Is UPS Just as Bad as

Is UPS Just as Bad as
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krugmanPaul Krugman is no stranger to silly statements that come back to haunt him, but it has been particularly amusing to watch him twist and turn with the debacles of, the website devoted to “ObamaCare.” Krugman’s latest analogy is nothing short of hilarious, but first let’s review the backstory.

Back when the website launched on October 1, Krugman actually titled his blog post, “Good Glitches” and wrote:

So, very early reports are that Obamacare exchanges are, as expected, having some technical glitches on the first day — maybe even a bit worse than expected, because it appears that volume has been much bigger than predicted.

Here’s what you need to know: this is good, not bad, news for the program…

The big fear has been that a combination of ignorance and misinformation would keep people away, that they wouldn’t sign up either because they didn’t know that insurance was now available, or because Republicans had convinced them that the program was the spawn of the devil, or something. Lots of people logging on and signing up on the very first day — a day when the Kamikaze Kongress is dominating the headlines — is an early indication that it’s going to be fine, that plenty of people will sign up for the first year of health reform.

Yes, there may be some negative news stories about the glitches. But Obamacare is not up for a revote. As Jonathan Bernstein says, the only thing that matters is whether it works. And today’s heavy volume is yet another sign — along with abating health costs and below-expected premiums — that it will. [Bold added.]

Clearly Krugman in the above quotation was just parroting the official Administration position; his statements “[l]ots of people logging on and signing up on the very first day” was patently false. Krugman merely repeated a lie that the Administration had given, or (perhaps worse) simply invented a “fact” to keep his readers enthused about ObamaCare.

As the weeks droned on, Krugman had to incrementally walk back his optimism, but nonetheless assuring his readers that’s “good glitches” would be fixed. Finally, even Krugman had to throw in the towel when he declared on November 20: “But the future of the reform depends not on policy per se but on whether the IT issues can be fixed well enough soon enough, a subject on which I have zero expertise.”

In this context, you can understand why Krugman is now grasping at straws to try to steal this issue away from the people who oppose ObamaCare. In an audacious post that is shocking even by Krugmanian standards, our Nobel (Memorial) laureate wrote a post on December 27 titled “The Big Screwup” that contained the following (alleged) gotcha of the ObamaCare haters:

You know how it went. They made big promises: just go to the website, provide the information, and all will be well. What actually happened was nothing like that. It’s true that many, perhaps most people did in the end manage to get what they sought; but millions found themselves frustrated and angry. Was it a disaster? That depends on which anecdotes you choose to emphasize. Will it have long-run consequences? Too soon to tell.

Yes, the great online-shopping screwup of 2013 was an object lesson. Oh, wait — did you think I was talking about

So, in case you didn’t know, online shopping had a number of glitches this holiday season, with Amazon, for example, failing to make good on many supposedly guaranteed delivery dates — and as a result, quite a few Christmas presents weren’t there when the reindeer took off. The biggest bottleneck seems to have been UPS, which just didn’t provide enough capacity, but it wasn’t the only one. Can’t the private sector do anything right?

…[M]any pundits were quick to declare’s problems evidence of the fundamental, irretrievable incompetence of government, and as an omen of Obamacare’s inevitable collapse. Strange to say, none of these people are making similar claims about UPS or Amazon.

I wonder why. [Bold added.]

Since Krugman asked so nicely, I’ll explain to him why the UPS/Amazon debacle is not remotely analogous to

(1) People were able to log in and place their orders with Amazon. The complaint is that some of the packages showed up later than promised. In contrast, people couldn’t even sign in to So let’s wait to see if, say, a promised MRI is only a day or two late; that would be the analog to what happened with UPS/Amazon.

(2) I imagine there are some more egregious individual cases, but judging from the news stories it appears that some packages were promised (or “guaranteed”) delivery before Christmas, and yet they didn’t show up until a day or two after. Yes, that is annoying, but it’s not in the same ZIP code as taking literally months before Krugman felt comfortable enough coming back to defend it. (And to repeat the first point–nobody had trouble placing orders on Amazon. So comparing the delay in final completion with UPS, versus the delay in just being able to sign up with ObamaCare, is already being generous.)

(3) According to the Washington Post, Amazon and UPS are offering refunds and $20 gift cards to customers whose packages were not delivered in time. That’s what happens when private-sector companies screw up; they try to make things right with their customers because they have to. In contrast, even though I got a letter from my insurance company saying I was going to lose my plan, I don’t think the Obama Administration is sending me any compensation for Obama’s repeated lies that this would not happen.

(4) Krugman wonders why people draw the lesson that the U.S. federal government isn’t good at running at business from the failure of, when we have this evidence of how UPS performed. Well OK, if we want a closer apples-to-apples comparison, we can compare the US Postal Service with private shippers such as UPS and FedEx. Would even Krugman be so silly as to argue that the former was just as efficient as the latter? That would blow up in his face like the time he thought Canadians would publicly endorse their healthcare system. (A note for purists: The US Postal Service has generally not relied on taxpayer funds since the 1980s, though it is an official arm of the federal government and it enjoys a monopoly on first-class letter delivery.)

(5) Finally, the most important difference between ObamaCare and UPS/Amazon: If I don’t want to patronize the latter, nobody is forcing me to. Indeed, I personally don’t use online retailers for Christmas shopping, for precisely this reason; I procrastinate to the last day or two, at which point I have no choice but to buy gifts in person. After burning some of their customers this year, UPS/Amazon may lose business next year. Either way, you can be sure they will hire extra staff and be much more careful about offering their “guarantee” next season. This isn’t because UPS or Amazon employees are inherently nice people, but because they face the market test and have to constantly earn their customer loyalty.

In contrast, I’m losing my particular (catastrophic) health insurance plan because the US government has rendered it illegal, and there are millions of young, healthy Americans who are going to be forced to buy health insurance that they don’t want.

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  • Bob Roddis

    Interesting. I'll bet before this latest article, everyone thought that Krugman had a firm grasp of basic Austrian concepts such as the pricing process, prices as information and economic calculation and how the market is necessarily different from government bureaucracy.


    With him being a Nobel Prize winning economist and all.

    • Syed Munir

      How does Krugman's winning the Nobel Prize automatically make him a student of Austrian economics?

      • Patrick Szar

        You don't have to be a student of it, to learn some of it. But you at least SHOULD be learned in it before criticizing it in the arrogant, holier-than-though, pedantic manner Krugman does. To take the most logically coherent approach currently in public discussion and relegate it to the waste-bin of history like he usually does is disgraceful for someone with a Ph.D and a Nobel Prize…in anything.

Profile photo of Robert P. Murphy

Robert P. Murphy is the Senior Economist at the Institute for Energy Research, and a Senior Fellow with the Fraser Institute. He holds a PhD in economics from New York University. Murphy is the author of Choice: Cooperation, Enterprise, and Human Action (Independent Institute, 2015) as well as numerous other books and hundreds of articles.

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