The Paul Krugman Test

"My attitude is this: if you are getting attacked by Krugman, you must be doing something right. "

That is one of very interesting lines from this excellent interview with Chicago's Gene Fama.

Hong Kong in Japan's Footsteps

Our Chief Executive (CE) hopeful (and incumbent CE) Donald Tsang was quoted as saying:

"Chief Executive Donald Tsang Yam-kuen yesterday pledged to increase infrastructure spending to create job opportunities... He said that each year the government set aside about HK$29 billion for infrastructure, but might only spend "$25 billion, $24 billion, $23 billion"...He said the government should return infrastructure spending "to the right level" and he hoped to create a development bureau to oversee the execution of infrastructure projects. "

Read the story here.

But why stop there? If government spending is such a miraculous tool to create jobs, why fix the cap on such spending at HK $ 29 billion? Why not raise that "right level" to HK $ 59, $ 69 and $ 79 billion so that more jobs could be created?

By the way, WHAT is the "right level" and WHO is to decide what is the "right level" anyway?