Log in

No account? Create an account

Krugman macro from Facebook

ETA: Krugman has an interview in this month's Playboy.  NSFW because of ads.
Also, crossposted to the_recession.
A couple of paragraphs of last week's Silly Sustainability Saturday for August 20, 2011 were devoted to a Huffington Post article "Fighting Global Warming Could Stave Off Alien Invasion: Report," which linked to an article in The Guardian. The gist of both articles was "[r]ising greenhouse emissions could tip off aliens that we are a rapidly expanding threat." A commenter pointed out that the point of the original study was the Aliens are going to destroy us because of Global Warming. I responded that it gets even crazier.

Not only did six times as many Fox News viewers think we should prepare for an alien invasion than research climate change, which I mentioned in the Silly Sustainabilty post, but the week before, Paul Krugman postulated that preparing for a fake alien invasion would bring us out of recession.

Read more...Collapse )

Above excerpted from For Narb: Paul Krugman and fake alien invasions and Silly Sustainability Saturday for August 27, 2011 on Crazy Eddie's Motie News.

In February 1982, Susan Sontag made a fierce challenge to a left-wing audience gathered at New York’s Town Hall:

Imagine, if you will, someone who read only the Reader’s Digest between 1950 and 1970, and someone in the same period who read only The Nation or The New Statesman. Which reader would have been better informed about the realities of Communism? The answer, I think, should give us pause. Can it be that our enemies were right?

Posing that question won Sontag only boos from an audience that the New York Times described as “startled.” Yet the question has only gained power over the intervening years. It contributed to the rise of a healthier, more realistic left much less tempted to make excuses for “progressive” dictatorships than the left of the last generation. If Hugo Chavez has any defenders on the contemporary American left, I haven’t heard of them.

Think of Susan Sontag as you absorb the horrifying revised estimates of the collapse of 2008 from the Commerce Department. Two years ago, Commerce estimated the decline of the US economy at -0.5% in the third quarter of 2008 and -3.8% in the fourth quarter. It now puts the damage at -3.7% and -8.9%: Great Depression territory.

Those estimates make intuitive sense as we assess the real-world effect of the crisis: the jobs lost, the homes foreclosed, the retirements shattered. When people tell me that I’ve changed my mind too much about too many things over the past four years, I can only point to the devastation wrought by this crisis and wonder: How closed must your thinking be if it isn’t affected by a disaster of such magnitude? And in fact, almost all of our thinking has been somehow affected: hence the drift of so many conservatives away from what used to be the mainstream market-oriented Washington Consensus toward Austrian economics and Ron Paul style hard-money libertarianism. The ground they and I used to occupy stands increasingly empty.

If I can’t follow where most of my friends have gone, it is because I keep hearing Susan Sontag’s question in my ears. Or rather, a revised and updated version of that question:

Imagine, if you will, someone who read only the Wall Street Journal editorial page between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have been better informed about the realities of the current economic crisis? The answer, I think, should give us pause. Can it be that our enemies were right?


Paul Krugman being reviewed in a sustainablity blog? Yes. Remember that the intersection between a thriving economy and a just society is a bearable social economy, and Krugman is all about that, while his rivals are not. Besides, he's probably the most visible mainstream economist who takes the environment seriously, and doesn't just write it off as a series of externalities. However, that's not why I'm writing about him tonight. Krugman is also an academic, and he's dismayed at how his intellectual opponents at the University of Chicago refuse to accept the reality of today's economic situation.
Reading Noah Smith reading John Cochrane solidified a thought I’ve been grasping at for a while: the extraordinary lengths to which the Chicago School is going to avoid a straightforward interpretation of the mess we’re in.
[A]t Chicago and elsewhere in the freshwater universe they’re playing Calvinball (and what a good coinage that was from Mike Konczal). All kinds of novel and implausible effects — effects that weren’t in any of the models they were using before the crisis — are invoked to explain why we’re in a sustained slump; strange to say, all of these newly invented models just happen to imply the need for tax cuts and a shrunken welfare state.

