Wages in the US have been exploding for decades. Economists don't measure the gains from product improvement. This video shows a simple equation that will win the debate for Friedman. Just ask 2 simple questions. What is quality? What is convenience? One equation can explain it all. youtube.com/watch?v=2c4mvGekYZY
Although the fed has lowered interest rates on the money banks borrow, the banks increased interest rates on consumer debt. Would it not be a faster recovery if we limited interest rates on consumer debt (usury Laws) instead of creating gov debt because of over spending by the gov?
Please note that my book Keynes Hayek: The Clash That Shaped Modern Economics is published by W.W.Norton in October.
Professor John B.Taylor says that: “Nicholas Wapshott brings the Keynes-Hayek fight of the 20th century back to life, making the clash both entertaining and highly relevant for understanding economic crises of the 21st century.”
Read an extract at: sites.google.com/site/wapshottkeyneshayek/
@csgwee That is the point, government can print money to have more money; households cannot. If the economy goes down, unemployment rises, private borrowing increases at unsustainable interest rates, buying goes down, businesses face failures, unemployment compensation rises, government spends newly created money, new money goes to spenders, spending rises, people get jobs, production increases, unemployment comp declines, more taxes increase government income, the cycle rebounds.
Horrible speaker, says cant predict economy, shows a graph with economy recovering but says he doesn't know the reason behind it, makes horrible jokes.... perfect guy for noble prize...
"To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
While I don't agree with Krugman on many points, I am willing to accept his argument as having validity without necessarily being correct. However, I did find it very concerning when he began discussing the twisting of authority to allow the seizure of private institutions. Power is not a tool granted lightly and it should never be abused to gain more power, no matter how supposedly righteous the cause.
The Y = C + I + G +NX should be re-written to reflect reality.
Y = C + (1.10) I + (-0.8) G and leave off the NX.
The coefficient in from of government and investment changed as the country's need for capital and the % of GDP consumption by government changes. Wouldn't it be nice if the Keynesian employed at the Federal Reserve put their minds to use figuring out the exact negative affect government spending has on the economy?
The Y = C + I + G +NX should be re-written to reflect reality.
Y = C + (1.10) I + (-0.8) G and leave off the NX.
The coefficient in from of government and investment changed as the country's need for capital and the % of GDP consumption by government changes. Wouldn't it be nice if the Keynesian employed at the Federal Reserve put their minds to use figuring out the exact negative affect government spending has on the economy?
Krugman has figured out the business model that being smart and taking an extreme stance, whether left (him) or right, is incredibly rewarding from a monetary stand point. I'm quite sure he will retire a rich elitest and all the more power to him even though I don't always agree with him.
if people are wanna be smartasses and do the libertarian talk "oh you liberal keynesians you spend recklessly and roll up the deficit" pause for a sec.
firstly, keynes HIMSELF was opposed to deficit spending! go read a book or google it for a change.
secondly, not a single bill that deals with economics/finance these days passes congress without approval from big business! corporations WANTED the stimulus cos it meant free money for them. yes capitalism wants & needs a big nanny state.
@dontliethetruth I really don't want to get into a real debate about the Libertarian positions, but I feel it necessary to point out that the idea that Libertarians blindly support the big corporations is a common misconception. On the contrary, we would oppose their will in situations like the fight over the stimulus bill.
This is a single simple fact what 80% of this country do realize.
>> capitalism is better than communism: equality should be put before liberty.
This is a single simple fact what 80% of this country do not realize.
>> Government intervention is required. We have solid proofs including 1930 depression. The question is, what type of intervention at what type of situation.
Nobel prize??? base on what? He could not even foreseen this financial crisis we in like Peter schiff did! If he is that good, why cant he come up with a solution for this crisis?
Stimulus makes no long term sense. Money does not create real wealth, rather capital investment and production does. Look at Japans failed stimulus packages! Unfortunately, Krugman uses the cover that had the stimulus not been implemented, then the situation would be worse, ie depression. Krugman and Keynes have lost nearly all credibility, if they had any...
@Seano71 "Invest in innovation and R & D"... How do you suggest people invest in innovation and R&D do if people are broke. Do you honestly think that the federal government has the God-like power to know what the public demands?
@Seano71 So you propose creating money (a.k.a. inflating the money supply). Where/to whom would the money go? Which companies? Let's say we give stimulus to "Green"-tech companies. What if the public rejects the products developed by these companies? I argue that the LAST thing we need is more stimulus. The recession we are experiencing is a painful but necessary cycle of the "free"-market. Trying to avoid the recession is just delaying the inevitable.
@sentryclothes where do I start? Its not inflating the money supply, its replacing the money banks are hoarding. It would create jobs, cut down the effects of global warming. You understand cap and trade? The whole idea is to get companies to become more environmentally friendly and to allow clean technology a chance to be competitive against fossil fuels. What gives true economic growth is increased output capacity and technological innovation, as well as demand which is key.
@Seano71 Refer Japan regarding replacing money/stimulus....doesn't work. Just makes things worse. And i'm not going to reply to cap and trade - global warming is a non issue. A proven fraud. It's political.
@Seano71 Keep drinking the stimulus kool aid. Capital savings are required, not consumption. Then we will have more r&d etc. Time and time again throughout history stimulus fails. It provides some nominal improvement in various figures and only makes things worse in the long term.
Why would anyone listen to this idiot?! He's the one whose policies have caused the depression and irreversibly destroyed the American economy. He should be shot, not listened to even more!!!
@karlkarlkarl1234 WTF are you talking about? Republican policies caused the first Great Depression. FDR used Keynesian policy to get us out of the problems caused by the Republican policy of transferring the wealth up to the wealthy. Sound familiar? Prettty much every economic disaster since the 1900's have been caused by greedy and short-sighted corporations with the blessing of the corporate owned politicians, mostly Republicans, but with plenty of Democrats that sold out also
If you still believe in the political dichotomy of Republicans vs. Democrats and can't see it for the sham stage-show that it is, you are as dumb & blind as I think you are.
All I have to say is that if you still support Paul Krugman after his policies have destroyed America completely and put it on its knees and looks like it is not going to ever recover and most likely die, well then you are as stupid as I know you are.
Anyone who advocates giving tax payer handouts to banks so their executives can pocket hundreds of billions in bonuses for losing trillions of dollars, and expect that to fix the economy is a flaming retard.
Study finds Paul Krugman is the most partisan economist. Krugman was the only economist to "significantly" change his stances for partisan reasons. Krugman has even gone so far as to contradict his own findings to bash Republican politicians. - Brett Barkley, Econ Journal Watch, May 2010
It says in the byline that Paul Krugman is a Nobel prize winner in Economics of 2008. That is interesting since there is no such thing. It's a prize that is given by the Swedish Central bank.
Is this a second Great Depression? It's going to be worse than the first one. We're going to have to default and we'll see a currency crises. I can fathom no way that we can avoid this. I just hope the government doesn't try to blame it on the free market and grab more power from us and promise to protect us from the very problems it caused. That's my fear though.
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Isnt it interesting .... 1930s .... depression .... upheaval in Germany - inflation .... Zionism. 2008 - 2010 = economic worries again .... upheavals in United States and Europe ... ZIONISM ... KEY WORD = ZIONISM .... Greenspan = jew?? ... Responsible for false credit and lending .... responsible for banking irresponisbility ???? Again ZIONISM is to blame. Film and music industry dominated by jews. Film and music responsible for todays "sick" culture?? AGAIN ... ZIONISM is to blame !!
Going back to Keynesianism (Depression economics) is like telling NASA to abandon Newton's Laws of motion and only consider Aristotle's theory on perpetual motion when it comes to launching spacecraft.
Keynesian theory was discredited academically in the sixties with models showing it lead to stagflation. The 2000s and the seventies later show that the same occurs in practice.
Krugman's so called predictions of this collapse were simply ripped off of Schiff and the Austrians. The Austrians were fr more specific of the collapse, predicting the actual fall of Bear Stearns
Why are the idiots in charge of the collapse of Western civilization put in charge of preventing it? Why does no one is 'government' even consider that Marc Faber, Peter Schiff or that other guy might be more equipped for the jobs at hand?
"Why are the idiots in charge of the collapse of Western civilization put in charge of preventing it? "
Indeed. Outside of the idiocy in government and bureaucracy, the man who argued that species adapt rather than change through the reproduction and natural selection is discredited and no longer consulted upon as an expert or for guidance.
The man that led us into 2 unjust, illegal wars is someone we no longer trust
@mongoose704 its not insane, there is a bill moyers interview with william k black. examining this. if you were to put a new ceo or new personel in charge the first thing they would do is see what happened. The big fear is how bad the whole thing is. no one wants to know, so there not gonna put someone in place to figure it out.
