Paul Krugman Is Freaking Us Out

[marmar]

via truthdig:




Paul Krugman Is Freaking Us Out
Posted on Jul 11, 2010


He’s a one-man downer, but mainly because he’s smart, credible and pulls no punches. In his latest New York Times column, the Nobel Prize winner warns that the Federal Reserve isn’t taking a negative enough view of the economy—with potentially dire consequences. Happy Monday to you, too, Paul.

Paul Krugman in The New York Times:

After all, Fed officials, like most observers, have a fairly grim view of the economy’s prospects. Not grim enough, in my view: Fed presidents, who make forecasts every time the committee that sets interest rates meets, aren’t taking the trend toward deflation sufficiently seriously. Nonetheless, even their projections show high unemployment and below-target inflation persisting at least through late 2012.

So why not try to do something about it? The closest thing I’ve seen to an explanation is a recent speech by Kevin Warsh of the Fed’s Board of Governors, in which he declared that doing what Mr. Bernanke recommended back in 2002 risked undermining the Fed’s “institutional credibility.” But how, exactly, does it serve the Fed’s credibility when it fails to confront high unemployment, while consistently missing its own inflation targets? How credible is the Bank of Japan after presiding over 15 years of deflation?

Read more

http://www.truthdig.com/eartotheground/item/paul_krugman_is_freaking_us_out_20100711/?ln

[nickinSTL]

1. at least someone isn't burying their head in the sand

yeah, it'd be so much better for him to be a stupid cheerleader like the federal reserve and the wall street idiots and the administration, etc. :sarcasm:

Now if someone in the administration would just LISTEN to people like Krugman and Reich - maybe we'd actually try to do SOMETHING to fix this mess. :mad:

Edited to add: I understand that you are probably not recommending that he shut up or join the cheerleading.

[SusanaMontana41]

74. +1

n/t

[KeyWester]

2. Hack.

In his last article he said historically job numbers fall after a recession is technically over, but didn't recognize that the recession is technically over, and job numbers are NOT CRASHING ... like they did after the Bush recession was technically over.

Yet in the next breath the hack says we are in the middle of a depression, totally ignoring what he just typed on his keyboard.

[ixion]

5. Krugman isn't perfect, but he is certainly no hack.

He was one of the few columnists to call Bush on the illegal invasion of Iraq, and has been a strong voice for the Rule of Law and the Republic in an age where the Corporate Police State is dominating all.

No, sir, this man is no hack.

[KeyWester]

14. "No, sir, this man is no hack. "

Then explain it...

If he understands that historically job numbers fall after a recession has technically ended, like he wrote.

Then explain why when he looks at this recession, that has technically ended and he sees the job numbers NOT falling, which shows us this recovery would be stronger than previous ones, like he noted 'historically' ...he sees a depression ?

His own words tell us that this recovery is stronger than past ones because job numbers stabilized so quickly , he admits this , but then claims we are in the middle of a depression.

Can you explain that ?

[On the Road]

53. I Don't Understand How He Could Say That Either

and apparently no one else here does. It's pretty basic, and an appeal to authority isn't enough.

I do respect Krugman's opinion, and also believe another round of economic stimulus or looser money would be wise, but he hasn't substantiated his claims very effectively.

[fishwax]

62. you think that unemployment remaining high is a sign of a stronger recovery?

"His own words tell us that this recovery is stronger than past ones because job numbers stabilized so quickly , he admits this , but then claims we are in the middle of a depression."

"Job" numbers have stabilized at very, very high unemployment. That's not a good thing.

[SusanaMontana41]

72. You are exactly right, ixion

Who else is speaking up for the stimulus and the jobless, besides Krugman and Ed Schultz? I wish our president would.
~ down to my last unemployment check after 15 months of interviews and rejection letters

[EstimatedProphet]

9. The Bush recession hasn't ended yet!

It turned into a depression!

[KeyWester]

15. The numbers across the board were WORSE under Bush.

So the numbers across the board get better and somehow it goes from a recession to a depression ?

How does that make sense ?

[BootinUp]

22. You have never even attempted

to discuss the meaning of Krugmans articles. You are the hack, Krugman is a respected economist.

[paulk]

24. +1000

and more than a "hack", I'd surmise...

[KeyWester]

26. theres that discussion you were looking for.

How profound

[paulk]

32. I don't waste my time in discussion

with idiots or trolls, "keywester".

What was your tag before you got ts'ed the last time?

just curious...

[Hell Hath No Fury]

46. This one smells to high heaven...

:eyes:

[donco6]

83. Yep.

[Joe Fields]

65. troll?

[KeyWester]

25. You are right.

I was only posting what he said.

