Paul Krugman in the New York Times: An Alternate Reality


blockquote> From an economist’s point of view, the most revealing indicator of what’s really happening is the post- Sept. 11 fondness of politicians for “lump-sum transfers.” That’s economese for payments that aren’t contingent on the recipient’s actions, and which therefore give no incentive for changed behavior. That’s good if the transfer is meant to help someone in need, without reducing his motivation to work. It’s bad if the alleged purpose of the transfer is to get the recipient to do something useful, like invest or hire more workers.

So it tells you something when Congress votes $15 billion in aid and loan guarantees for airline companies but not a penny for laid-off airline workers. It tells you even more when the House passes a “stimulus” bill that contains almost nothing for the unemployed but includes $25 billion in retroactive corporate tax cuts