Paul Krugman - We Need More of Keynes

Have you read the reviews on Krugman's new book yet? http://www.amazon.com/gp/product/B004J8HXGS/ref=as_li_ss_tl?ie=UTF8&tag=t...

It is great to have smart people in the government, because we are going to need as many of those people as we can get. The key factor right now is that we lived the past 25 years with the central bankers stabilizing the economy. When we entered a recession, they would cut interest rates to save the economy. We took for granted that they would always be able to do the job. In Japan, they cut interest rates to zero, and it wasn't enough. That worried a lot of people, including Ben Bernanke.

Bernanke has cut the interest rate to zero. This means that there is nothing left as a policy measure except for fiscal stimulus. This is why we need more people to dig ditches, build bridges, and fix schools. Keynes is the only thing we've got, and we need more of it.

We need to figure out how much the stimulus the economy needs, and then add 50%. Most economists take the opposite position, but not Krugman. This is a weird situation. It is a once in every 3 generations recession. It is a situation like the 1930s. In a situation like this, the normal rules to not apply. It is more like an Alice in Wonderland world, where everything goes the reverse of what you would think. Thrift, savings, and government responsibility are all bad for the economy. The only responsible thing to do is to run big deficits.

It isn't the technocrats who caused the crisis. This system evolved as a way to get around the financial regulations. As this happened, nothing was done about it. Politicians increasingly believed in free markets. It is very difficult to get a man to understand something, when his salary depends upon his not understanding it.

In 2003 the housing market began to inflate out of control. They had an opportunity to change the regulations, but they reduced the small amount of regulations that were already in place.

Category:

News & Politics

Tags:

• Paul Krugman
• Princeton
• Ben Bernanke
• Obama
• liberal
• conscience of a liberal
• economist
• nobel prize
• Investing
• Treasuries
• Gold
• Silver
• Dollar
• Federal Reserve
• inflation
• interest rates
• capitalism
• free markets
• george soros
• jim rogers
• marc faber
• keynesianism
• john maynard keynes
• economics
• central banks
• bernanke
• recession

[mahoganytoothpick]

I couldn't disagree more with this guy.

[maestro1110]

@jessemaurais I happen to know all of that. And what is your counter argument? Krugman is still on the wrong position, and Kaynes theory is bull... and may work a little bit in short term. You are just assuming that a normal economy can be productive only with small interest rates, but you are wrong.

[jessemaurais]

It's amazing how many morons on the net think they know macro economics without having an education -- in any subject, economic or otherwise. If you don't know higher mathematics, you don't know ECON. That's it. Yet these idiots on the net hate on Keynes and Krugman without having read either, or worse, heard about the general theory through twats like Peter Schiff or Alex Jones, who talk of some strange parody bearing no resemblance to the thing.

[jessemaurais]

@dlane0308 Thank you! I thought maybe I was the only one on the net who gets Krugman, or who doesn't have a hard on for Ron Paul.

[EGarrett01]

The dislike bar on Krugman's videos gives me faith in humanity. And I'm not joking.

[Reido2828]

@WingThaiJ

You like Jim Rogers to?

[WingThaiJ]

@Reido2828 Krugman is a Pencil Pusher economist who is either a liar or is as stupid as JRogers claims.He wants tax on financial transactions claimg conservatives tout how great what Singapore & HK R doing who use this tax.He fails to reveal:SP:NO taxes on capital gains(&Krugman demands Congress raise capital gains taxes);Corp income rate flat 17%;income tax rates R substantially lower than U.S.;In (Hong Kong) HK, corp&individual, are substantially lower than U.S;HK has no tax on capital gains

[WingThaiJ]

@AustrianLens Yes, Krugman gets paid not to understand

[AustrianLens]

“It is difficult to get a man to understand something when his salary depends on his not understanding it.”- Krugman painting the kettle black.

[Reido2828]

Krugman pretty much sums up the economic problems of America. Anymore of his policies get put into place then we can watch the whole country burn.