Krugman thinks the economy under Bush was a recession , and once all the economic numbers got better he then called it a depression.

Please explain how that makes sense ? I asked many times and all I hear is "you are the hack" ...and in the next breath ..."you never attempt to discuss"

Oh the irony.

OK, lets discuss my question above , how does it make sense ?

[Jakes Progress]

40. Got back in?

Welcome back to DU.

By the way. The day you can actually discuss an issue rather than the semi-colons of a post, someone might care.

[Lydia Leftcoast]

41. Because only the Wall Street indicators seem to be improving

People are still losing their jobs, people are still long-term unemployed (especially if they're over 50), jobs are still moving overseas, and stores are still closing. The Main Street economy is not only failing to improve--it continues to get worse.

[NorthCarolina]

29. +1

[SusanaMontana41]

73. Thank you. n/t

[Cary]

51. You should only be as competent as Krugman.

Go get an education on the subject before you try having an opinion. Specifically you should try to understand the concept of a liquidity trap, which is what Krugman was referring to.

It's not that ignored "what he just typed on his keyboard." It is that you don't understand what he typed.

[SusanaMontana41]

75. Check. Mate.

Thanks.

[fishwax]

61. lol

"In his last article he said historically job numbers fall after a recession is technically over, but didn't recognize that the recession is technically over"

Actually, in his last article he did recognize that the recession was over ("the recession brought on by the financial crisis arguably ended last summer"), and he didn't say anything about jobs other than that "unemployment ... remains at levels that would have been considered catastrophic not long ago, and shows no sign of coming down rapidly."

Unemployment numbers, which normally fall after a recession, are not falling.

"Yet in the next breath the hack says we are in the middle of a depression, totally ignoring what he just typed on his keyboard."

He didn't say we're in the middle of a depression, he said he thought we were in the early stages of a third "depression," and that the periods of "recovery" wouldn't make up the ground we've lost in the (series of) Bush recession(s).

[Vinnie From Indy]

71. How about you post the EXACT passages in Krugman's article

that you disagree with. Simply stating that Krugman wrote something and then attacking him for it is extremely lame. In fact, I would offer that making this type of an attack on a Nobel Prize winning economist without offering anything other than snark is the definition of a "hack". Cheers!

[fascisthunter]

77. anyone saying anything counter to the propaganda and you attack them

a pity.... no thought involved.

[xchrom]

3. Recommend

[DCBob]

4. Krugman, like many media pundits, has enormous pressures to make headlines..

Paul is doing a great job at that.

[ixion]

6. ...

:eyes:

I notice that people with no arguments attack the messenger.

[DCBob]

7. Like you just did to me?

:eyes::eyes:

[ixion]

8. I didn't attack you

just commented on the lack of actual arguments in your post.

Pretty sensitive for a guy who likes to make derogatory statements.

[DCBob]

10. I didnt attack Krugman either.. just making an observation which is no doubt factual..

Do you dispute that? Or are you still in "attacking the messenger" mode?

[marmar]

11. Repetez en anglais, s'il vous plait?

:wtf:

[newfie11]

43. LOL n/t

[DCBob]

12. delete..

[paulk]

27. how is your "message" relevant to the article?

if anyone is attacking the messenger, it's you.

[SusanaMontana41]

76. Funny how that works, isn't it?

I've got your back, friend.

[AngryAmish]

42. I disagree. I believe his worries are sincere.

But I disagree with him.

[DCBob]

47. I didnt say he wasnt sincere but I think he is erroring on the side of hype..

Its not hard to do when you are weekly columnist under tremendous pressure to make headlines and sell papers.

[Joe Fields]

66. um, the correct word is erring, not erroring.

[fascisthunter]

78. I'm Glad most don't put much stock into what you say

[DCBob]

13. Where was Krugman during the Bush era when this economic crisis was fermenting?

He's such an "expert" now, how did he miss predicting the greatest ecnomic collapse in modern history?

[marmar]

16. Umm, he didn't "miss" it......

http://www.nytimes.com/2005/05/27/opinion/27krugman.html

[DCBob]

20. He did miss it..

"The important point to remember is that the bursting of the stock market bubble hurt lots of people - not just those who bought stocks near their peak. By the summer of 2003, private-sector employment was three million below its 2001 peak. And the job losses would have been much worse if the stock bubble hadn't been quickly replaced with a housing bubble. So what happens if the housing bubble bursts? It will be the same thing all over again," -- Krugman

Well its obviously a hell of lot worse than the minor recession of 2000-2003. Krugman should have screaming from the housetops "Depression is coming!, Depression is coming!".. like he is doing now.

[BootinUp]

37. Did you know he wrote a book about it in 1999? nt

[DCBob]

48. About impending real estate market crash causing a massive world wide recession/ near depression?

No, I did not know that.