The same Paul Krugman that advocated a record exapansion of government through monetary and debt creation and stimulus packages? The same Paul Krugman that is now advocating the creation of a government and bond bubble as necessary to stave off the burst housing bubble he supported? A bubble that could potentially end the dollar and have disasterous global ramifications?
Yeah we need more Krugmans who say let's solve a debt crisis with by creating record debt.
Mine was not a poor comment at all. In fact one of the best here.
Do you want the facts showing Krugman was all for the government creating a housing bubble? In fact he even alludes to the fact he did in THIS VIDEO! Do you need proof that he is for the current creation of a goverrnment bubble today and is for this current massive expansion of debt and deficits and devaluation of the dollar that will lead to an even worse collapse in the future?
yeah we need more Krugmans, you know, the Paul Krugman that advocated and cheered the Federal government's creation of the housing bubble as necessary to counteract the dotcom burst...
you know the housing bubble that caused this mess?
"Boni pastoris esse tondere pecus, non deglubere." It is the duty of a good shepherd to shear his sheep, not to skin them. Tiberius Caesar, (in his Bio. by Suetonius)
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We wouldn't have gone into a "depression" even if it weren't for the bullshit 'stimulus' and bailing out the banks and whatnot. It's just fearmongering by Keynesians who LOVE gov't intervention in markets. They use Keynesian theory as an excuse to expand the role of gov't and spend spend spend. Think about it. How many hardcore conservatives are Keynesians? Libertarians? Not many. Liberals use it as an excuse for their agenda. But I can see right through it.
There are a number of changes that could've prevented any 'depression' even if the banks did fail: fractional-reserve banking, FDIC guarantees of bank accounts, etc. Of course, they're not perfect, but we would've dealt with that kind of crash just fine. It's a myth to say that we would've been as bad or worse off than the Great Depression. We're still quite a way from 25% unemployment, even if you count unemployment the OLD way during Clinton.
Unfortunately FDIC didn't prevent our current crisis. In fact coverage was expanded because it was so ineffectual.
If we count unemployment like we did during the Great Depression, which included workers that had their hours cut or disgruntled workers, our unemployment rate is 17.5%.
"If we count unemployment like we did during the Great Depression"
No, No, No. That statement is wrong because the unemployment measurements of u1, u2, u3, u4, u5, and u6 did NOT exist during the great depression. If you consider the u6 unemployment rate during the great depression, it would have probably been 40%. (That is just an estimation)
You really should get out of your mental rut of labeling ideas as Liberal, Conservative, Keynesian etc. and weigh ideas on their own merit. Has years of listening to Rush Limbaugh and his ill-informed ilk completely warped your thinking? What Paul Krugman has always argued is not a socialist agenda where government controls everything, but that regulations are in place to ensure that "free market" operations driven by a desire for private gain don't come at the expense of the public good.
@jamesbrb Keynesian economics (AKA: Socialism on Demand) is a perpetual motion machine, where government spending is timed and turned on and off according to central planners. However, Keynesian spending eventually degrades into an unstable pyramid scheme that feeds stagflation
@islandmuffin Keynesian economics is an economic theory. Keynesian stimulus is an action taken by government that, according to the associated economic theory, moderates business cycles, defends private wealth, and prevents much human misery. The only "unstable pyramid schemes" in sight are the speculative bubbles that we've been prey to since we weakened FDR's financial regulation. Stagflation meanwhile began and ended with monetary policy, not fiscal policy.
Well, I don't know what the general opinion is, but I think we still haven't seen the end of this, as far as the slowdown in the economy is concerned. The Baltic Dry Index has fallen rather sharply the last few weeks, which might indicate that activity might slow late summer, beginning of autumn.
@jamesbrb "What Paul Krugman has always argued is not a socialist agenda where government controls everything, but that regulations are in place to ensure that "free market" operations driven by a desire for private gain don't come at the expense of the public good."
...soooo basically socialism in which government controls everything?
@sentryclothes Socialism is where government forcibly suspends market mechanisms, and dictates what citizens should do where for how much money. Keynesian stimulus is where government sells bonds (in financial markets to willing buyers) and uses the proceeds to purchase goods (in goods markets for willing suppliers). They look nothing like one another. The former is crazy, the latter is good government.
@Forlingas They're both bad government. We sell bonds and use the proceeds to by ipods, then our kids get the debt. Keynesians think that money circulation is the key to growth. It's not. You don't need rotating money you need productive money. I sell 10,000 bonds for x amount of dollars, then use the rest to spend hoping to trick people into thinking the economy is better. That's a bubble. We give money to corperations for free and say "hey, earnings are up now, we're doing a good job!".
@sentryclothes if the fox is garding the hen house how would regulation work anyway? there is no answer. blame the poor and weak and continue living in a fantasy
@sentryclothes no, make use of human greed and preventing it from being destruction and keeping it constructive and mutually beneficial for the rest of society.
@jamesbrb that is the biggest flaw in the argument. That business is to be there at the behest of the public to serve the public good. That is how profit is earned, by satisfying the needs of the consumer. All the government intervention into these matters has done, is create an ever increasing section of our public that can't read a consumer label, count calories, balance a checkbook and has to rely on the holy opinions of the SEC that gave Bernie Madoff two thumbs up
@jamesbrb At the beginning of 1984, Orwell says the nightmare is when workers sleep. Political positions are a spectrum, not linear, people hold contradictory ideas.
On a picket line, regular people get a sense of their political power to control the means of production democratically in common ownership, ending the bosses' shitty & destructive rat-race. coming together through solidarity for a positive agenda; That's left. Workers stirr & wake in EU, China, everywhere. The nightmare is ending.
@jamesbrb regulation and free market don't work together. You either regulate or leeave the market alone. You cannot call something free market and then regulate it. How is that free? Who is out making things to sell that people dont want? Why on earth are we demanding things that come at the expense of the public good? You see people only make what people want to buy, so your need for regulation doesn't exsist.
@jamesbrb The free market is the best way to ensure the general public is not taken advantage of, becasue again they are the ones that are being served by the likes of Wal-mart and McDonalds. People will not go to Wal-mart if they aren't providing them with what they want........ We use to have property rights, and if a busines polluted a river and that made it to your land, they werer liable. Now, we just "regulate" pollution. We are obviously doing a great job of that........
@jamesbrb Also ever been to the DMV? Notice how horrible they are run. It is becasue they have no competition. I promise you that if there were more than one able to operate, they would compete to have the fastest lines and nicest workers. As has been said for a long time, beggers can't be choosers, and by living of the government your begging for life.
@polevaultrockstr What the DMV does isn't a profitable enterprise. No sensible investor would want to run it as a business. If it's not financed by taxes, what's the alternative?
BOO to all the laissez-faire fundamentalists in the comments section. The problem is that we're not doing enough to curb the "animal spirits" and such that cause an unregulated market to overload at times.
the "unregulated market" is too regulated. don't be a communist, it's bad for your health. the only thing that needs to be regulated is the one thing that caused all of this in the first place: the federal reserve. oh, and it would hurt to regulate the over-sized government either.
Wilson and the progressives were the cause. Krugman has said nothing, knows nothing of worth, and would not have a day job if he was "in the market" and not in the insanity of UC socialist/progressive uni system. Do exactly opposite what krugman says...
The Great Depression was great because FDR was an arrogant thug who changed things and jerked investors around. Wake up people, government cannot turn us into slaves and expect us to comply...
Under FDR, it took us a decade to get out of the Great Depression. If we are returning to "Depression Economics" then hold on. It will be a wild ride.
Eve, The failure is all yours. Your "well known facts" are not facts at all. You've obviously drunk too much of the Austrian Koolaid. History shows that there are many asset bubbles which have absolutley nothing to do with government involvement in the economy. Extract your head from Peter Schiff's ass. Learn some real history about the Great Depression, FDR and the New Deal not that silly crap pimped by Neo-Hooverites like Larry Kudlow and the GOPer hacks at Faux News.
2. negative real interest rates combined with hot money and lax regulation created the last bubble. Those triple A ratings didn't come from the government, they came from private firms. I don't deny that faced with possible systemic collapse the central banks of the world backstopped irresponsible bankers, but that is not really a guarantee, it's a fight for survival.
Humans are not infallible. Nether is Krugman. Nether is the government. Nether is the individuals participating within the free market. Nether is Obama.
Of course the standard of living dropped with the bubble collapse, but I would hardly count "standard of living" before that as terrible, or an economic slowdown. Secondly, the bubble collapse was not because of some inherent fallacy in free market economics. In fact, Hong Kong, is the only real model of absolute Free Market and it hardly got hit as hard as us. It was based solely on the actions of the central bank and the actions of the fed.
