tag:blogger.com,1999:blog-6276561747841568697.post4272361358334068650..comments2024-03-27T05:23:48.855-04:00Comments on Krugman-in-Wonderland: Every(Krug)manWilliam L. Andersonhttp://www.blogger.com/profile/01802990642236807359noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-6276561747841568697.post-22263861135505645492010-10-09T17:50:48.599-04:002010-10-09T17:50:48.599-04:00You completely miss the point about WWII
Certainl...You completely miss the point about WWII<br /><br />Certainly it was the <i>stimulus</i> imparted to the economy by full employment that drove the economy into overdrive and set it up for record post-WWII growth under Keynesian management.<br />But you did NOT need war to effect such stimulus: you could have given a huge Keynesian boost to the economy by large infrastructure spending, social spending, education spending, giving all Americans a national health care system, Keynesian tax cuts etc, with the SAME functional effect but with useful things to show for it.<br /><br />And don’t tell me that Roosevelt “tried stimulus and it failed” and all that nonsense, because, as is well known, US GDP recovered rapidly under Roosevelt and unemployment came down from 24.9% to 14.3% before Roosevelt balanced the budget in 1937 with disastrous effects. The real trouble with Roosevelt was that he was just too timid:<br /><br />Brown, E. Cary. “Fiscal Policy in the Thirties: A Reappraisal.” American Economic Review 46 (December 1956): 857-879.<br /><br />The contractionary effects of state and local government cuts reduced the stimulus effect of discretionary deficit spending.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-77875468544059152162010-10-01T14:40:46.480-04:002010-10-01T14:40:46.480-04:00lol Anonymous..maybe you should study logical fall...lol Anonymous..maybe you should study logical fallacies. John Maynard Keynes never held a degree in economics...so he's wrong. What type of fool could believe him? <br /><br />I can do it too.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-42780963575481978422010-09-30T23:57:05.642-04:002010-09-30T23:57:05.642-04:00You say that a Princeton and MIT graduate who has ...You say that a Princeton and MIT graduate who has developed important trade theories would not be able to understand what Mises and Hayek developed, just because you disagree on economics with Krugman- what a shame. You could never understand the New Trade Theory that Krugman developed which he won the NOBEL PRIZE FOR!!!!!!! What contributions to economics have you made? None, of course. Thats why you teach at Frostburg State or whatever its called. Hey, if you want to talk about Krugman not understanding economics just because he's a big government guy, I can sink to your low dialogue level too.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-7181562518819191742010-09-29T20:06:23.716-04:002010-09-29T20:06:23.716-04:00Thomas Hoenig, president of the Federal Reserve Ba...<a href="http://www.bloomberg.com/news/2010-09-24/fed-dissenter-hoenig-s-campaign-against-easy-credit-has-roots-in-prairie.html" rel="nofollow"> Thomas Hoenig,</a> president of the Federal Reserve Bank of Kansas City, distrusts real easy money, but he still likes the Fed. And Krugman doesn’t like Hoenig.Bob Roddisnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-67130713542344083092010-09-29T17:16:46.653-04:002010-09-29T17:16:46.653-04:00This comment has been removed by the author.sb101https://www.blogger.com/profile/05719317618259246022noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-33850900485122419152010-09-29T13:38:48.650-04:002010-09-29T13:38:48.650-04:00And when we’re experiencing depression economics, ...<i>And when we’re experiencing depression economics, by which I mean a situation in which it’s hard to create sufficient demand to achieve full employment — mainly because short-term interest rates are up against the zero lower bound — the essentially amoral nature of economics becomes even more acute.</i><br /><br />This is precisely where Krugman admits to an underlying belief in Austrian economics: Explaining why "pump-priming" wokrs only in certain situations, even relying on the interest rate as an influence, needs to appeal to the structure of production.<br /><br />When there is a robust well-invested economy, additional spending by a government - with at least one stage of malinvested resources (having to go through the gov't bureaucracy has costs) - will still flow into productive sectors. This, of course, is represented on the market as a positive interest rate, because invested money still have productive returns in the "good" sections of the economy.<br /><br />If the economy's resources are mal-invested, however, we get into Krugman's "depression economics". But instead of needed some patchwork theory that applies only in certain situations, Austrians can apply their same theory to explain why pump priming isn't working. As the interest rate has been driven down, and unsustainable investments have risen, there is simply less actual return on invested resources, especially when the expenditures of gov't are to primarily failing institutions. <br /><br />Krugman looks to the interest rate as his "trigger" as to which set of economics to use (note that he still has the same prescription in either case, just the degree changes - spend, or spend more), and he is using the interest rate an independent variable in his blessed equations. In reality, the interest rate is tied directly to how capital structure is put to use, giving rise to real conditions where money creation or deficit spending by the central bank can either be absorbed into genuine profitable businesses if only these businesses are operating, or be in a chase after bad, negative return investments if these have been allowed to survive in an economy with below market rates or direct subsidy.