More Krugman Fiction

Paul Krugman is #8 on Bernard Goldberg's new book "100 People Who Are Screwing Up America" and yesterday's column on Toyota selecting Ontario as the site for a new car plant is a very good example why.

Many discerning readers will realize quickly that Krugman is genetically unable to tell a straight story but what is disturbing is the legions of NY Times devotees for whom every word in the paper is imperishable prose. Today, a day after, his article is still the second most e-mailed from the site.

Krugman's theme is that Toyota chose Ontario as a site for a new plant because:

1. Americans in the southern states, particularly Alabama, are stupid and make poor employees,

What made Toyota so sensitive to labor quality issues? Maybe we should discount remarks from the president of the Toronto-based Automotive Parts Manufacturers' Association, who claimed that the educational level in the Southern United States was so low that trainers for Japanese plants in Alabama had to use "pictorials" to teach some illiterate workers how to use high-tech equipment.

But there are other reports, some coming from state officials, that confirm his basic point: Japanese auto companies opening plants in the Southern U.S. have been unfavorably surprised by the work force's poor level of training.

2. that Canada with its great national health care system is cheaper for companies and boy isn't national health insurance great!

Funny, isn't it? Pundits tell us that the welfare state is doomed by globalization, that programs like national health insurance have become unsustainable. But Canada's universal health insurance system is handling international competition just fine. It's our own system, which penalizes companies that treat their workers well, that's in trouble.

What Krugman blithely ignores are recent Toyota announcements that new plants are being opened in Texas, Kentucky and West Virginia.

He is also extremely disingenuous about the Canadian health care system which is paid for by high taxes on the entire population. Great 'national' system that doesn't allow a citizen from Quebec to receive emergency care in Ontario - we posted about it here.

Donald Luskin, chief of the Krugman Truth Squad, has comments here.