The fallacies of "Reaganomics" are only purely subjective; like most econ. There is strong evidence to simply claim that, while growth rates were slower than the upper class, the upper class was growing simply because of increase in capital from the information age. It's absurd to think that people have a worse standard of living.
Oh and don't accuse me of being a Republican; I don't appreciate ad hom attacks simply because you have a red hot hatred towards a different viewpoint than you.
A general purpose technology shift such as information technology typically boosts the standard of living across the board, not a specific class of people. Kind of like electricity. Is there an argument that electricity only boosted the rich's incomes?
Reagan said supplyside economics would generate a manufacturing boom and increase real wages. It didn't happen. The Laffer curve has been proved false. Reaganomics didn't work. The evidence is in.
The facts remain that there were enough people throwing up red flags years before we reached this economic implosion. All economists have theories based on numbers excluding any human factors. The simple truth of all this is that there is not enough money on the planet to satisfy the greedy regardless of how much money is printed. Economics is a class war perpetrated by cowards pushing the poor in a corner. Keep pushing and know that you were warned to stop. Where will you hide?
Really? Because current Economics, the science, teaches us that everyone benefits from free trade and it is asinine to think that it harms some specific group. In fact, it also tells us that moving away from free trade in countries, creating isolation, will only lower their standards of living; not raise it.
Would you like to have to grow your own crops, find your own oil, make your own house, etc knowing full well that you could simply trade for those things?
When evidence refutes the model. Change the model. BTW we don't have freetrade, there are tons of tariffs and subsidies out there. We prevented free trade when we Canadian drug imports.
@derfilmmacher And then there are some things that are incredibly hard to model (mathematically), like human nature and it's impact on the workings of the economy.
@freedomthrough Marketers use statistical modelling all the time to predict human behavior. In fact, can masure changes in behavior & attitude from PR campaigns. I can give dozens of examples. Wall St makes money convincing people that markets are efficient & free when they are fraudulent and manipulated. Wall St is down 20% net from over the last 10yrs but they made record bonus pay outs. Banks declared record profits when lending was down 90%. CORRUPTION
No kidding. So many people still don't understand how easy-credit can ruin an entire society. Hell many people don't even understand how fractional central banking, and the fed, works.
Thanks Dr. Obvious. We'll get that Nobel prize in the hopper for you too. The more compelling blog would have been why credit was so easily given. Why were banks so incredibly wrong? What incentives were in place to encourage such ridiculous risk taking. Where were the gaps in regulation? How do we construct policy that doesn't constrict market but curbs such behavior? Professor Krugman's theory of international trade was really revolutionary, building on the comparative advantage theory.
I had two main points. First, Prof. Krugman is anything but a moron. The mere fact that you call him a moron displays your lack of understanding of economics. His prize was not awarded on his understanding of this subject matter. Also, second point, why banks, that function as free enterprises, were willing to lend so much. Credit is not a demon. It is a kind of lifeblood of our economy. Banks are supposed to be more versed of the risks of lending foolishly then the people borrowing foolishly.
The Federal Reserve board allowed credit to flow TOO freely for two long and it inflated a bubble.
There's no excuse for his acting surprised that bubbles followed. They keep hyping his Nobel prize in economics.
I'm not sure how you reconcile the claim that he's not a moron for being completely unaware of what the "pessimists" (real economists) predicted and your accusation that I lack understanding.
You are confused my friend. Search google for 2005 krugman bubble. You'll see an editorial written by Krugman about the pending housing bubble. He was highly critical of the greenspan ruled Fed.
And because you do not understand economics, his Nobel prize was awarded for explaining why like countries engaged in trade even when one had a distinct advantage in economics of scale. It built on comparative advantage. Worthy of a Nobel prize in its originality and usefulness.
In this video he makes the claim that no one predicted it. Is he excluding himself? Is he excluding others who know what a low discount rate and cheap credit can do?
It's not rocket science. Watch this video again. He makes it sound like it was a big surprise to everyone, including him.
So, are you claiming that he understands, economics, or not? Make up your mind.
The severity nobody predicted. What he's saying is that while everyone knew about the housing bubble, nobody knew that it popping would nearly bring down the whole financial system. The housing bubble popped and brought the economy to the brink of disaster, much like 1929. Nobody really predicted a return to the great depression. Recession, yes, depression, no.
Austrian Economists were able to make the prediction. Of course, with their deductive methods, they're usually marginalized. Mainstream economics is based on more inclusive mathematical models. It's a pity the two can't meet somewhere in the center.
It's true. There are some very important points in Austrian economics. Like politics however, the ideologues got a hold of it. Just like liberals like to call on Keynes 24/7, many conservatives use it to reject the government. I like to see virtues in both policies. The problem with strict Austrian economics is it ignores the human cost of capitalism. Modern economics marginalizes the efficient investment and moral hazard/waste that government investment can make.
And not all of this fall can be attributed to the fed. Yes, they held rates too low and encouraged investors to find other places for their money, besides T bonds. Money flowed into mortgage backed securities. But even rational banks over invested. Because of incentives linked to short term results, banks were susceptible to excessive risk taking. There was a private market failure, on the same scale as the great depression, when the Fed had little discretion, and we had a gold standard.
It's true, natural bubbles do occur, from time to time, in an economy. You don't need the Fed to explain all of them.
There is also a natural means by which entities can be prevented from taking excessive risks. The fact that the government even HAS the power to help these companies avoid bankruptcy skews the risk assessment even further.
I agree with you. But in this case, the consequence was too dire. Although we'll never know what would have happened if we had just let finance collapse, when Lehman collapsed we got a taste. It was pretty awful. Even though our economy is still performing pretty poorly by most standards, it could have been worse. In another 20 years, would we have a stronger economy with this collapse? It's quite possible, and probable. But as one famous economist put it, "in the long run we're all dead."
Bush and the Republicans have wrecked the economy and Krugman saw it all coming years in advance. Krugman, a a Nobel Prize winning economist recognizes the abject idiocy of Reaganomics.
It is not necessarily Reaganomics he is criticizing. He is criticizing the malpractice created by the fed - which yes was in the hands of George W. Bush. However why would you blame free market policies for the troubles we are currently in, that would be illogical.
Uh, have you read any of Krugman's work? He was among the first economists to call bullshit on trickle down Reaganomics. Krugman recognizes the reality of market failure and the dangers of unregulated markets. He predicted the current economic collapse when you Republicans were still crowing about the "Bush Boom"
Krugman is wrong. History proves it. FDR only made the depression worse with the same programs Krugman has recommended and lauded. Likewise with the Japanese who tried his method and lost a decade to economic downturn as a result. Also, Krugman said this in 2002:
"To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create..." End pt.1
Pt.2 "...a housing bubble to replace the Nasdaq bubble. So a couple of years before the collapse, Krugman recommended the very thing that, by artificially driving up home prices with seemingly no end in sight, encouraged exorbitant home purchases, encouraged reckless lending, reckless borrowing, reckless securities based on reckless lending and borrowing--caused the collapse itself (albeit thru the Fed). On the other hand, Austrian economists saw the collapse and every other one in US history.
Have you actually read anything that Hayek or the Austrians wrote before and after the Depression? Your silly statement that FDR "made the depression worse" is just Faux News nonsense and is contradicted by everyone from Keynes to Friedman. The housing bubble was the result of weak to nonexistent regulation of the banks by the Republicans who controlled the entire government from 2001 to 2007. Same thing happened in the 1980s under Reagan when the saving & loans collapsed..
You've assumed a number of things here. 1st, you've assumed that I don't know what I'm talking about just because I have a different opinion. I'm well read in economics, thank you and the Austrians are the right ones. You also assume that I'm a W supporter and a Fox News junkie. I'm actually a libertarian anarchist who rejects electoral politics. I don't agree with democrats or republicans or even the libertarian party, so... Let's move on to the nitty gritty. End pt. 1
Pt.2 1st, Friedman--from what I've read--wrote in both Free to Choose and A Monetary History of the United States, 18671960 that the Fed was responsible for the Depression and he highlighted many reasons why FDR was at fault for prolonging it: tax and tariff increases, price controls, burning crops to "help" farmers, public works programs that removed thousands of workers from the labor market, etc. What book of Friedman's did you get your info from? End pt.2
Go back and read your own post. You claimed that "FDR only made the depression worse". That's simply not true. Look at what happened to GDP from 1932 to 1934. FDRs policies weren't all good but they made a huge difference. And Krugman has never advocated price controls or destroying agricultural surpluses. He never advocated a housing bubble either. Krugman warned years in advance about the dangers to the banking system from lax regulation.
