What was significant about that whole affair was that Krugman and his friends and admirers for the last two years have called Sarah Palin a liar because she said that federalizing medical care ultimately will feature what she called "death panels." Krugman called the idea a "complete fabrication," except that he obviously understood all along that a U.S. government medical care program, which would be responsible for determining who receives medical care, would emulate those Europeans Krugman so much admires, and those countries have death panels.
The reason I bring up last week's incident is that Krugman now takes a stray quote from Alan Simpson as "proof" that there is some sort of GOP conspiracy to shut down the federal government and destroy the world:
Now, you might think that the prospect of this kind of standoff, which might deny many Americans essential services, wreak havoc in financial markets and undermine America’s role in the world, would worry all men of good will. But no, Mr. Simpson “can’t wait.” And he’s what passes, these days, for a reasonable Republican.Now, I am no fan of Alan Simpson and really don't take anything he says very seriously. Yes, he and Erskine Bowles co-chaired a "Deficit Commission," which also was nothing less than one of the dog-and-pony shows that Washington brings out once in a while to dazzle the media and to tell the taxpayers that Washington Is Serious About Cutting The Deficit.
Yes, I am sure that some Republicans are going to make noise when the debt limit has to be raised this coming spring in order for the U.S. Government to continue borrowing at unsustainable levels. Furthermore, after a few members of Congress engage in The Usual Grandstanding, demand some "concessions" from President Obama (which he will ignore after making public show of concern for the deficit), Congress will vote to extend the debt limit and go on its merry way.
In the past, we even have had to veritable "train wreck" in which the debt limit passes and (horrors) THE GOVERNMENT SHUTS DOWN. Except that it really does not shut down. Yes, they make a big show of closing the Washington Monument, and I am sure that there would be a few other high-profile, low-impact closings in order to try to convince people that Their Savior Is Not Operating, and the Usual Suspects in the media will play Their Usual Role in telling us we're doomed unless Washington can spend more.
As Krugman continues his role as a partisan shill, he gives us this gem:
...the G.O.P. opposes anything that might help sustain demand in a depressed economy — even aid to small businesses, which the party claims to love.I had not realized that he was getting ready to trot out the unemployment benefits canard again. Now, if Krugman really were to believe this "demand" nonsense, I wonder why he does not endorse Washington just creating a few trillion dollars or more and just leaving the sacks of money at our doorsteps just before Black Friday. You want spending? We'll GIVE you spending!
Right now, in particular, Republicans are blocking an extension of unemployment benefits — an action that will both cause immense hardship and drain purchasing power from an already sputtering economy. But there’s no point appealing to the better angels of their nature; America just doesn’t work that way anymore.
Yes, yes, we know. Had the government spent $1.2 trillion instead of $800 billion for its "stimulus" efforts, we would be in a full-blown recovery by now. All for the want of $400 billion, and now the Evil GOP wants to end any more "stimulus" efforts and destroy the world.
Let's sum it up. Krugman uses the actual term "death panels" but really does not mean "death panels," except we know that he does. Alan Simpson uses "blood bath" and he obviously means every word. Emmanuel Goldstein lives!
Thank you, Mr. Anderson for maintaining this site to rebut Mr. Krugman. I don't read anything he writes any more. He gets inordinate attention because of his Nobel Prize, but I think the January 2009 decision to award the Peace Prize to President Obama (actually announced later) demonstrates the current intellectual bankruptcy of the Nobel Committee. Of course years ago, the Committee seemed much better, e.g., the prizes awarded to Friedman and Hayek.
Someone needs to do the work of rebutting Mr. Krugman's stuff.
There is no way any of you could understand this but please try. This is way to advanced for you guys- when you see those models Krugman brilliantly formulated, you will probably be so lost. He's one of the great economist ever and you always distort his views. Its not okay if your team doesn't win like when they award the prize to someone who is actually smart and liberal. Friedman would be horrified with your crazy views.
@Anonymous Kindly support you position instead of trying to bore us into submission with this 'brilliant' formulation that will leave the 'team' inadvertantly 'so lost'. Which views do you consider crazy? Please expound.
Since Krugman has announced that we are in fact going back to the economic dark ages, one would think that he would bother to refute those with the allegedly “wrong” and “backwards” views in that same blog post. Of course, he did not, cannot and dare not.
Similarly, Krugman’s new paper DOES NOT bother to refute the allegedly dark age Austrians. There is no mention whatsoever. Behind all of his math, Krugman has nothing to offer other than convoluted schemes for surreptitiously robbing and transferring purchasing power to cure a non-problem.
[T]he shock that pushes the economy into a situation in which even a zero interest rate isn’t low enough….
Low enough for what? What garbage. What a fraud.
“In what follows, we begin by setting out a flexible-price endowment model in which “impatient” agents borrow from “patient” agents, but are subject to a debt limit. If this debt limit is, for some reason, suddenly reduced, the impatient agents are forced to cut spending; if the required deleveraging is large enough, the result can easily be to push the economy up against the zero lower bound. If debt takes the form of nominal obligations, Fisherian debt deflation magnifies the effect of the initial shock.”
