tag:blogger.com,1999:blog-6276561747841568697.post4474774729383832211..comments2024-03-27T05:23:48.855-04:00Comments on Krugman-in-Wonderland: Spain, Unemployment, and RecessionWilliam L. Andersonhttp://www.blogger.com/profile/01802990642236807359noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-6276561747841568697.post-86037439195440345092010-02-15T17:21:05.155-05:002010-02-15T17:21:05.155-05:00Great post, Mr. Anderson.
I don't really know...Great post, Mr. Anderson. <br />I don't really know how economists can regard him as a serious man. As you say, he doesn't explaing anything at all. He is obsessed with the issue of fiscal irresponsibility: it seems he repeats in every article the following: "we have economic problems, but don't you blame fiscal irresponsibility, please!". Ah, the deficit hawks.<br /><br />Besides the lack of freedom in the labor market, there are more issues in play. Spain suffered a huge real-state bubble (more intense than the US one, according to some estimates). The necessary readjustments haven't happened yet, because banks and savings banks seem to live in a different world and don't let prices fall. Of course, government has a part of responsibility here. So, besides the high unemployment rate now, maybe the worse news is that adjustments haven't happened yet, so we will suffer a long recession and stagnation.<br /><br />Also, the Zapatero administration is losing all its credibility (given that they had some previously) every time he or his colleagues speak. It may be some kind of regime uncertainty, or plainly, that investors don't believe this disastrous administration.<br /><br />Congratulations for this blog!<br />bestAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-3043918223846992182010-02-11T08:20:36.344-05:002010-02-11T08:20:36.344-05:00The standard Keynesian solution is for the governm...The standard Keynesian solution is for the government to inflate the currency in order to cut wages via monetary debasement. (Keynes said that in his view, the wage earner was interested only in his "money wage," or nominal pay. Thus, he would not even notice.)<br /><br />Krugman simply is continuing that line of thinking.William L. Andersonhttps://www.blogger.com/profile/01802990642236807359noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-42753616602805849662010-02-10T16:13:03.200-05:002010-02-10T16:13:03.200-05:00Professor Anderson,
You absolutely hit the nail o...Professor Anderson,<br /><br />You absolutely hit the nail on the head in regards to Spain's employment woes. High real wages, fueled by strong labor laws and anti-business regulations, have made the Spanish worker much less competitive.<br /><br />Paul Krugman hints at this in one of his blog posts, where compares the cost of a German laborer to that of a Spaniard.<br /><br />It seems absolutely stunning (in a negative sense) that Krugman can then suggest that the solution to Spain's "high wages problem" is monetary inflation. Sorry, since when did wages not respond to increase in the supply of money (at least, over the long-run)? So, while the Reichsbank was circulating million mark notes, were German workers still earning their original wages?<br /><br />When it comes to Spain, Krugman seems to have completely lost base with reality.Jonathan Finegold Catalánhttps://www.blogger.com/profile/16710256011291680376noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-32071346363422366002010-02-10T01:23:56.537-05:002010-02-10T01:23:56.537-05:00"One of the great weaknesses of Keynesian ana..."One of the great weaknesses of Keynesian analysis is its lack of any coherent theory of causality."<br /><br />It is beyond that. It can't make up its mind about which incoherent theory it is going to get behind (though Keynesians always have a solution for the problems they can't explain).Brenthttps://www.blogger.com/profile/17082733937933951407noreply@blogger.com