If Krugman never advocated a bubble, explain my cited quote. Did I just make it up? Also, teh Depression GDP is misleading for a number of factors. 1st, the government controlled the prices and therefore the resource worth is skewed. Second, the GDP included government spending. The massive public works outlays are hardly the same as an indication of true economic output. Most of those shovel leaner jobs never produced a buyable product.
Pt.3 Also, there was a UCLA study done that proved FDR prolonged the depression. Google it-UCLA FDR Depression.
And you can't blame this on partisan politics 'cause UCLA is NOT exactly a conservative school. I agree that the republicans under W had a lot to w/ the downturn, but not b/c of deregulation. Show me a study that proves such and I can shoot it down. There's a great book called Meltdown that explains the crash, but I'll give you a...
Pt.4...quick rundown of it all. The Austrian Theory of the business cycle explains everything. Hayek came up w. it. Really, if you read this one page article by the author of the book--he'll explain it better than I can and he has more room. This multiple part answer's killin' me. So go here and read it w/ an open mind. Then get back to me...
It won't let me post an address in here so I'm gonna email it to you.
The Austrian school is based on laissez-faire economic principals. That is what Greenspan advocated and why the shadow banking system was allowed to develop. It failed in September 2008. We know that bankers couldn't self-regulate.
Medical research and health insurance also have distorted outcomes because of how the market functions.
Regulation is a necessary part of life for companies, just like traffice regulations are a necessary part of driving.
Laissez-faire has not caused the problems that we are in. I find it ironic that a president of the FED could be considered be from the Austrian School of economics. Austrian economics is against the existence of the FED. What has caused these problems is expansion of credit through low interest rates. This has cause a distortion and malinvestment in the economy. Alan Greenspan had advocated low interest rates for many years. We were NOT following laissez-faire economic principals.
There are other studies that have proven the same point, namely that spending money to get out of debt always fails. 2nd, Greenspan is NOT an advocate of the free market. He wrote on the importance of gold-backed currency when he was younger, but he abandoned those worthwhile ideas to enter into Keynesian inanity by heading up the Fed--an institution that is diametrically opposed to austrian economic princiPLES. It's not about bankers self-regulating. That didn't cause the problem. End pt.1
Pt2 It's self-regulation that would have been the market's savior by making the crisis moot. See, the Fed controls the $ supply and the interest rate and when it is artificially lowered it causes a false boom which is always followed by economic downturns. This is gov't regulation b/c the gov't colludes w/ the fed. If individual banks could decide for themselves what rates to lend at, they would lend at rates that would curb debt b/c they won't lend $ to ppl who couldn't pay. The gov't did that.
Right. So your saying that if you took all of the traffic cops off of the road, I would not speed for fear of car accidents? Banks were like stupid invincible adolescents, thinking they were impervious to the ridiculous risks they were taking. Even when 2 teenagers were killed, they doubled down on bad debt. The fed has given society a powerful tool to ease the pain. Oh all of the government side shows, why so much angst towards the rather neutral independent one?
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Wages in the US have been exploding for decades. Economists don't measure the gains from product improvement. This video shows a simple equation that will win the debate for Friedman. Just ask 2 simple questions. What is quality? What is convenience? One equation can explain it all. youtube.com/watch?v=2c4mvGekYZY
IlirMr 2 weeks ago
Although the fed has lowered interest rates on the money banks borrow, the banks increased interest rates on consumer debt. Would it not be a faster recovery if we limited interest rates on consumer debt (usury Laws) instead of creating gov debt because of over spending by the gov?
Thewizzardof9 2 months ago
If he is so smart, why won´t he debate Peter Schiff?? Come on Paul, earn that nobel prize!!
MILMAG1 2 months ago
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Please note that my book Keynes Hayek: The Clash That Shaped Modern Economics is published by W.W.Norton in October.
Professor John B.Taylor says that: “Nicholas Wapshott brings the Keynes-Hayek fight of the 20th century back to life, making the clash both entertaining and highly relevant for understanding economic crises of the 21st century.”
Read an extract at: sites.google.com/site/wapshottkeyneshayek/
Nicholas Wapshott
nhwapshott 8 months ago
It's not depression economics, where in a Hoodoo economy,,,,google HoodooNomics it's all there..
hoodooeconomist80 9 months ago
@csgwee That is the point, government can print money to have more money; households cannot. If the economy goes down, unemployment rises, private borrowing increases at unsustainable interest rates, buying goes down, businesses face failures, unemployment compensation rises, government spends newly created money, new money goes to spenders, spending rises, people get jobs, production increases, unemployment comp declines, more taxes increase government income, the cycle rebounds.
JoanDenoo 10 months ago
HE IS YELLING INTO THE MIC
nooch1213 10 months ago
That's right, You don't know what the problem is. Well here you go. The problem is:
"Death by Technology"
You can thank me later....
searching68 10 months ago
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this guy won a nobel prize??????
diamondknife 1 year ago
Horrible speaker, says cant predict economy, shows a graph with economy recovering but says he doesn't know the reason behind it, makes horrible jokes.... perfect guy for noble prize...
fixedbin 1 year ago
Paul Krugman NY Times 2002
"To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
LexPhilogus 1 year ago
@csgwee
you can, with a nissan!
cay311 1 year ago
@cay311 But.... All you really need is a Datsun.
warplysmith 1 year ago
@cay311
But..All you really need, is a Datsun.
warplysmith 1 year ago
@cay311
But....All you really need is a Datsun.
warplysmith 1 year ago
Sorry, Krugman is as full of shit as a Christmas turkey.
pretorious700 1 year ago
@pretorious700 You fill your turkey with shit? I find this seriously disturbing.
PaxNot 1 year ago
@pretorious700 DUDE what kind of Christmas turkey do u eat?
MyDERPMAN 1 year ago
While I don't agree with Krugman on many points, I am willing to accept his argument as having validity without necessarily being correct. However, I did find it very concerning when he began discussing the twisting of authority to allow the seizure of private institutions. Power is not a tool granted lightly and it should never be abused to gain more power, no matter how supposedly righteous the cause.
classicrockforever5 1 year ago
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The Y = C + I + G +NX should be re-written to reflect reality.
Y = C + (1.10) I + (-0.8) G and leave off the NX.
The coefficient in from of government and investment changed as the country's need for capital and the % of GDP consumption by government changes. Wouldn't it be nice if the Keynesian employed at the Federal Reserve put their minds to use figuring out the exact negative affect government spending has on the economy?
I am not going to hold my breath.
Truthpolice9698 1 year ago
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The Y = C + I + G +NX should be re-written to reflect reality.
Y = C + (1.10) I + (-0.8) G and leave off the NX.
The coefficient in from of government and investment changed as the country's need for capital and the % of GDP consumption by government changes. Wouldn't it be nice if the Keynesian employed at the Federal Reserve put their minds to use figuring out the exact negative affect government spending has on the economy?
I am not going to hold my breath.
Truthpolice9698 1 year ago
Krugman has figured out the business model that being smart and taking an extreme stance, whether left (him) or right, is incredibly rewarding from a monetary stand point. I'm quite sure he will retire a rich elitest and all the more power to him even though I don't always agree with him.
kdogg132 1 year ago
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PrepareForChaos 1 year ago
if people are wanna be smartasses and do the libertarian talk "oh you liberal keynesians you spend recklessly and roll up the deficit" pause for a sec.
firstly, keynes HIMSELF was opposed to deficit spending! go read a book or google it for a change.
secondly, not a single bill that deals with economics/finance these days passes congress without approval from big business! corporations WANTED the stimulus cos it meant free money for them. yes capitalism wants & needs a big nanny state.
dontliethetruth 1 year ago
@dontliethetruth I really don't want to get into a real debate about the Libertarian positions, but I feel it necessary to point out that the idea that Libertarians blindly support the big corporations is a common misconception. On the contrary, we would oppose their will in situations like the fight over the stimulus bill.
classicrockforever5 1 year ago
This is a single simple fact what 80% of this country do realize.
>> capitalism is better than communism: equality should be put before liberty.
This is a single simple fact what 80% of this country do not realize.
>> Government intervention is required. We have solid proofs including 1930 depression. The question is, what type of intervention at what type of situation.
rainzoro 1 year ago
Nobel prize??? base on what? He could not even foreseen this financial crisis we in like Peter schiff did! If he is that good, why cant he come up with a solution for this crisis?
TheBigdick888 1 year ago
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@TheBigdick888 stupidity at its best
rainzoro 1 year ago
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why does anyone listen to this dolt?
pretorious700 1 year ago
Stimulus makes no long term sense. Money does not create real wealth, rather capital investment and production does. Look at Japans failed stimulus packages! Unfortunately, Krugman uses the cover that had the stimulus not been implemented, then the situation would be worse, ie depression. Krugman and Keynes have lost nearly all credibility, if they had any...