But I don’t think it’s just political bias: part of what’s happening, I’m sure, is intellectual embarrassment. These people come from a movement that declared, with great arrogance, that Keynesian economics was dead – then failed to produce a workable alternative, and now finds itself in what is very recognizably a Keynesian world. Recognizably, that is, to everyone but them, because admitting that Keynesian-type thinking is useful now would just be too humiliating.
As one academic to another, I pointed out both the deeper problem and the solution.
The physicist Max Planck had this to say about progress in his field, "Science advances one funeral at a time." If economics works the same way, then the freshwater economists have exploited this process to make economics retreat, not advance. It will take decades of work by the saltwater economics departments churning out Ph.D.s to undo the damage.

So, Dr. Krugman, how many grad students are you advising these days?
I've seen this dynamic in action before, so I know what Krugman has to do in addition to being a public intellectual--train more people who think like him to outcompete his rivals. If nothing else, doing so would piss off his academic rivals no end, as it would be a sign that they haven't won, and won't have succeeded for the rest of their lifetimes.

Above originally posted to Crazy Eddie's Motie News.
In Two Speeches and an Editorial, Paul Krugman juxtaposed two quotations from President Obama about the importance he placed on empathy with the following sentence from the National Review Online on the same subject.

Empathy is simply a codeword for an inclination toward liberal activism.
Follow me behind the cut for the observations of the commenters on one particular implication of Paul Krugman's point, including my own comment.Collapse )

Above originally posted at Daily Kos.

Paul Krugman made the following aside in his post Paleomonetarism.

I used that term — it’s probably not original, but who knows? — in a recent post about the increasingly obscure meaning of the money supply.
Google knows, that's who. I posted the following comment in response, which is awaiting moderation.

According to a Google search for "paleomonetarism" I just performed, there are 23 pages that mention the term, 21 of which reference this particular post. The two that don't belong to Dale Carrico at Amor Mundi on Blogspot, who first used it on December 15th in a post commenting on a post of yours in which you used "paleo-monetarist." So you may or may not have originated the term, but if you didn't, you certainly inspired it. Either way, congratulations!
That post of Krugman's that Dale Carrico responded to? It was the same one that Krugman linked to as what he thought was his first use of the term. Loop closed and Krugman deserves at least part of the credit for coining the term and all the credit for popularizing it.

On the irrationality of conservatives

Last Thursday, Dr. Krugman concluded a post about a model he fleshed out with the following:

The model, and more broadly overall logic, suggests that there is good no reason why the economy has to suffer a large loss of output and employment after a Minsky moment. The capacity is there, and nothing about the fact that some people have too much debt makes it impossible to use that capacity to produce goods and services for other people.

But the policies that can prevent that gratuitous slump — a commitment to higher inflation over the medium term, and/or deficit spending — run right up against ingrained prejudices. The foundations for the shock were laid by a long period of relative stability, especially low inflation; it’s very hard for policy makers to accept that what was good in 2000 or even 2007 is no longer at all good now that Minsky has struck. And everyone has just seen the punishment for too much debt; asking others to run up debt to help fix the problem, even though it’s right, is unavoidably a tough sell.

We might nonetheless have been able to get through this with less damage if we’d had strong leadership and clear thinking from the economics profession. But as it was …

Anyway, if you want to know what’s lurking behind what I say about our economic mess, now you know.
Several people pointed out the typo that reversed what the Good Doctor meant to say--"that there is no good reason why the economy has to suffer a large loss of output and employment after a Minsky moment"--but that's not what I wanted to point out.

Instead, I responded to the part about "ingrained prejudices."

The conflict in views between you and the economists who agree with you and the conservatives and other "very serious people" seems to me to be a perfect illustration of what science fiction writer Jerry Pournelle believes to be a key difference between most liberals and most conservatives. According to Pournelle, who has a Ph.D. in political science, that difference is not really about the role of government; both groups deep down believe in the power of government. Instead, what separates them is the belief that social problems can be solved by use of reason, which Pournelle calls "rationality." Liberals believe that rationality can be used to perfect society, while conservatives are skeptical of its power. Pournelle, himself a conservative, thus labels conservatives as "irrational."

