafBtimT — PolitiTweet.org

Paul Krugman @paulkrugman

RT @MikeGrunwald: My wife spent the morning trying to apply for the small business thing and ohhhhh this is gonna be a cluster. — PolitiTweet.org