AussieAustrianBlog 1 year ago
It sounds like he is being broadcast over an intercom in Team Fortress 2.
speedgraphic 1 year ago
I know how to get out of a global recession. Invest in innovation and R&D, simple
Seano71 1 year ago
@Seano71 "Invest in innovation and R & D"... How do you suggest people invest in innovation and R&D do if people are broke. Do you honestly think that the federal government has the God-like power to know what the public demands?
sentryclothes 1 year ago
@sentryclothes stimulus, einstein
Seano71 1 year ago
@Seano71 So you propose creating money (a.k.a. inflating the money supply). Where/to whom would the money go? Which companies? Let's say we give stimulus to "Green"-tech companies. What if the public rejects the products developed by these companies? I argue that the LAST thing we need is more stimulus. The recession we are experiencing is a painful but necessary cycle of the "free"-market. Trying to avoid the recession is just delaying the inevitable.
sentryclothes 1 year ago
@sentryclothes where do I start? Its not inflating the money supply, its replacing the money banks are hoarding. It would create jobs, cut down the effects of global warming. You understand cap and trade? The whole idea is to get companies to become more environmentally friendly and to allow clean technology a chance to be competitive against fossil fuels. What gives true economic growth is increased output capacity and technological innovation, as well as demand which is key.
Seano71 1 year ago
@Seano71 Refer Japan regarding replacing money/stimulus....doesn't work. Just makes things worse. And i'm not going to reply to cap and trade - global warming is a non issue. A proven fraud. It's political.
AussieAustrianBlog 1 year ago
@Seano71 Keep drinking the stimulus kool aid. Capital savings are required, not consumption. Then we will have more r&d etc. Time and time again throughout history stimulus fails. It provides some nominal improvement in various figures and only makes things worse in the long term.
AussieAustrianBlog 1 year ago
AHH AHHH UMMM! AAAH AHHHAH AHAHAHA!!! AHH I'mmmmm cummmiinnnnnggg!!!!!
polutc 1 year ago
i want an hour of my life back and to bludgen this man to death with any supposed "award" he got for economics.
ekeyra 1 year ago
Listening to this guy is disturbing.
Is he speaking in tongues?????
xantipathebest 1 year ago
Why would anyone listen to this idiot?! He's the one whose policies have caused the depression and irreversibly destroyed the American economy. He should be shot, not listened to even more!!!
karlkarlkarl1234 1 year ago
@karlkarlkarl1234 WTF are you talking about? Republican policies caused the first Great Depression. FDR used Keynesian policy to get us out of the problems caused by the Republican policy of transferring the wealth up to the wealthy. Sound familiar? Prettty much every economic disaster since the 1900's have been caused by greedy and short-sighted corporations with the blessing of the corporate owned politicians, mostly Republicans, but with plenty of Democrats that sold out also
lisabob22 1 year ago
@lisabob22
If you still believe in the political dichotomy of Republicans vs. Democrats and can't see it for the sham stage-show that it is, you are as dumb & blind as I think you are.
karlkarlkarl1234 1 year ago
@karlkarlkarl1234 no, your just an alex jones parrot
Seano71 1 year ago
@Seano71
I don't like Alex Jones.
All I have to say is that if you still support Paul Krugman after his policies have destroyed America completely and put it on its knees and looks like it is not going to ever recover and most likely die, well then you are as stupid as I know you are.
Anyone who advocates giving tax payer handouts to banks so their executives can pocket hundreds of billions in bonuses for losing trillions of dollars, and expect that to fix the economy is a flaming retard.
karlkarlkarl1234 1 year ago
@karlkarlkarl1234 no, my view is similar to niall ferguson's and roubini's.
Seano71 1 year ago
Study finds Paul Krugman is the most partisan economist. Krugman was the only economist to "significantly" change his stances for partisan reasons. Krugman has even gone so far as to contradict his own findings to bash Republican politicians. - Brett Barkley, Econ Journal Watch, May 2010
islandmuffin 1 year ago
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@islandmuffin The peer-reviewed research was published in May 2010 issue of the Econ Journal Watch (EJW), edited by Daniel B. Klein.
Seven Nobel laureates are members of the EJW Advisory Council.
islandmuffin 1 year ago
It says in the byline that Paul Krugman is a Nobel prize winner in Economics of 2008. That is interesting since there is no such thing. It's a prize that is given by the Swedish Central bank.
denderon1 1 year ago
@denderon1 hahahaha
xantipathebest 1 year ago
Is this a second Great Depression? It's going to be worse than the first one. We're going to have to default and we'll see a currency crises. I can fathom no way that we can avoid this. I just hope the government doesn't try to blame it on the free market and grab more power from us and promise to protect us from the very problems it caused. That's my fear though.
razerfish 1 year ago
what an arrogant moron
Sivels 1 year ago
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Isnt it interesting .... 1930s .... depression .... upheaval in Germany - inflation .... Zionism. 2008 - 2010 = economic worries again .... upheavals in United States and Europe ... ZIONISM ... KEY WORD = ZIONISM .... Greenspan = jew?? ... Responsible for false credit and lending .... responsible for banking irresponisbility ???? Again ZIONISM is to blame. Film and music industry dominated by jews. Film and music responsible for todays "sick" culture?? AGAIN ... ZIONISM is to blame !!
sebbbo77 2 years ago
Going back to Keynesianism (Depression economics) is like telling NASA to abandon Newton's Laws of motion and only consider Aristotle's theory on perpetual motion when it comes to launching spacecraft.
Keynesian theory was discredited academically in the sixties with models showing it lead to stagflation. The 2000s and the seventies later show that the same occurs in practice.
Krugman want to bring back the old.
mongoose704 2 years ago
I think this basically proves Peter Schiff was right.
Krugman: "We did everything right, but everything went to hell anyway, weird."
Peter Schiff: "They're doing everything wrong and its all going to go to hell."
You tell me who knows what the hell is going on.
bobdole57 2 years ago
Krugman's so called predictions of this collapse were simply ripped off of Schiff and the Austrians. The Austrians were fr more specific of the collapse, predicting the actual fall of Bear Stearns
mongoose704 2 years ago
If Krugman knew what he was doing, if Bernanke knew what he was doing, according to them this never would have happened.
So by their own admission, they don't have a goddamn clue.
bobdole57 2 years ago
arrrrggggg
Why are the idiots in charge of the collapse of Western civilization put in charge of preventing it? Why does no one is 'government' even consider that Marc Faber, Peter Schiff or that other guy might be more equipped for the jobs at hand?
What a joke the system is.
bobdole57 2 years ago
"Why are the idiots in charge of the collapse of Western civilization put in charge of preventing it? "
Indeed. Outside of the idiocy in government and bureaucracy, the man who argued that species adapt rather than change through the reproduction and natural selection is discredited and no longer consulted upon as an expert or for guidance.
The man that led us into 2 unjust, illegal wars is someone we no longer trust
But this is government we're talking about.
mongoose704 2 years ago
The most insane aspect of the crisis is the government insisting on putting those that caused the crisis in charge of resolving it...
political favors.
mongoose704 2 years ago
@mongoose704 its not insane, there is a bill moyers interview with william k black. examining this. if you were to put a new ceo or new personel in charge the first thing they would do is see what happened. The big fear is how bad the whole thing is. no one wants to know, so there not gonna put someone in place to figure it out.
juhahn 1 year ago
@juhahn heh!
mongoose704 1 year ago
The same Paul Krugman that advocated a record exapansion of government through monetary and debt creation and stimulus packages? The same Paul Krugman that is now advocating the creation of a government and bond bubble as necessary to stave off the burst housing bubble he supported? A bubble that could potentially end the dollar and have disasterous global ramifications?
Yeah we need more Krugmans who say let's solve a debt crisis with by creating record debt.
mongoose704 2 years ago
Yeah what we need instead is...what?
superman066 2 years ago
I'd like to hear economists of the Austrian school who are gaining credibility as this current crisis unfolds.
Forget supply siders.
mongoose704 2 years ago
@mongoose704 Fuck yeah
Supply siders are retards
All keynsians want to do is Tax and Spend
Supply siders want to Cut taxes and triple spending
Austrians are the only ones who actually make sense in their theories
wannabestudd 2 years ago
Right on.
Keynesians (demand siders) want welfare for consumption
Supply Siders want corporate welfare
Austrian Theorists want to let the market work without government intervention,
mongoose704 2 years ago
Mine was not a poor comment at all. In fact one of the best here.
