tag:blogger.com,1999:blog-6276561747841568697.post7503843533824057449..comments2024-03-27T05:23:48.855-04:00Comments on Krugman-in-Wonderland: Fable of the KrugmanWilliam L. Andersonhttp://www.blogger.com/profile/01802990642236807359noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-6276561747841568697.post-87365486013601993482010-03-16T20:47:30.346-04:002010-03-16T20:47:30.346-04:00Krugman and the Keynesians suffer from an extreme ...Krugman and the Keynesians suffer from an extreme conceptual misunderstanding. They actually believe that their data aggregates are real and that the real world is not real. As <a href="http://krugman.blogs.nytimes.com/2009/12/18/why-economics-is-the-way-it-is/" rel="nofollow">Krugman explains Samuelson</a>:<br /><br /><em>Actually, there was a time when many people thought that institutional economics, which was very much focused on historical context, the complexity of human behavior, and all that, would be the wave of the future. So why didn’t that happen? Why did the model-builders, led by Samuelson, take over instead? <br /><br />The answer, in a word, was the Great Depression.<br /><br />Faced with the Depression, institutional economics turned out to have very little to offer, except to say that it was a complex phenomenon with deep historical roots, and surely there was no easy answer. Meanwhile, model-oriented economists turned quickly to Keynes — who was very much a builder of little models. And what they said was, “This is a failure of effective demand. <strong>You can cure it by pushing this button</strong>.” The fiscal expansion of World War II, although not intended as a Keynesian policy, proved them right.<br /><br />So Samuelson-type economics didn’t win because of its power to cloud men’s minds. It won because in the greatest economic crisis in history, it had something useful to say.</em><br /><br />In the Krugman Wonderland, the government can cure everything just by merely "pushing buttons". Gosh. Why didn't we think of that?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-27379460424230715382010-03-16T17:28:06.210-04:002010-03-16T17:28:06.210-04:00You have to understand that Keynesians do not see ...You have to understand that Keynesians do not see economics as something involving individuals. Instead, they use aggregates, trade balances, and other things mixed with economic fallacies to create an economic scenario as though people don't matter at all.William L. Andersonhttps://www.blogger.com/profile/01802990642236807359noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-88917991375367245812010-03-16T03:09:56.253-04:002010-03-16T03:09:56.253-04:00Great article! I remember reading the opening line...Great article! I remember reading the opening lines of that Krugman piece and thinking, yeah he sees what China is doing with trying to create a trade surplus possibly to hurt American exports in a way that harms the Chinese people (in a way that Communists are inclined to do since they aren't bothered about destroying voluntary exchange of private property as long as they don't destroy it so much as to have nothing left to expropriate for themselves)and then he sounds off about a 'liquidity trap' (all BS)in a way that shows best the Mercantilist view of history and society: Say's Law is not true, markets do not clear, disinterested agents must manage the purchasing power of money and abrogate property rights to allow stimulus when people are reducing wealth through bearishness and underconsumption (ignoring the total contradictions of underconsumption theory within the corpus of Keynesian control of bullishness via tax, when they have interest rates inflexibly low but would rather tax than reduce their expansion of the money supply!)and therefore human society does not manage itself and should be managed by fiat money controllers and agents of fiscal stimulus. And NONE of that is the problem, no it's the solution, remember the nineteenth century and the gold standard was a terrible time of...the fastest growth in living standards throughout all history.Unknownhttps://www.blogger.com/profile/18408286913892328722noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-61945076463358722502010-03-15T17:06:34.263-04:002010-03-15T17:06:34.263-04:00Keep up the posts... they are quite good!
I tend ...Keep up the posts... they are quite good!<br /><br />I tend to side w/ others that have suggested have the Gov find China guilty of patent thief and fine them 900 bln (then default on their t-bills), which is kinda what krugman is calling for in the form of "capital controls"Unknownhttps://www.blogger.com/profile/04488183195882033092noreply@blogger.com