Bob Murphy proves again that there is no better critic of Paul Krugman and Voodoo Economics, as he uses Krugman's own data to point out flaws in the analysis of The Great One. I'll let readers go through the various quotes and charts that Murphy employs, but will add that once again, we see Krugman employing some sleight-of-hand in mixing the way he portrays job and wage numbers in order to cloud the picture.
What Krugman has been saying is that the current depression is due to an overall general lack of "demand," as opposed to structural imbalances in the economy. Thus, the way to "cure" the problem is for the government to throw trillions of dollars at it, and magically, things will turn around. However, as Murphy demonstrates, Krugman's own numbers, when presented in a normalized fashion, seem to support the Austrian argument.
Not that Krugman ever would admit it.
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What Krugman has been saying is that the current depression is due to an overall general lack of "demand," as opposed to structural imbalances in the economy.
What are the structural imbalances and what do you suggest needs to be done to improve the economy?
"What Krugman has been saying is that the current depression is due to an overall general lack of "demand,""
Which, if you understand capital theory in the slightest, you'd know there is no such thing as a "lack" of demand, it is MALinvested. A.K.A. demand is pushed into unprofitable ventures.
"A supply 'x' creates demand for 'y' and 'z', etc." - paraphrasing of Says law (the main one).
"What are the structural imbalances"
They are malinvestments caused by a distorted yield curve (investors don't know the true term structure of savings due to artificially low interest rates).
"what do you suggest needs to be done to improve the economy? "
Let the market decide what interest rates should be...
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