Paul Krugman: U.S. Economy and the Return of Depression Economics (2009)
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Krugman identifies as a Keynesian and a saltwater economist, and he has criticized the freshwater school on macroeconomics. Though he applies New Keynesian theory in some of his work, he has also criticized it for lacking predictive power and for hewing to ideas like the efficient-market hypothesis and rational expectations. Since the 1990s, he has promoted the IS-LM model as invented by John Hicks, pointing out its relative simplicity compared to New Keynesianism and continued currency in practical economic policy. In the wake of the 2007--2009 financial crisis he has remarked that he is "gravitating towards a Keynes-Fisher-Minsky view of macroeconomics."[155] Post-Keynesian observers cite commonalities between Krugman's views and those of the Post-Keynesian school.[156][157] [158] In recent academic work, he has collaborated with Gauti Eggertsson on a New Keynesian model of debt-overhang and debt-driven slumps, inspired by the writings of Irving Fisher, Hyman Minsky, and Richard Koo. Their work argues that during a debt-driven slump, the "paradox of toil", together with the paradox of flexibility, can exacerbate a liquidity trap, reducing demand and employment.[159] Krugman's support for free trade has provoked considerable ire from the anti-globalization movement.[160][161][162] He once famously quipped that, "If there were an Economist's Creed, it would surely contain the affirmations 'I understand the Principle of Comparative Advantage' and 'I advocate Free Trade'."[163][164] In the same article, Krugman argues that, given the findings of New Trade Theory, "[free trade] has shifted from optimum to reasonable rule of thumb...it can never again be asserted as the policy that economic theory tells us is always right." However, Krugman declares in favor of free trade given the enormous political costs of actively engaging in strategic trade policy (i.e. rent-seeking) and because there is no clear method for a government to discover which industries will ultimately yield positive returns. He also notes that increasing returns and strategic trade theory does not disprove the underlying truth behind comparative advantage. Krugman describes himself as liberal, and has explained that he views the term "liberal" in the American context to mean "more or less what social democratic means in Europe."[98] In a 2009 Newsweek article, Evan Thomas described Krugman as having "all the credentials of a ranking member of the East coast liberal establishment" but also as someone who is anti-establishment, a "scourge of the Bush administration", and a critic of the Obama administration.[116] In 1996, Newsweek's Michael Hirsh remarked, "Say this for Krugman: though an unabashed liberal ... he's ideologically colorblind. He savages the supply-siders of the Reagan-Bush era with the same glee as he does the 'strategic traders' of the Clinton administration."[108] Krugman has advocated free markets in contexts where they are often viewed as controversial. He has written against rent control in favor of supply and demand,[165] likened the opposition against free trade and globalization to the opposition against evolution via natural selection,[161] opposed farm subsidies,[166] argued that sweatshops are preferable to unemployment,[39] dismissed the case for living wages,[167] argued against mandates, subsidies, and tax breaks for ethanol,[168] and questioned NASA's manned space flights.[169] Krugman has also criticized U.S. zoning laws[170] and European labor market regulation.[171][172] He calls current Israeli policy "narrow-minded" and "basically a gradual, long-run form of national suicide", saying that it's "bad for Jews everywhere, not to mention the world". http://en.wikipedia.org/wiki/Paul_krugman
Comments
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To he gentleman who called about losing the dollars in the bank. A good question and I feel for you since everyone should be allowed to be secure in their savings and government should respect that. Presently government and politicians with exception are not caring about that.
But my advice is " Don't be fooled ny this guy" he cannot guarantee that your dollar will still retain it's value and neither can the government. He won't compensate you when a crisis comes. His reassurance is foolish and non caring. You need better advice from someone else wo knows and can protect you by doing their homework. You need a spread of investments in local and overseas markets like Singapore or Asia.
The reason for this is that unfortunatley the government's bank guarantees will only cover a very small percentage (not even 5%) of the money in banks if the crisis comes. There is not enough money committed to it. And I would be worriesd about any government that takes this guy's advice since as he indicated in this video he didn't see the issues with clarity and doesn't intend to see them when it was evident when he said he didn't want to deal with the question put by the gentleman who asked about the failure to predict the previous crisis. He just wiped the question aside !
He doesn't want to know that his lack of ability to predict the previous crisis of 2007 and the one before that . He has not learned what he needs to know !! -
Krugman talks of the banks being in a mess but fails to mention his favoured Fed reserve which he omits to say is in far worse shape than the government and he wants to admit.
He does this deliberatly I believe. He is talking about "not enough spending" but there is no evidence at all that there should be more spending. His example of world war 2 is totally misleading since the debt at the end of WW2 was preceded by the poverty of world war 2 where the US and other countries had all sorts of shotages and disruption.
The answer about gentleman wo asked about the Schiff prediction and others and whay they were not the ones to take notice of is answered by "I don't want to go into that" YEAH RIGHT. He doesn't want to go into admitting that Schiff and others know what to do but Krugman doesn't want to know about it !! WHY NOT ?
Krugman also doesn't want to know when someone gives an example of what should be done like the gentleman who metioned the Reagan administration policy of letting the badly run banks fail. Instead he pretends not to know what the gentleman is asking.
MR Krugman - You have missed the point DELIBERATELY again because you don't want to know fro the reason that it reveals you as an ecomomic fool !!
No he is worried about "deflation" - he is totally confused and out of his depth and anyone who tales his advice is taking a huge risk which will fail.
He says 'We need thrift and prudence'. But in a previous part of the interview he doen't want that for governemnt who spends like a madman and for people who he wants to spend not save.
Now he wants to Nationalise banks but only those who have failed !! Just because they need "aid". But nobody else will get "aid" because they can be allowed to fail. Where wll the "aid come from? Answer that.? .
His answer is Nationalise which failed previously everywhere.
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He says the banks won't lend and people won't borrow. But he wants the government to lend money. Where does this money come from? Only the people since government is not a real person but people are and they are at the bottom end .
We have nearly all seen the picture of a president with the sign on his desk The buck stops here" - at the top but the truth is "The BUCK stops with everyone at the bottom !!" . -
So now Krugman has changed his views. He talks of "we" when he speaks of the mistakes. He fails to mention that he never predicted the present crisis and one of his latests cures in creatiing more money - the "Trillion Dollar Coin" . That s the cure from this depresion. Just read his newspaer articles from last year and earlier this year.
How simplistic is that- peole in the USA or the rest of the world need a new "trillion dollar coin to solve the scarcity problem of their economies. No more need for medical services, sewerage or food - all you need is a bit of that "Trillion dollar coin " folks !!
The guy is a joke !! It is a wonder anyone bothers with him.
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Is he a kind of retard? I mean, his general look, his eyes, his speaking, do they deal with any retardness?
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