[BootinUp]

54. Pretty much the same warnings he gives now.

Learn from the past, don't make economic policy based on confidence fairies and bond vigilantes. He based this on studies of other countries going through what we are going through now. Anyone up for some Japan style deflation in the US?

Funny how you dismiss his articles from 2005 on the housing bubble. Basically tells me you have an agenda that doesn't include fact based arguments.

A review of his book from 1999.
http://www.nytimes.com/1999/05/16/books/avoiding-a-crash.html

The title may be a bit misleading. Krugman does not think the world is about to descend into a 1930's-style depression. In fact, he argues that such a fate can be avoided if we instead remember the economic theories born of the Depression, most notably the work of Lord Keynes. Depression economics, Krugman says, ''is the study of situations where there is a free lunch, if we can only figure out how to get our hands on it, because there are unemployed resources that could be put to work.'' He thinks that in some places, most notably Japan, it is time for government to actively seek inflation. I think he is too severe on Japanese policy makers, who finally are pulling out all the stops to get their economy moving, but Japan would be in better shape now if Krugman's advice had been heeded earlier.

Krugman argues that now, as in the 1930's, there is too much emphasis on economic orthodoxy and on somehow restoring the confidence of investors. To be sure, confidence is of immense importance at certain times, and a major reason that country after country suffered currency collapses was that investors took flight. But countries facing crises now are not going to be any more successful than Herbert Hoover was at winning confidence by slashing public works spending while their economies stagnate.

What appalls Krugman now is not the problems the world faces but the reluctance to learn from them. ''Those who worried about balanced budgets back when uncontrollable deficits were the problem suddenly insist that raising taxes and cutting spending will actually prevent a recession, because it will improve confidence,'' he says. ''Those who wanted stable prices back when inflation was the risk now claim that 'managed inflation' will somehow backfire.''

The reality to Krugman is that there are few, if any, economic policies that are always right for all countries. What you should do depends on where you are and on an ability to think clearly about how you got there. There are times when capital controls can work, and when they would be disastrous. There are times when fixed exchange rates can work wonders, and times when they can blow up. That is not the easy answer, but it is the right one.

[DCBob]

58. I dont see a word about an impending housing crisis possibly causing a depression..

maybe its in the book.

[BootinUp]

63. Whats in the book

is sound analysis of the problems in the world economy and conventional economic policy that can lead to deflation or depressions, like the deflation or depression we are perilously close to experiencing, and historical lessons on how to combat it.

a new blog post:

Trending Toward Deflation
http://krugman.blogs.nytimes.com/2010/07/11/trending-toward-deflation/

[Joe Fields]

67. probably because you are not looking very hard.

[YvonneCa]

79. Conscience of a Liberal. Depression Economics. n/t

[BootinUp]

64. Just another article on the housing bubble

from '05.

http://www.nytimes.com/2005/08/08/opinion/08krugman.html?scp=2&sq=krugman+housing+bubble&st=nyt

[KeyWester]

17. Krugman said....

the economy was in a recession under Bush.

But since the economic numbers have ALL improved under Obama he will now call it a depression.

How does that make sense ?

[nickinSTL]

80. you keep saying all economic numbers have improved...

ok, the Wall Street numbers have...

What about unemployment? Have THOSE numbers improved? I don't think so.

And to those of us who are faced with friends and family who are unemployed, plus hoping we aren't going to lose our own jobs...THOSE are the numbers that really matter.

I don't give a flying f$%^ whether the Wall Street indicators are healthy- they have ZERO to do with my day-to-day reality.

The unemployment numbers SUCK. Royally suck. And as long as they do, yeah, I believe we're in a depression.

Call Krugman a sensationalist looking for a headline if you want, but I think he's right.

[eShirl]

18. he was right there explaining why it was not going to end well

where were you?

[KeyWester]

21. explain it then...

you would be the first.

Why was it a recession under Bush , but once the economic numbers got better he then called it a depression ?

Anybody ?

[BootinUp]

23. If you actually posted anything that resembled

what Krugman said maybe it would be worth discussing.

[KeyWester]

28. Oh please

Krugman called the economy under Bush a recession.

Krugman called a economy with far better numbers under Obama a depression.

What did I spin ? what do you disagree with.

Feel free...

[BootinUp]

19. lol.

it becomes much clearer why you put so little credence in his work.

[QC]

39. Krugman was stripping the bark off Bush twice a week in the NY Times,

even back when the Shrub's popularity had silenced pretty much everyone else in the media. He hit Bush on his economic policies, his expansion of presidential powers, and pretty much everything else.

It's surprising that one would have to explain this to such a formidable scholar of politics, but there it is.