Do you want the facts showing Krugman was all for the government creating a housing bubble? In fact he even alludes to the fact he did in THIS VIDEO! Do you need proof that he is for the current creation of a goverrnment bubble today and is for this current massive expansion of debt and deficits and devaluation of the dollar that will lead to an even worse collapse in the future?
mongoose704 2 years ago
yes that same Krugman. He is Keynes' successor, and he is exactly what we need.
vlgagic 2 years ago
So we need more Krugmans, more people that ruined our economy.
Keynes was discredited in the seventies. It's called stagflation or worse yet (and we will see this) inflationary depression.
mongoose704 2 years ago
He is a hack who supports every reckless policy that caused the crisis.
mongoose704 2 years ago
yeah we need more Krugmans, you know, the Paul Krugman that advocated and cheered the Federal government's creation of the housing bubble as necessary to counteract the dotcom burst...
you know the housing bubble that caused this mess?
mongoose704 2 years ago
And yes, we need even fewer Friedmans and phony free market economists.
mongoose704 2 years ago
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excellent work!
1888junkteam 2 years ago
"Boni pastoris esse tondere pecus, non deglubere." It is the duty of a good shepherd to shear his sheep, not to skin them. Tiberius Caesar, (in his Bio. by Suetonius)
mose3 2 years ago
Hi Paul, you got it right again. We need more Krugmans and fewer Friedmans. Adios, amigos.
drjimbarnes 2 years ago
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We wouldn't have gone into a "depression" even if it weren't for the bullshit 'stimulus' and bailing out the banks and whatnot. It's just fearmongering by Keynesians who LOVE gov't intervention in markets. They use Keynesian theory as an excuse to expand the role of gov't and spend spend spend. Think about it. How many hardcore conservatives are Keynesians? Libertarians? Not many. Liberals use it as an excuse for their agenda. But I can see right through it.
whoo689 2 years ago
There are a number of changes that could've prevented any 'depression' even if the banks did fail: fractional-reserve banking, FDIC guarantees of bank accounts, etc. Of course, they're not perfect, but we would've dealt with that kind of crash just fine. It's a myth to say that we would've been as bad or worse off than the Great Depression. We're still quite a way from 25% unemployment, even if you count unemployment the OLD way during Clinton.
whoo689 2 years ago
Unfortunately FDIC didn't prevent our current crisis. In fact coverage was expanded because it was so ineffectual.
If we count unemployment like we did during the Great Depression, which included workers that had their hours cut or disgruntled workers, our unemployment rate is 17.5%.
mongoose704 2 years ago
"If we count unemployment like we did during the Great Depression"
No, No, No. That statement is wrong because the unemployment measurements of u1, u2, u3, u4, u5, and u6 did NOT exist during the great depression. If you consider the u6 unemployment rate during the great depression, it would have probably been 40%. (That is just an estimation)
TaffyAlpha 2 years ago
You really should get out of your mental rut of labeling ideas as Liberal, Conservative, Keynesian etc. and weigh ideas on their own merit. Has years of listening to Rush Limbaugh and his ill-informed ilk completely warped your thinking? What Paul Krugman has always argued is not a socialist agenda where government controls everything, but that regulations are in place to ensure that "free market" operations driven by a desire for private gain don't come at the expense of the public good.
jamesbrb 2 years ago 32
@jamesbrb Keynesian economics (AKA: Socialism on Demand) is a perpetual motion machine, where government spending is timed and turned on and off according to central planners. However, Keynesian spending eventually degrades into an unstable pyramid scheme that feeds stagflation
islandmuffin 1 year ago
@islandmuffin Keynesian economics is an economic theory. Keynesian stimulus is an action taken by government that, according to the associated economic theory, moderates business cycles, defends private wealth, and prevents much human misery. The only "unstable pyramid schemes" in sight are the speculative bubbles that we've been prey to since we weakened FDR's financial regulation. Stagflation meanwhile began and ended with monetary policy, not fiscal policy.
Forlingas 1 year ago
Well, I don't know what the general opinion is, but I think we still haven't seen the end of this, as far as the slowdown in the economy is concerned. The Baltic Dry Index has fallen rather sharply the last few weeks, which might indicate that activity might slow late summer, beginning of autumn.
denderon1 1 year ago
@jamesbrb "What Paul Krugman has always argued is not a socialist agenda where government controls everything, but that regulations are in place to ensure that "free market" operations driven by a desire for private gain don't come at the expense of the public good."
...soooo basically socialism in which government controls everything?
sentryclothes 1 year ago
@sentryclothes Socialism is where government forcibly suspends market mechanisms, and dictates what citizens should do where for how much money. Keynesian stimulus is where government sells bonds (in financial markets to willing buyers) and uses the proceeds to purchase goods (in goods markets for willing suppliers). They look nothing like one another. The former is crazy, the latter is good government.
Forlingas 1 year ago
@Forlingas They're both bad government. We sell bonds and use the proceeds to by ipods, then our kids get the debt. Keynesians think that money circulation is the key to growth. It's not. You don't need rotating money you need productive money. I sell 10,000 bonds for x amount of dollars, then use the rest to spend hoping to trick people into thinking the economy is better. That's a bubble. We give money to corperations for free and say "hey, earnings are up now, we're doing a good job!".
samqueler 1 year ago
@sentryclothes if the fox is garding the hen house how would regulation work anyway? there is no answer. blame the poor and weak and continue living in a fantasy
REAL88E 1 year ago
@sentryclothes no, make use of human greed and preventing it from being destruction and keeping it constructive and mutually beneficial for the rest of society.
Seano71 1 year ago
@jamesbrb that is the biggest flaw in the argument. That business is to be there at the behest of the public to serve the public good. That is how profit is earned, by satisfying the needs of the consumer. All the government intervention into these matters has done, is create an ever increasing section of our public that can't read a consumer label, count calories, balance a checkbook and has to rely on the holy opinions of the SEC that gave Bernie Madoff two thumbs up
soliloqy 1 year ago
@jamesbrb You speak the truth. It's not about label vs label, but logic vs logic.
rainzoro 1 year ago
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kdogg132 1 year ago
@jamesbrb At the beginning of 1984, Orwell says the nightmare is when workers sleep. Political positions are a spectrum, not linear, people hold contradictory ideas.
On a picket line, regular people get a sense of their political power to control the means of production democratically in common ownership, ending the bosses' shitty & destructive rat-race. coming together through solidarity for a positive agenda; That's left. Workers stirr & wake in EU, China, everywhere. The nightmare is ending.
marsCubed 1 year ago
@jamesbrb Very good!
gorgorybmus 8 months ago
@jamesbrb regulation and free market don't work together. You either regulate or leeave the market alone. You cannot call something free market and then regulate it. How is that free? Who is out making things to sell that people dont want? Why on earth are we demanding things that come at the expense of the public good? You see people only make what people want to buy, so your need for regulation doesn't exsist.
polevaultrockstr 8 months ago
@jamesbrb The free market is the best way to ensure the general public is not taken advantage of, becasue again they are the ones that are being served by the likes of Wal-mart and McDonalds. People will not go to Wal-mart if they aren't providing them with what they want........ We use to have property rights, and if a busines polluted a river and that made it to your land, they werer liable. Now, we just "regulate" pollution. We are obviously doing a great job of that........
polevaultrockstr 8 months ago
@jamesbrb Also ever been to the DMV? Notice how horrible they are run. It is becasue they have no competition. I promise you that if there were more than one able to operate, they would compete to have the fastest lines and nicest workers. As has been said for a long time, beggers can't be choosers, and by living of the government your begging for life.
polevaultrockstr 8 months ago
@polevaultrockstr What the DMV does isn't a profitable enterprise. No sensible investor would want to run it as a business. If it's not financed by taxes, what's the alternative?
ragp1cker 6 months ago
@ragp1cker most dmv's in the US are self sustaining and take zero to little tax money.
afadeyi 6 months ago
@afadeyi Didn't know that. Thanks.
ragp1cker 6 months ago
i did not do it in the pontiac michigan because i respect my sport, but i never respect the gay. i never respect the fag!
Berialavrenti 2 years ago
Dear Ben Bernanke,
Sorry doesn't cut.
Sincerely,
The Working Class
Antiks72 2 years ago 2
22:11 is the best comic I've seen in a while.
BOO to all the laissez-faire fundamentalists in the comments section. The problem is that we're not doing enough to curb the "animal spirits" and such that cause an unregulated market to overload at times.
