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Don Boudreaux on the Krugman Brand Proposition

January 29th, 2012 · No Comments · Economics

KrugmanI’ve had this queued up for some time, but Krugman’s recent assertions (and subsequent backpedaling) about capital gains taxation inspired me to take this live.

This is perfect. As Boudreaux tackles the question “Who is today’s Bastiat?” as proposed by David Henderson, he puts forth the best description I’ve heard yet of what Paul Krugman does, and why he has such a large audience who read and echo his writings:

“Krugman spends the bulk of his time today, when writing for the general public, assuring the general public that its economically untutored instincts are correct.”

This sentence also encapsulates why he is so often caught contradicting himself — the usual case is that his academic writings (which focus on “real” economics) collide with his populist Conscience of a Liberal columns.

More from Boudreaux:

“The general public, for example, naturally “sees” the beneficial effects of more government spending. While Bastiat specialized in showing the general public that what it sees is only part of the picture, Krugman – vocal advocate of “stimulus” spending that he famously is – specializes in assuring the general public that the part of the picture that it naturally sees is, in fact, the full (or at least the most important part) of the picture.

Another example: The general public naturally “sees” that a low-priced Chinese renminbi makes Chinese goods more attractive to American consumers and, hence, reduces the demand for some American-made outputs. Bastiat would have pointed out the unseen – the fact that many of these low-priced Chinese goods, used as inputs in America, allow some American producers to profitably expand their output; the fact that monies American consumers save because of lower-priced Chinese goods can be spent buying other goods and services, some of which are ‘made in America,’ that would otherwise be out of reach; the fact that that if Beijing truly is keeping the value of the renminbi too low the result will be inflation in China – which will eventually raise the prices Americans must pay for imports from China; and, most importantly, the fact that there’s very little difference from the perspective of Americans in China’s government subsidizing our consumption of Chinese-made goods and some natural source (say, a technological breakthrough) that lowers our cost of buying Chinese-made goods.”

A good definition of brand proposition here.

“A brand proposition is a succinct expression of what your brand promises. This is an important anchoring point for brand awareness. The brand proposition should include target audience, the benefits of working with the brand and the criteria for attaining it. The aim is to clarify what the brand is offering, to whom, in what format – and how to attain it.”


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