[DCBob]

56. Bashing Bush is one thing.. everyone was doing that.. Krugman should have been sounding the alarm..

on the impending economic collapse/possible depression that will soon come if dont address the problems... just like he is doing now.

[QC]

59. No, everyone was not bashing Bush when his approval was nearly 90%,

and Krugman had a lot to say over the years about Bush's disastrous economic policies.

Either you are genuinely unaware of Krugman's writings in the Times, or you just made the usual reflexive cry that "He never said anything bad about Bush!1!!1" that Obama's critics so often get hit with here, whether it's actually true or not.

Neither case looks good, but it's no big deal. Krugman is a Nobel laureate and tenured professor at Princeton, and you and I are just two anonymous posters on a message board. I doubt he cares much about our opinions, or needs to.

[Warren Stupidity]

81. The poster appears to fall back to that particular attack

frequently when the argument gets uncomfortable.

[QC]

82. You've noticed that, too, eh? n/t

[PVnRT]

84. I guess anyone who isn't a psychic isn't worth listening to

Or, in your case, anyone who doesn't simply parrot the official White House talking points.

[doc03]

30. Well in reality the recession ended about a year ago,

when the GDP is positive it is a recovery. Jobs is a totally different subject you can have a recovery with no gain or even a loss of jobs. Jim Crammer was very bullish on the economy for the second half of the year he even expects good job growth. It may be too late for the November election, one of the talking heads the other day said that the voters minds are pretty much set in stone by April of the election year.

[KansasVoter]

33. You lost everyone when you mentioned Crammer!

[doc03]

36. Never mind Crammer we are not in a depression or

even a recession we have positive GDP growth we are in a slow painful recovery. The last thing we need to do is follow Krugman, his remedy for everything is more spending. The Republicans remedy is tax cuts both radicals on opposite sides..

[KansasVoter]

31. So, some here think they know more than Krugman? Now that IS funny.

[KeyWester]

34. If he thinks we are in a depression.

then yes, I am understanding the current economy better than he is.

Perhaps you would like to explain his position ?

[KansasVoter]

35. No, I for one do not think I know more than he does. You explain it to all of us!

It is amazing when he says things we like we like him and when he says things we don't like we do not like him.

Pretty stupid.

[harun]

45. Depends on what your definition of "depression" is. He understands

the word better than you, obviously.

[KeyWester]

49. well..

a recession requires negative GDP growth.

Rational minds understand a depression would also require negative GDP growth.

Thats rational minds.

[harun]

44. It is funny but depressing as well.

[SoCalDem]

38. When it comes to money, pie-in-the-sky optimism is not always a winning strategy

I would rather hear worst-case scenarios, so I can prepare, than to to be surprised later on.

If the pessimism is unwarranted, it's better than to to crash & burn every few years.

[KeyWester]

50. What did we learn today ?

A recession requires negative GDP growth.

But a depression can have many quarters of positive growth.

Fuck, the GOP isn't even using the word depression, but the democrats are.

Talk about fear mongering.

[DCBob]

52. Republicans wont use the word because they know its absurd..

Its a troubling time in America.

[Individualist]

57. That anonymous posters infer they're more economically knowledgeable than Krugman,

a Nobel Prize winning economist.

:rofl:

[Greyhound]

55. Well, somebody sure as hell ought to.

The fervor with which far too many demonstrate in clinging to the official fantasy that all will be just fine if only we keep the very worst offenders alive by bowing sown to them is truly frightening.
:kick: & R

[FBI_Un_Sub]

60. The outcome so far has proved Krugman right

[KeyWester]

68. Ya...

the positive GDP growth and positive job numbers mean we have slipped into a depression.

What fucking outcome are you looking at ?

The economic numbers got BETTER , and in his mind it means we are in a depression ?

You are implying the economy was better under Bush than under Obama , this takes a high degree of denial.

[FBI_Un_Sub]

69. Noted

GDP growth has been anemic at best. Positive job numbers -- my daddy was a union official in rust belt-lunch pail America and those job numbers are positive only in terms "Least Upper Bounds" and "Greatest Lower Bounds" of infinite series.

I am not implying crap. The economy was headed down under Bush, even with Bush's "deregulation" of financial markets, his breaks for his cronies, and funding two wars "off the books."

The economy is not going to get better until we:

• Quit pouring money down a Mesoptamian crap hole (I'm retired military -- and I say that);
• Get some manufacturing job growth,
• Quit importing +50% of our petroleum, and
• Banks really begin really lending to small (manufacturing) businesses.

[Vinnie From Indy]

70. I have read your posts on this thread

How about you post the exact passages of Krugman's that you disagree with and then let's discuss.