ComradeSephiroth 2 years ago
the "unregulated market" is too regulated. don't be a communist, it's bad for your health. the only thing that needs to be regulated is the one thing that caused all of this in the first place: the federal reserve. oh, and it would hurt to regulate the over-sized government either.
strapt313 2 years ago
Wilson and the progressives were the cause. Krugman has said nothing, knows nothing of worth, and would not have a day job if he was "in the market" and not in the insanity of UC socialist/progressive uni system. Do exactly opposite what krugman says...
seaplaneguy1 2 years ago
The Great Depression was great because FDR was an arrogant thug who changed things and jerked investors around. Wake up people, government cannot turn us into slaves and expect us to comply...
seaplaneguy1 2 years ago
Under FDR, it took us a decade to get out of the Great Depression. If we are returning to "Depression Economics" then hold on. It will be a wild ride.
Americaisgreat123 2 years ago
Paul Krugman is such a stupid mother fucker...
themagus187 2 years ago
Eve, The failure is all yours. Your "well known facts" are not facts at all. You've obviously drunk too much of the Austrian Koolaid. History shows that there are many asset bubbles which have absolutley nothing to do with government involvement in the economy. Extract your head from Peter Schiff's ass. Learn some real history about the Great Depression, FDR and the New Deal not that silly crap pimped by Neo-Hooverites like Larry Kudlow and the GOPer hacks at Faux News.
AtlasShruggery 2 years ago
AtlasShruggery, you fail on a few now well known facts:
1. Governments pimp all statistics to their own will. Most investors only have these statistics to go by.
2. It is government guarantees and low interest rates that fueled all the bubbles and 'rigged' the economy.
Combined these lead to markets doing stupid investments, which otherwise do not occur because people want to avoid risk when lending out.
FDR did his share of rigging, causing markets to malfunction and this slowed recovery.
TheEVEInspiration 2 years ago
Invesment firms have their own economists.
2. negative real interest rates combined with hot money and lax regulation created the last bubble. Those triple A ratings didn't come from the government, they came from private firms. I don't deny that faced with possible systemic collapse the central banks of the world backstopped irresponsible bankers, but that is not really a guarantee, it's a fight for survival.
derfilmmacher 2 years ago
These are very insightful comments, derfilmmacher.
AtlasShruggery 2 years ago
Thanks. Too many folks don't understand the situation.
derfilmmacher 2 years ago
The triple A ratings came from private firms with government sponsored monopolies.
webo217 2 years ago
Humans are not infallible. Nether is Krugman. Nether is the government. Nether is the individuals participating within the free market. Nether is Obama.
Offatwork 2 years ago
"nether" is your spelling.
scweb007 2 years ago 4
Of course the standard of living dropped with the bubble collapse, but I would hardly count "standard of living" before that as terrible, or an economic slowdown. Secondly, the bubble collapse was not because of some inherent fallacy in free market economics. In fact, Hong Kong, is the only real model of absolute Free Market and it hardly got hit as hard as us. It was based solely on the actions of the central bank and the actions of the fed.
Offatwork 2 years ago
The fallacies of "Reaganomics" are only purely subjective; like most econ. There is strong evidence to simply claim that, while growth rates were slower than the upper class, the upper class was growing simply because of increase in capital from the information age. It's absurd to think that people have a worse standard of living.
Oh and don't accuse me of being a Republican; I don't appreciate ad hom attacks simply because you have a red hot hatred towards a different viewpoint than you.
Offatwork 2 years ago
A general purpose technology shift such as information technology typically boosts the standard of living across the board, not a specific class of people. Kind of like electricity. Is there an argument that electricity only boosted the rich's incomes?
jpalozie1 2 years ago
Reagan said supplyside economics would generate a manufacturing boom and increase real wages. It didn't happen. The Laffer curve has been proved false. Reaganomics didn't work. The evidence is in.
derfilmmacher 2 years ago 2
" Reagan said supplyside economics would generate a manufacturing boom and increase real wages. "
Free trade did - in China and India.
tigerone1970 2 years ago
The facts remain that there were enough people throwing up red flags years before we reached this economic implosion. All economists have theories based on numbers excluding any human factors. The simple truth of all this is that there is not enough money on the planet to satisfy the greedy regardless of how much money is printed. Economics is a class war perpetrated by cowards pushing the poor in a corner. Keep pushing and know that you were warned to stop. Where will you hide?
brcmasters 2 years ago
Really? Because current Economics, the science, teaches us that everyone benefits from free trade and it is asinine to think that it harms some specific group. In fact, it also tells us that moving away from free trade in countries, creating isolation, will only lower their standards of living; not raise it.
Would you like to have to grow your own crops, find your own oil, make your own house, etc knowing full well that you could simply trade for those things?
Offatwork 2 years ago
Where wil you hide?
brcmasters 2 years ago
When evidence refutes the model. Change the model. BTW we don't have freetrade, there are tons of tariffs and subsidies out there. We prevented free trade when we Canadian drug imports.
derfilmmacher 2 years ago 5
@derfilmmacher And then there are some things that are incredibly hard to model (mathematically), like human nature and it's impact on the workings of the economy.
freedomthrough 7 months ago
@freedomthrough Marketers use statistical modelling all the time to predict human behavior. In fact, can masure changes in behavior & attitude from PR campaigns. I can give dozens of examples. Wall St makes money convincing people that markets are efficient & free when they are fraudulent and manipulated. Wall St is down 20% net from over the last 10yrs but they made record bonus pay outs. Banks declared record profits when lending was down 90%. CORRUPTION
derfilmmacher 3 months ago
This is a "malfunction"? I can't believe this moron managed to get a Nobel Prize.
Even without all of his economic "expertise" I wrote a blog about the "credit-rating myth" 5 years ago that predicted this.
People spent themselves into oblivion, because they couldn't buy anything without a credit rating.
C'mon! You don't have to be a rocket scientist to see where putting yourself into debt, simply to be ABLE to make a big purchase will end.
caltrop69 2 years ago
No kidding. So many people still don't understand how easy-credit can ruin an entire society. Hell many people don't even understand how fractional central banking, and the fed, works.
Offatwork 2 years ago
Thanks Dr. Obvious. We'll get that Nobel prize in the hopper for you too. The more compelling blog would have been why credit was so easily given. Why were banks so incredibly wrong? What incentives were in place to encourage such ridiculous risk taking. Where were the gaps in regulation? How do we construct policy that doesn't constrict market but curbs such behavior? Professor Krugman's theory of international trade was really revolutionary, building on the comparative advantage theory.
jpalozie1 2 years ago
It absolutely would have been more compelling.
I, however, am not an economist.
The question is, if a simple lay person can point out the problems in a system, why can't the expert figure it out?
I'd also like to point out that, other than an ad hominem, you've done nothing to make a point.
webo217 2 years ago
I had two main points. First, Prof. Krugman is anything but a moron. The mere fact that you call him a moron displays your lack of understanding of economics. His prize was not awarded on his understanding of this subject matter. Also, second point, why banks, that function as free enterprises, were willing to lend so much. Credit is not a demon. It is a kind of lifeblood of our economy. Banks are supposed to be more versed of the risks of lending foolishly then the people borrowing foolishly.
jpalozie1 2 years ago
The Federal Reserve board allowed credit to flow TOO freely for two long and it inflated a bubble.
There's no excuse for his acting surprised that bubbles followed. They keep hyping his Nobel prize in economics.
I'm not sure how you reconcile the claim that he's not a moron for being completely unaware of what the "pessimists" (real economists) predicted and your accusation that I lack understanding.
You contradict yourself. You're confused.
caltrop69 2 years ago
You are confused my friend. Search google for 2005 krugman bubble. You'll see an editorial written by Krugman about the pending housing bubble. He was highly critical of the greenspan ruled Fed.
And because you do not understand economics, his Nobel prize was awarded for explaining why like countries engaged in trade even when one had a distinct advantage in economics of scale. It built on comparative advantage. Worthy of a Nobel prize in its originality and usefulness.
jpalozie1 2 years ago
In this video he makes the claim that no one predicted it. Is he excluding himself? Is he excluding others who know what a low discount rate and cheap credit can do?
It's not rocket science. Watch this video again. He makes it sound like it was a big surprise to everyone, including him.
So, are you claiming that he understands, economics, or not? Make up your mind.
caltrop69 2 years ago
The severity nobody predicted. What he's saying is that while everyone knew about the housing bubble, nobody knew that it popping would nearly bring down the whole financial system. The housing bubble popped and brought the economy to the brink of disaster, much like 1929. Nobody really predicted a return to the great depression. Recession, yes, depression, no.
jpalozie1 2 years ago
Austrian Economists were able to make the prediction. Of course, with their deductive methods, they're usually marginalized. Mainstream economics is based on more inclusive mathematical models. It's a pity the two can't meet somewhere in the center.
caltrop69 2 years ago
It's true. There are some very important points in Austrian economics. Like politics however, the ideologues got a hold of it. Just like liberals like to call on Keynes 24/7, many conservatives use it to reject the government. I like to see virtues in both policies. The problem with strict Austrian economics is it ignores the human cost of capitalism. Modern economics marginalizes the efficient investment and moral hazard/waste that government investment can make.
jpalozie1 2 years ago
There's a great interview with Von Heyek, here on Youtube, regarding a conversation he had with Keynes regarding this very issue.
