tag:blogger.com,1999:blog-6276561747841568697.post1216118666779713759..comments2024-03-27T05:23:48.855-04:00Comments on Krugman-in-Wonderland: Yeah, I Kind of Agree With Krugman HereWilliam L. Andersonhttp://www.blogger.com/profile/01802990642236807359noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-6276561747841568697.post-40338398181201514632010-08-02T12:53:36.903-04:002010-08-02T12:53:36.903-04:00Oops. Sorry for the mispost: my previous comment i...Oops. Sorry for the mispost: my previous comment is in reference to the recent 'Krugman vs JG' article.Chip Normannoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-75742809600337648732010-08-02T12:50:04.646-04:002010-08-02T12:50:04.646-04:00If Mr. Galbraith is correct - and wouldn't it ...If Mr. Galbraith is correct - and wouldn't it be glorious - the Fed may as well change the digits in every American's checking account to $200,000. Or, perhaps $2,000,000 would provide a better stimulus. And why stop there? Why stop at all? <br /><br />Before we arrive at notes that would make Zimbabwe blush, we might simply replace the electronic digits in our checking accounts with the infinity symbol. Just think of all the wonderful things we'd be able to buy.Chip Normannoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-83147658776034541092010-07-23T01:11:23.091-04:002010-07-23T01:11:23.091-04:00In response to a comment on the original article, ...In response to a comment on the original article, I would like to note that, as I understand it, Krugman isn't referring to the <i>price of money</i> when he assumes the price level is proportional to the money supply, but to overall price levels. Which makes logical sense, although, when you factor time into the equation, it is of questionable value for real number calculations, being stilted and strictly mathematical. Like most aggregates and economic equations...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-68987680734080981212010-07-18T09:03:41.728-04:002010-07-18T09:03:41.728-04:00Thanks for the links, Professor. The Romania artic...Thanks for the links, Professor. The Romania article is enlightening - particularly in how the World Bank was helping prop up the regime!Tim Johnstonhttps://www.blogger.com/profile/02470464053181422637noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-42240028992232486552010-07-18T07:31:20.426-04:002010-07-18T07:31:20.426-04:00I fully agree with Tim. Robert Higgs published a v...I fully agree with Tim. Robert Higgs published a very good paper in 1992 on the U.S. economy and World War II and myth of prosperity:<br /><br />http://www.independent.org/newsroom/article.asp?id=138<br /><br />You have to understand that Krugman looks at one thing: unemployment. If people are employed, then life is good, and you don't need anything else. I remember hearing a Marxist during the Cold War claim that Romania was a great place because "there is no unemployment there."<br /><br />Well, actually there was unemployment, but life for people was very, very hard, to put it mildly. Jim Bovard recently had a good article about his trip to Romania during that time:<br /><br />http://jimbovard.com/blog/2010/05/21/orient-express-to-hell/<br /><br />Often, Krugman and I are speaking of the proverbial apples and oranges. Consumption in my terms is "spending" in his. In my view, production and consumption must be intricately tied in with one another; in Krugman's view, they are not. <br /><br />As for the comments by the first person, you are partially right. Krugman really does not think much about wealth, or really defines it. To him, there is production and spending, and as long as there is the latter, we will have the former and then we can have full employment. That pretty much is his definition of an economy.William L. Andersonhttps://www.blogger.com/profile/01802990642236807359noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-25242534369789563072010-07-17T22:05:01.581-04:002010-07-17T22:05:01.581-04:00I abhor the idea that war creates stimulus rather ...I abhor the idea that war creates stimulus rather than racking up debt. War sure gets us producing things - like shells and tanks - but, at least in Britain, at the expense of some consumer goods. In that case production made everyone poorer (particularly the cities on which those produced goods landed!).Tim Johnstonhttps://www.blogger.com/profile/02470464053181422637noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-45369980386117125382010-07-17T21:09:16.726-04:002010-07-17T21:09:16.726-04:00From Krugman:
ere’s no question that right now th...From Krugman:<br /><br />ere’s no question that right now there is no problem: if the Fed issues money, it will in fact just sit there. That’s what happens when you’re in a liquidity trap. And there’s also no question that right now, the proposition that the government can “create wealth by printing money”, which some other commenters call absurd, is the simple truth: deficit-financed government spending, paid for with either debt or newly created cash, will put resources that would otherwise be idle to work.<br /><br />But we won’t always be in this situation — or at least I hope not! Someday the private sector will see enough opportunities to want to invest its savings in plant and equipment, not leave them sitting idle, and the economy will return to more or less full employment without needing deficit spending to keep it there. At that point, money that the government prints won’t just sit there, it will feed inflation, and the government will indeed need to persuade the private sector to make resources available for government use.<br /><br />And that’s why I don’t accept the idea that deficits are never a problem.<br /><br />Again, as a practical matter I don’t think we have a disagreement: right now we’re in a world where deficits really, truly don’t matter. And at the rate we’re going, it seems unlikely that we’ll have to worry about policy choices near full employment until, oh, late in Sarah Palin’s second term.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-59648114507460111362010-07-17T20:48:50.874-04:002010-07-17T20:48:50.874-04:00I would argue Anderson’s rendering of Krugman’s po...I would argue Anderson’s rendering of Krugman’s position is entirely legitimate.<br /><br />First, you said it yourself. Monetary stimulus during WWII got people back to work producing stuff. Are you saying Krugman would argue that producing more stuff does not make society as a whole wealthier (whether its private business or public works doing the producing)?<br /><br />Beyond ‘depression economics’ I have heard Krugman advocate an ever-expanding money supply to keep inflation at 2-3% to ensure a growing economy. I think that qualifies as a we-have-to-print-money-to-increase wealth position. (Granted, many other mainstream economists advocate this).<br /><br />Austrian economists do not advocate these measures (much less a money supply managed by the state). Artificial credit inflation (which Krugman advocates) is the source of the business cycle in the first place. It causes people to misallocate resources through time and produce things they would otherwise not. To re-align the economy back to producing what people actually want, the artificial expansion must be ended and prices must be allowed to adjust. (by extension, Austrian economists argue that WWII did not get us out of the Great Depression http://www.independent.org/newsroom/article.asp?id=138)Richardnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-68993921760696647812010-07-17T19:35:43.978-04:002010-07-17T19:35:43.978-04:00Not to come off to harshly but one of the reasons ...Not to come off to harshly but one of the reasons your not even close to Krugman in terms of intellect/significance is probably because of your lack of coherence in your discussion when it's not convenient for the profound bias of your position. Take for example the simplification of Krugmans's call for greater stimulus as "a claim that printing money creates wealth"- this is misrepresenting Krugman's idea so that it seems absurd- Krugman would state that a stimulus does work, thats how we emerged out the last depression- with the war as the reason the govt money provided jobs and the economy rebounded.Anonymousnoreply@blogger.com