I don’t dispute that once a central bank has diluted the currency and has caused boom-based malinvestments that few will borrow more funny money as the bust begins, even as the interest rate is artificially lowered to near zero. But everything Krugman says and believes is based upon the phony argument that the market is stagnant without money dilution and government debt. There should have been no artificial setting of interest rates by the central bank at all, and the central bank should go out of business and its members jailed for fraud. No money dilution, no zero bound problem to “fix”. No money dilution, no game playing with funny money induced prices.
Of course, since the essence of economics is economic calculation, the quickest way to re-establish proper economic calculation following the Keynesian distortion is for the government to do absolutely nothing to impair the necessary repricing. And we can always count on Keynesians and their various cousins to be oblivious to the concept of economic calculation because there are no real human beings in their "models".
had the government spent $1.2 trillion instead of $800 billion for its "stimulus" efforts, we would be in a full-blown recovery by now.
Along with a clean of the banks, and some decent industrial policy to rebuild manufacturing.
Industrial policy? Hey, the U.S.S.R. had "industrial policy" too, but it didn't do them any good!
Industrial policy? Hey, the U.S.S.R. had "industrial policy" too, but it didn't do them any good!
And the US, Germany and a host of other 19th countries industrialized by using infant industry protectionism.
And Japan, South Korea, Taiwan and China are now industrial giants by use of industrial policy.
As for the Soviet Union, they had a brutal, rigid command economy and a bloated military budget - a type of system that ultimately failed, and deserved to fail due to its immoral authoritarian, murderous and repressive nature.
Again you commit the fallacy of composition. This is the level of your reasoning:
(1) A communist state (e.g., Soviet Union) has industrial policy.
(2) Japan (Taiwan, South Korea etc) have industrial policy.
(30 Therefore Japan (Taiwan, South Korea etc) is communist.
Incidentally, if the Soviet Union was never capable of producing any industrial goods (which is what your comment seems to imply), how exactly did they defeat Nazi Germany? (And don't use a pathetic straw man argument and claim that I support communism, because I don't).
"And don't use a pathetic straw man argument and claim that I support communism, because I don't"
You don't even know what you support! This is mind-blowingly hilarious.
"And the US, Germany and a host of other 19th countries industrialized by using infant industry protectionism."
All you can say is that these countries "industrialised" and that they used some measure of "infant industry protection". That does not mean that the latter was responsible for the former. For that, you need to (as usual) claim that correlation implies causation.
Or do you have a coherent theory that establishes the causal relationship?
How's the latest chronicle coming up, economic historian?
Appears as if no one has any ideas to reestablish growth.
I have no, none, zero confidence in right wing economics.
To the state-corporate partnership running the U.S., 'industrial planning' is just another means of making a buck off of the rest of us;
(How is that for right wing economic analysis?)
"Appears as if no one has any ideas to reestablish growth.
I have no, none, zero confidence in right wing economics. "
you cant step forward without understanding why you stepped back. the ideas on how to reestablish growth exist in entrepreneurs, NOT our politicians. they just get in the way raising taxes on them and creating more burdensome regulations "for our own good".
Why don't they just cut spending, instead of raising the phony baloney "debt ceiling"?
"As for the Soviet Union, they had a brutal, rigid command economy and a bloated military budget - a type of system that ultimately failed, and deserved to fail due to its immoral authoritarian, murderous and repressive nature."
I have a feeling you live in a country with a brutal, rigid command economy and a bloated military budget which probably deserves to fail due to its immoral authoritarian murderous and repressive nature.
While I understand LK's point, my point was not that all economic planning is communist, but rather that the communists were willing to put deadly force behind it, and their efforts still were unsuccessful.
If one wishes to apply the Fallacy of Composition, well, that works both ways. Because some state-connected industries are successful, that does not mean the policy in question is good for the entire economy.
Look, people in the corn ethanol business are successful, too, but not because they sell a good product but because:
1. Their industry produces a product that the government requires that we purchase, whether or not we want to do it.
2. Their industry receives political favors such as special tax breaks, outright subsidies, and other such things.
So, we really have to be careful about that point. I oppose centralized "industrial policy" because there is no way to separate the politics from the planning, and political entrepreneurship is based upon government favoring some people over others.
Corn ethanol a success? Nobel Prize winner Al Gore just said last week that corn ethanol
subsidies were a bad idea. And we all know how smart and wise Gore is.
"Corn ethanol a success? Nobel Prize winner Al Gore just said last week that corn ethanol
subsidies were a bad idea."
im not entirely sure if you are for CS because gore isnt, or you think Pr. A does support subsidies?
if its the latter, read it a little closer. Prof. A wasnt making the case that they are good or righteous, rather that producers make money (i.e. have success) based on mandates and giveaways.
or were you just throwing out a related link?
"I had not realized that he was getting ready to trot out the unemployment benefits canard again."
I like your blog. Its very good. But if you must dismiss Kruigman's views like this at least link to a post where you have made the effort to deconstruct what he says. Otherwise you just discredit yourself.
The blogger program seems to be be eating and deleting posts again.
I posted something which appeared as post #19 and within minutes it was gone and the post count was back to 18. I did this three times on two different computers over a period of 16 hours.
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