<br /><br />The answer to "Depression economics" should be evident, even obvious, to someone who blames low interest rates - let the interest rates rise (preferably freely on the market). Even if the excuse is just so gov't spending can gain traction, it's an admission that (artificially) low interest rates harm the real returns from the economy, which can only be explained with the ABCT.iawainoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-40234402250264061342010-09-29T10:08:30.847-04:002010-09-29T10:08:30.847-04:00_______________________________
Our Economy is in..._______________________________<br /><br /><b>Our Economy is in Shamble</b><br /><br /><b><i>The consequences, the Great Depression and history tells us, will necessarily be a Formidable Chaos:</i></b><br /><br />Social and political turmoils, and military adventures.<br /><br /><b>Neither supranational bodies nor governments can propose a plausible solution;<br /><br />What is Politically Correct is both Mathematically and Morally Wrong!</b><br /><br />_______________________________<br /><br /><i>- Do you feel that your ideology pushed you to make decisions that you wish you had not made?</i><br /><br /><i>- Well, remember that what an ideology is, is a conceptual framework with the way people deal with reality. Everyone has one. You have to -- to <br /><br />exist, you need an ideology. The question is whether it is accurate or not. And what I'm saying to you is, yes, I found a flaw. I don't know how <br /><br />significant or permanent it is, but I've been very distressed by that fact.</i><br /><br /><i>- You found a flaw in the reality...(!!!???)</i><br /><br /><i>- Flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.</i><br /><br /><i>- In other words, you found that your view of the world, your ideology, was not right, it was not working? </i><br /><br /><i>- That is -- precisely. No, that's precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence <br /><br />that it was working exceptionally well.</i><br />_______________________________<br /><br /><br /><b>It is our responsability to create a meaningful increment of jobs, revenues and investments:</b><br /><br />We urgently need the only plausible solution that is offered to us:<br /><br /><b>An Innovative Credit Free, Free Market Economy.</b><br /><br />It is your duty to insure your own security and economic survival, no one else will do that for you!<br /><br /><br /><i>History teaches us that men and nations behave wisely once they have exhausted all other alternatives.</i><br /><br /><b>_______________________________</b><br /><br /><a href="http://post-crash.com" rel="nofollow"><b>Credit Free Economy</b></a><br />More Jobs, No Debt, No Fear.<br />Prosperous, Fair and Stable.<br /><a href="http://post-crash.com" rel="nofollow">http://post-crash.com</a><br /><br /><b>_______________________________</b>Maestrohttps://www.blogger.com/profile/02329956808668193091noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-81533339579649405112010-09-29T09:40:36.327-04:002010-09-29T09:40:36.327-04:00Krugman and the Keynesians are toast.
Krugman a...Krugman and the Keynesians are toast.<br /><br /><a href="http://krugman.blogs.nytimes.com/2010/09/25/arsenal-of-recovery/" rel="nofollow"> Krugman admits</a> that there really is no historical evidence that Keynesianism has ever worked:<br /><br /><em>Now, you might ask why we’re still looking at 70-year-old data on this subject. The answer is that periods of war or preparation for war are, in practice, the <b>only really clear-cut cases we have of big increases in government spending in the face of a depressed economy.</b> </em><br /><br /><a href="http://krugman.blogs.nytimes.com/2010/09/25/default-is-in-our-stars/" rel="nofollow"> Here he admits</a> that he’s basically just a dreaded “liquidationist” and gives an essentially Austrian explanation of how WWII ended the depression:<br /><br /><em>So what will happen? In the end, I’d argue, what must happen is an effective default on a significant part of debt, one way or another. The default could be implicit, via a period of moderate inflation that reduces the real burden of debt; that’s how World War II cured the depression. Or, if not, we could see a gradual, painful process of individual defaults and bankruptcies, which ends up reducing overall debt.<br /><br />And that’s what is happening now: as this story in today’s Times points out, the main force behind the gratifying decline in consumer debt appears to be default rather than thrift.</em><br /><br />Thus, we can liquidate via open defaults and bankruptcy, or through surreptitious subterfuge, fraud and theft via fiat money dilution.Bob Roddisnoreply@blogger.com