Heaven help us

I just read Paul Krugman's column Jobs, Jobs and Cars. A more misinformed piece of economic writing I have rarely read.

The basic argument of the column is that jobs are not created by entrepreneurs like Steve Jobs, but by actions like President Obama's bailout of the automobile industry.

Krugman writes:

The point is that successful companies — or, at any rate, companies that make a large contribution to a nation’s economy — don’t exist in isolation. Prosperity depends on the synergy between companies, on the cluster, not the individual entrepreneur. But the current Republican worldview has no room for such considerations. From the G.O.P.’s perspective, it’s all about the heroic entrepreneur, the John Galt, I mean Steve Jobs-type “job creator.”

When speaking of "clusters" or "synergy," might Krugman be referring to places like Silicon Valley? But how is it possible to argue that Silicon Valley would exist if it were not for entrepreneurs like Steve Jobs?

Mr Krugman writes:

Apple ... indirectly employ[s] around 700,000 people in its various suppliers. Unfortunately, almost none of those people are in America.

While it is true that most of the people employed by Apple's suppliers live outside the United States, one could also argue, not implausibly, that the entire Silicon Valley personal computer industry was created when Steve Jobs and Steve Wozniak created the first Apple computer, so that the existence of the entire Silicon Valley personal computer industry (along with its many thousands of jobs) is dependent on the actions of these two entrepreneurs. All of the personal computer hardware and software companies that exist in Silicon Valley today, it could be argued, trace their lineage directly or indirectly to the actions of these two men. Now, to argue thus would, of course, be an exaggeration and completely unfair to the many, many other entrepreneurs who have contributed to the personal computer industry. But, the point is that one of the characteristic features of the Silicon Valley personal computer industry, and of the Silicon Valley high-tech industry in general, is that it has been dependent on the efforts of a handful of individual entrepreneurs. These entrepreneurs created the cluster of high-tech industry that is known as Silicon Valley.

But let us ask ourselves an additional question: Where would California be without the Silicon Valley high-tech industry? Silicon Valley high-tech seems to be the only part of the California economy that is booming these days. Furthermore, it is simply not possible to imagine the modern State of California without the tax revenues that pour into the state government from capital gains earned by highly successful entrepreneurs living and working in Silicon Valley.

So, what exactly does Krugman mean when he suggests that President Obama's bailout of the auto industry is preferable to an economy based on "heroic entrepreneurs?" Does he mean that he would like to see the economy of Michigan substituted for the economy of California?

Heaven help us from Krugman's Nostalgianomics!