Just so that I don’t exclude the Libertarians reading your blog, I’ll add that Pournelle shows that they have a different basis for their political beliefs. They are strongly rational, but have a low belief in state power. So, what would ever unite them with traditional conservatives, who are more irrational and believe in state power? Put the two of them together, and one gets a group of people who display a negative correlation between state power and rationality. Liberals and others on the Left, including the anarchists, on the other hand, show a positive correlation between state power and rationality.

As for how all this relates to your situation, you are using the power of reason to point out how and why things went wrong and how to improve things. The conservatives aren't listening, in large part because they're using irrational explanations of behavior, such as conventional and traditional morality, to guide their responses and construct their solutions. Think, how many times have you had your rational, well-thought-out, and strongly supported ideas dismissed by people who are using ingrained prejudices and moral teachings? Probably more times than you can count.
Visual aide behind the cut.Collapse )

Crossposted to darksumomo.
[Do you hate Slate? Well, me too, for the most part. Regardless, this in-depth series by Timothy Noah, probing America's growing class and economic inequality, is uber-important, and timely.]

The Great Divergence
By Timothy Noah

Part One: Introducing the Great Divergence

In 1915, a statistician at the University of Wisconsin named Willford I. King published The
Wealth and Income of the People of the United States
, the most comprehensive study of its kind
to date.

The United States was displacing Great Britain as the world's wealthiest nation, but
detailed information about its economy was not yet readily available; the federal government
wouldn't start collecting such data in any systematic way until the 1930s. One of King's purposes
was to reassure the public that all Americans were sharing in the country's newfound wealth.
King was somewhat troubled to find that the richest 1 percent possessed about 15 percent of the
nation's income. (A more authoritative subsequent calculation puts the figure slightly higher, at
about 18 percent.1)

This was the era in which the accumulated wealth of America's richest families—the
Rockefellers, the Vanderbilts, the Carnegies—helped prompt creation of the modern income tax,
lest disparities in wealth turn the United States into a European-style aristocracy. The socialist
movement was at its historic peak, a wave of anarchist bombings was terrorizing the nation's
industrialists, and President Woodrow Wilson's attorney general, Alexander Palmer, would soon
stage brutal raids on radicals of every stripe. In American history, there has never been a time
when class warfare seemed more imminent.

That was when the richest 1 percent accounted for 18 percent of the nation's income. Today, the
richest 1 percent account for 24 percent of the nation's income. What caused this to happen?

Read more...Collapse )

PART 1 of 9 of an ongoing current investigative report into US class/economic inequality.

All parts can be read here: <http://www.slate.com/id/2267157/>

Paul Krugman: "The Angry Rich"

September 19, 2010

The Angry Rich

Anger is sweeping America. True, this white-hot rage is a minority phenomenon, not something that characterizes most of our fellow citizens. But the angry minority is angry indeed, consisting of people who feel that things to which they are entitled are being taken away. And they’re out for revenge.

No, I’m not talking about the Tea Partiers. I’m talking about the rich.

Read more...Collapse )


Paul Krugman: "Two mistakes I've made"

Mistakes? I’ve Made A Few … Well, Two.

Tuesday 14 September 2010

by: Paul Krugman

It doesn’t upset me when people attack my ideas.

On the contrary, I feel that most wouldn’t bother unless they were worried that I was actually affecting the course of events.

For example, when I was reading Yahoo! Finance not long ago, this essay was featured on the home page: “Krugman is Wrong! Stimulus Spending Is ‘Hurting the Economy,’ Says Brian Wesbury.”

In a video interview, Mr. Wesbury, an economist at the Illinois-based investment-services firm First Trust Portfolios, warns against the evils of government spending: “I say government stimulus destimulates because by moving resources out of one sector into another you’ve now messed up the natural order of things and you’ve influenced it, I think, in a negative way.”

Read more...Collapse )