The Paul Krugman Thread


Mossy, No disrespect meant, but really are you just joking when you write this stuff?

Are you a wind up artist?


No, I’m not. It’s called living within our means.



What does that mean? No State borrowing? No personal borrowing? What?

Or are we just being treated to more American style hare brained conservatism.


Where did I say we should have no borrowings?

What’s your solution sunshine?


Future Generations Will Be Indebted to Me for the Clarity of This Exposition - Robert P Murphy -> … ition.html


The Austerity Debacle


nothing like austerity in the UK

QE of 275 billion
spending is up hugely since 2006

Given his standing he should spend more time coming up with real solutions rather than posting non facts. Surely he can do much better

Finding information which proves your own bias is easy (if he bother to check the figures in the first place)

Nassim Taleb’s explanation of the confirmation fallacy makes a good point about this


So because of QE the spending cuts dont exist? Total bollox.

The British government has cut expenditure under the Tories and plans to continue to do so. Fact.

Here is an example of cutting in action btw. See, its not imaginary:

That feels pretty austere to me :unamused:


No, because spending is up so much since 2006, it is not austerity, it is removal of stimulus.

You wave your magic wand and a pile of consequenceless money appears for you to save us all.


Paul Krugman: Romney Isn’t Concerned

Who does Romney care about?:

well made point
now maybe be can show how money printing benefits the rich and corrupt ‘too big to fail’ on wall st


I’m really starting to believe that the longer this debate goes on, what we are seeing is an argument between experts like Krugman and Bernanke and non expert poilitcal ideologues like Ron Paul, or maybe you?
Even the term “printing money” is value laden, a gross simplification of what, it seems to me, is the complexity of quantitive easing and the reasons why it can be used in certain circumstances to help economies recover from recession.

The crash has taught us nothing else if not the folly of unquestionally listening to our betters but in the maelstrom of highly politically charged debate about economics that we have become engulfed in over the last four years, I have taken the view that I am just not going to listen to the non- expert voices all that much. Even Yoganmahew, a well respected poster on these boards, who contributed a couple of posts back is not afaik an expert in macro economics. Why should I listen to him over Krugman or Roubini or Christine Rohmer or Brad De Long or even Morgan Kelly?

Macro economics is hard complex stuff. The people that understand are smart, smart people, much smarter that the political axe grinders over at the Von Mises institute of the ones making those silly you tube videos attacking Bernanke. And Im certainly not going to listen to the likes of Ron Paul.

Anyway, here is what Krugman who ( like it or not has forgotten more about this stuff than any of us are likely to know) had to say about QE back in November.


To a man whose only tool is a hammer, every problem looks like a nail. It does not matter what term you use to describe the activities of Bernanke and the other central bankers their only tool is the printing press.

Here is the latest M2 money supply ->

Getting back to the gold standard -> … 2012-02-02


And your predictions that increasing the money supply as shown in the chart above would lead to hyperinflation have proved to be bullshit so what’s your point? The money supply has increased, so what?

I dont think that Libertarian economists, for example, who pose as the oppostion to the orthodoxy espoused by Bernanke have proved themselves credible and until they do why should I put them on an equal footing with other economists who are more credible?

To use the football term, Show us your medals.


How much did you pay to fill up your car recently, did you get more litres of petrol or diesel for your money?
How does the price you pay today compare with this time last year, or two years ago even?
Why is the inflation rate in oil producing countries higher than in the non exporters?
Why do bus and train fares keep rising every year?
Why does the price label stay the same but there is less food in the container?
Has the quality of the food you eat increased as the price rises, are you eating more mince meat instead of steak?
Why if you don’t have a clever accountant or lobby group is the amount of tax you pay rising?
The effects of inflation are cumulative and persistent, you may not have paid much attention to it during the boom when your income was rising and you could use your house as an ATM, but, now your income is shrinking, it’s hurting your pocket and impacting your quality of life. Unless you are the person getting the money first, inflation is hurting you.

You know Greenspan was once regarded as the hero, they were lavishing praise on him on his retirement. His “put” option created a moral hazard, when they saw the hedge fund LTCM get bailed out in 1998 and the investment bank bailout in 2000/01 (dot com crash), they just took bigger and bigger risks. Bernanke just extended Greenspans policy times five and rewarded bad behaviour. The notional value of derivatives are bigger than ever before, government debts are bigger than ever before.

There is no such thing as growth to infinity, every system has it’s limits. The FIRE economy should have been downsized and reformed and focus switched to other productive endeavours, instead they have propped up the shadow banking system, prolonged and extended the wars and have moved the problem around so that it manifests itself in the sovereign debt crisis.


I didn’t predict that. I predicted further asset bubbles that would raise the cost of living thereby defeating attempts to reduce it and cap the effects of reduced wages.

Unfortunately, CPI and HICP baskets are gamed, so inflation figures don’t reflect the rises in costs.

And the unseemly dash to globalisation and trade ‘freedom’ from the trade liberals has resulted in low traction for labour.

The conventional wisdom has been wrong, wrong, wrong. Yet it is still the conventional wisdom.

I prefer to listen to the likes of Steve Keen…

PS Nouriel Roubini predicted a continuing crash last year (it didn’t happen). Brad de Long predicted a recovery that has not happened.

Morgan Kelly, AFAIK, has not predicted much outside the sixteenth century, apart from the banking thing and his advice anyway is to cut the deficit to zero immediately. That’s advice I agree with.


And your special qualifications are what precisely?


He’s referring to the qualifications of Krugman and Bernanke… I don’t know. You’d think that people claiming not to be total morons yet believe they have such revelatory insights to put to such an accomplished professor like Krugman would at least try to learn something of the point in dispute - the seeming paradox of liquidity-preference versus loanable-funds models of interest rates… But not a bit of it. They just try to out-shout the accomplished learning. What’s worse is that this tactic is having such success in this brave new internet world. In my view if the policy makers do eventually properly heed Krugman, and we manage to come through this recession, he’ll be due another medal - bigger than any he’s got before. These empty vessels shouting against Krugman and Bernanke and others are more of a threat than global warming, even. That’s no exaggeration. If it was down to me, I’d line them up against the wall. Free speech is not unremittingly and repetitively shouting slogans and sound-bites into the brains of the masses, that are based on nothing but self-interest, contrived ignorance and wilful contempt for the greater good in the name of this self-interest.


As Yogan pointed out, you have other people who are just as accomplished who have a vastly different view. I would add Dr Michael Hudson to his list.

When he goes on about not listening to others such as Yogan, he is not limiting his attack to the degreed luminaries who are pontificating on this mess.


Do not Hudson and others talk more about the political problem - the parasitical financial sector and what it has become and how entrenched it is (within government and in other ways too).

But it is a mistake to conflate the political problem with the essential economic solution.

I have read some of Hudson’s articles and they impressed me. But I do not ever recall him saying that we should throw the precious baby out with the bathwater the same way that these radical Mises devotee economists and hedge fund managers call for.