LGF reader “iowahawk” has been dumpster-diving in back of the New York Times building, and came up with a real find—the discarded first draft for today’s Paul Krugman column, shedding new light on the celebrated Krugman thought process.

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BIG FRIGGIN’ DEAL

By Dr. Professor Dr. Paul Krugman, PhD
NY Times Economic Analyst

The Commerce Department, part and parcel of the Bush junta, and likely populated by Enron criminals, announces very “good” growth during the previous quarter. To many unsophisticated, non-Princeton employed observers, the economy’s troubles are magically over, and there will be kittens and rainbows and beautiful lollipop flavored unicorns and so forth. And the administration’s supporters claim that the economy’s turnaround validates its policies.

That’s what happened 18 months ago, when a preliminary estimate put first-quarter 2002 growth at 5.8 percent. That was later revised down to 5.0, which is an 0.8 percent reverse over a basis of 5.8 percent, which barely covered the weekend line at Harrahs. More important, growth in the next quarter slumped and staggered to 1.3 percent, reeling and spinning and then embarrassingly putting on a lampshade and singing “Put Some Sugar On Me” by Def Leppard before passing out in the guest toilet. We now know that the economy wasn’t really on the mend, and that the Bush plan to revive the totally wasted economy by putting its finger in a warm glass of tax cuts would cause it to pee 600,000 jobs all over the guest bed.

The same story unfolded in the third quarter of 2002, when growth rose to 4 percent, and the economy actually gained 200,000 jobs. But growth slipped back down to 1.4 percent, and job losses resumed. Up and down, up and down.

My purpose is not to denigrate the impressive wild-ass guess of 7.2 percent growth rate for the third quarter of 2003. It is, rather, to stress the obvious: we’ve had our hopes dashed in the past, hoping against hope for a $50,000 no-show consulting gig or maybe an all-expense paid trip to Indonesia, like in the golden era of Clinton’s internet economic Camelot. Rotsa ruck, naive hope-boy.

The weakness of that spurt 18 months ago was obvious to those who bothered to look at it closely and administer strict Olympic doping tests. Half the growth came simply because businesses, having set fire to their inventories in the previous quarter possibly to cover a nasty alimony settlement, were forced to ramp up production by “The Outfit” to keep the whole thing quiet-like, kapeesh?. This time around growth has a much better foundation: final demand — demand excluding changes in inventories less Napster dowloads divided by predepreciation spoilage — actually grew even faster than G.D.P.

But — you knew there would be a but — and you probably also knew there would be a hyphenated clause following the but — but you were probably not expecting the previous hyphenated clause — there are still some reasons to wonder whether the economy has really turned the corner or merely stopped at Stuckeys for a Pecan Log and hillbilly souvenirs.

First, while there was a significant pickup in business investment, the bulk of last quarter’s growth came from a huge surge in consumer spending. This clearly indicates mass insanity, as I have long noted that consumers are best advised to revert to subsistence practices — gathering their own wool, feeding on stray animals and so forth — until the long illegal Bush nightmare ends in 2004. Yet the idiots are wasting money on cars and houses and spitting Kristal like some Eastside Gangsta on MTV Cribs. Christ, you people are nuts.

This can’t go on — in the long run, consumer spending can’t outpace the growth in consumer income. Soon the repo man will put the smackdown on the Bentley and the Virage and the Escalade with the phly-ass Latrell spinner dubs. Your baby’s momma be all over you ass for child support. You be drinkin’ away all that Courvoisier in you Sub Zero. Fitty, he stop returning you cell calls. Your crew drop you like a punk. Then you be all sad ass joke, like MC Hammer, doin’ infomercials and Hollywood Squares and shit.

The big question, of course, is jobs. Despite all that growth in the third quarter, the number of jobs actually fell. And the leading academic phrenologists see little hope for either reduced unemployment claims or a new “special someone” in your life. (By the way, for the last month there’s been a peculiar pattern: each week, people are all happy and excited on Friday, the following Monday their mood has been revised significantly downward, and the apparent optimism decline disappears.)

Still, it’s possible that we really have reached a turning point. If so, does it validate the Bush economic program? Well, no. Duhhhh.

Stimulating the economy in the short run is supposed to be easy. All you need to do is invite the economy out — if it’s reluctant, just say it’s “completely like a platonic friendship thing” — and then drop a few taxcut “Roofies” in the economy’s drink at the PhiDelt Friday smoker. Then drag the economy back to the dorm, put a sock on the doorknob, and wham-bam-thank-you-ma’am. The trick is to do this without incurring debt, and still make it to your 8am section of Macro Econ.

To put it more bluntly: President Bush totally sucks.