How can any economist – even Krugman – advocate job subsidies and work sharing?  Krugman’s answer is that it’s a “third-best” solution.  His top three:

1. Sumnerian monetary policy.  Seriously, but without the hat tip.

2. More fiscal stimulus.

3. Job subsidies and working sharing.

His rationale is political: Since politicians are too evil/stupid/cowardly to do #1 or #2, #3 is all we have left.*  Scott Sumner’s got a typically great reply:

This is a foolish game to play.  There is zero chance Congress would
spend enough money on these “third-best” options to make a dent in
unemployment.  God only knows what his 4th best option is.

I’m willing to take a guess.  Since Krugman’s largely forgotten his free-market labor economics, I fear that his 4th best option is going to be protectionism.  If Krugman’s idol Keynes could warm up to protectionism during the Great Depression, why couldn’t Krugman do the same?

* Of course, if Krugman were truly a political animal, he wouldn’t
propose bold new ideas and then immediately insult them as
“third-best.”  Dare I hope that the good Krugman could still make a comeback?