It's almost a matter of whether geometry vs calculus is even a valid argument. They both have their place.
caltrop69 2 years ago
Loads of economists did, but they were no doubt kept out of the media's eye
Seano71 2 years ago
And not all of this fall can be attributed to the fed. Yes, they held rates too low and encouraged investors to find other places for their money, besides T bonds. Money flowed into mortgage backed securities. But even rational banks over invested. Because of incentives linked to short term results, banks were susceptible to excessive risk taking. There was a private market failure, on the same scale as the great depression, when the Fed had little discretion, and we had a gold standard.
jpalozie1 2 years ago
It's true, natural bubbles do occur, from time to time, in an economy. You don't need the Fed to explain all of them.
There is also a natural means by which entities can be prevented from taking excessive risks. The fact that the government even HAS the power to help these companies avoid bankruptcy skews the risk assessment even further.
caltrop69 2 years ago
I agree with you. But in this case, the consequence was too dire. Although we'll never know what would have happened if we had just let finance collapse, when Lehman collapsed we got a taste. It was pretty awful. Even though our economy is still performing pretty poorly by most standards, it could have been worse. In another 20 years, would we have a stronger economy with this collapse? It's quite possible, and probable. But as one famous economist put it, "in the long run we're all dead."
jpalozie1 2 years ago
I like the Fight Club quote: "On a long enough time line, the survival rate of everyone drops to zero."
Of course...In Fight Club, they blew up the credit card companies to solve the problem. I'm not sure I'd be willing to endorse that method.
I worry for my retirement plan. Hopefully it being denominated in dollars doesn't decrease it's survival rate.
caltrop69 2 years ago
This guy is brilliant.
Bush and the Republicans have wrecked the economy and Krugman saw it all coming years in advance. Krugman, a a Nobel Prize winning economist recognizes the abject idiocy of Reaganomics.
AtlasShruggery 2 years ago 2
It is not necessarily Reaganomics he is criticizing. He is criticizing the malpractice created by the fed - which yes was in the hands of George W. Bush. However why would you blame free market policies for the troubles we are currently in, that would be illogical.
Offatwork 2 years ago
Uh, have you read any of Krugman's work? He was among the first economists to call bullshit on trickle down Reaganomics. Krugman recognizes the reality of market failure and the dangers of unregulated markets. He predicted the current economic collapse when you Republicans were still crowing about the "Bush Boom"
AtlasShruggery 2 years ago
Krugman is wrong. History proves it. FDR only made the depression worse with the same programs Krugman has recommended and lauded. Likewise with the Japanese who tried his method and lost a decade to economic downturn as a result. Also, Krugman said this in 2002:
"To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create..." End pt.1
Apmhflick 2 years ago
Pt.2 "...a housing bubble to replace the Nasdaq bubble. So a couple of years before the collapse, Krugman recommended the very thing that, by artificially driving up home prices with seemingly no end in sight, encouraged exorbitant home purchases, encouraged reckless lending, reckless borrowing, reckless securities based on reckless lending and borrowing--caused the collapse itself (albeit thru the Fed). On the other hand, Austrian economists saw the collapse and every other one in US history.
Apmhflick 2 years ago
Sorry. There should be an end quote after the word "bubble" in pt.2 of my response.
Apmhflick 2 years ago
Have you actually read anything that Hayek or the Austrians wrote before and after the Depression? Your silly statement that FDR "made the depression worse" is just Faux News nonsense and is contradicted by everyone from Keynes to Friedman. The housing bubble was the result of weak to nonexistent regulation of the banks by the Republicans who controlled the entire government from 2001 to 2007. Same thing happened in the 1980s under Reagan when the saving & loans collapsed..
AtlasShruggery 2 years ago 3
You've assumed a number of things here. 1st, you've assumed that I don't know what I'm talking about just because I have a different opinion. I'm well read in economics, thank you and the Austrians are the right ones. You also assume that I'm a W supporter and a Fox News junkie. I'm actually a libertarian anarchist who rejects electoral politics. I don't agree with democrats or republicans or even the libertarian party, so... Let's move on to the nitty gritty. End pt. 1
Apmhflick 2 years ago
Pt.2 1st, Friedman--from what I've read--wrote in both Free to Choose and A Monetary History of the United States, 18671960 that the Fed was responsible for the Depression and he highlighted many reasons why FDR was at fault for prolonging it: tax and tariff increases, price controls, burning crops to "help" farmers, public works programs that removed thousands of workers from the labor market, etc. What book of Friedman's did you get your info from? End pt.2
Apmhflick 2 years ago
Go back and read your own post. You claimed that "FDR only made the depression worse". That's simply not true. Look at what happened to GDP from 1932 to 1934. FDRs policies weren't all good but they made a huge difference. And Krugman has never advocated price controls or destroying agricultural surpluses. He never advocated a housing bubble either. Krugman warned years in advance about the dangers to the banking system from lax regulation.
AtlasShruggery 2 years ago
If Krugman never advocated a bubble, explain my cited quote. Did I just make it up? Also, teh Depression GDP is misleading for a number of factors. 1st, the government controlled the prices and therefore the resource worth is skewed. Second, the GDP included government spending. The massive public works outlays are hardly the same as an indication of true economic output. Most of those shovel leaner jobs never produced a buyable product.
Apmhflick 2 years ago
Pt.3 Also, there was a UCLA study done that proved FDR prolonged the depression. Google it-UCLA FDR Depression.
And you can't blame this on partisan politics 'cause UCLA is NOT exactly a conservative school. I agree that the republicans under W had a lot to w/ the downturn, but not b/c of deregulation. Show me a study that proves such and I can shoot it down. There's a great book called Meltdown that explains the crash, but I'll give you a...
Apmhflick 2 years ago
Pt.4...quick rundown of it all. The Austrian Theory of the business cycle explains everything. Hayek came up w. it. Really, if you read this one page article by the author of the book--he'll explain it better than I can and he has more room. This multiple part answer's killin' me. So go here and read it w/ an open mind. Then get back to me...
It won't let me post an address in here so I'm gonna email it to you.
Apmhflick 2 years ago
The Austrian school is based on laissez-faire economic principals. That is what Greenspan advocated and why the shadow banking system was allowed to develop. It failed in September 2008. We know that bankers couldn't self-regulate.
Medical research and health insurance also have distorted outcomes because of how the market functions.
Regulation is a necessary part of life for companies, just like traffice regulations are a necessary part of driving.
derfilmmacher 2 years ago
Laissez-faire has not caused the problems that we are in. I find it ironic that a president of the FED could be considered be from the Austrian School of economics. Austrian economics is against the existence of the FED. What has caused these problems is expansion of credit through low interest rates. This has cause a distortion and malinvestment in the economy. Alan Greenspan had advocated low interest rates for many years. We were NOT following laissez-faire economic principals.
mrsamsonite1 2 years ago
The report you are citing was done by a right wing scholar, if you are referring to the one which revised the unemployment data.
derfilmmacher 2 years ago
There are other studies that have proven the same point, namely that spending money to get out of debt always fails. 2nd, Greenspan is NOT an advocate of the free market. He wrote on the importance of gold-backed currency when he was younger, but he abandoned those worthwhile ideas to enter into Keynesian inanity by heading up the Fed--an institution that is diametrically opposed to austrian economic princiPLES. It's not about bankers self-regulating. That didn't cause the problem. End pt.1
Apmhflick 2 years ago
Pt2 It's self-regulation that would have been the market's savior by making the crisis moot. See, the Fed controls the $ supply and the interest rate and when it is artificially lowered it causes a false boom which is always followed by economic downturns. This is gov't regulation b/c the gov't colludes w/ the fed. If individual banks could decide for themselves what rates to lend at, they would lend at rates that would curb debt b/c they won't lend $ to ppl who couldn't pay. The gov't did that.
Apmhflick 2 years ago
Right. So your saying that if you took all of the traffic cops off of the road, I would not speed for fear of car accidents? Banks were like stupid invincible adolescents, thinking they were impervious to the ridiculous risks they were taking. Even when 2 teenagers were killed, they doubled down on bad debt. The fed has given society a powerful tool to ease the pain. Oh all of the government side shows, why so much angst towards the rather neutral independent one?
jpalozie1 2 years ago 2