The Third Depression
nytimes.com
The Third Depression
1–10 of 119 posts
Re: The Third Depression
#2I click the article. I see it's Krugman. Before I read further, I say, "Ah, Krugman. I bet his solution is to print money."
> ...governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.
That's Krugman's answer for everything. Dot-com crash? Create more money:
2001 Krugman: “During phases of weak growth there are always those who say that lower interest rates will not help. They overlook the fact that low interest rates act through several channels. For instance, more housing is built, which expands the building sector. You must ask the opposite question: why in the world shouldn’t you lower interest rates?”
Oh, wait, they did that and that created the housing bubble that he's now suggesting we prop up by... creating more money.
This quote from the article is even crazier:
> But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.
Balanced-budget orthodoxy? Man, the guy's got huge cojones, at least. When your policy causes problems, insist it on even louder as the solution, and point to classical common sense ("balance revenues and spending") as orthodoxy. Good economics, not so much, but huge cojones definitely. Startup founders could do worse than emulating his confidence when pitching investors.
Re: The Third Depression
#3I click the article. I see it's Krugman. Before I read further, I say, "Ah, Krugman. I bet his solution is to print money." > ...governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending. That's Krugman's answer for everything. Dot-com crash? Create more money: 2001 Krugman: “During phases of weak growth there are a…
> That's Krugman's answer for everything. Increase spending.
Just like articles from reason.org or cato or mises invariably decide the problem is too much government.
Which is why articles like this are best left to other sites.
Re: The Third Depression
#4I suspect the real problem is the evaporation of superficial jobs. We have become a nation devoted to our wants, but when things look bad people quickly cut back on such things. A tiny fraction of our population are "farmers" but with the over abundance of food produced and the only way to make money is to either suck on the governments subsidies or create specialty locally grown, free range, Organic etc goods.
I think only long term way to get out of chronic high levels of unemployment is to either accept we are going to live in a welfare state, or remove the minimum wage.
Re: The Third Depression
#5I suspect the real problem is the evaporation of superficial jobs. We have become a nation devoted to our wants, but when things look bad people quickly cut back on such things. A tiny fraction of our population are "farmers" but with the over abundance of food produced and the only way to make money is to either suck on the governments subsidies or create specialty locally grown, free range, Organic etc goods. I thi…
what do you think of basic income?
Re: The Third Depression
#6I suspect the real problem is the evaporation of superficial jobs. We have become a nation devoted to our wants, but when things look bad people quickly cut back on such things. A tiny fraction of our population are "farmers" but with the over abundance of food produced and the only way to make money is to either suck on the governments subsidies or create specialty locally grown, free range, Organic etc goods. I thi…
What's a 'superficial job'?
Re: The Third Depression
#7Considering that his Keynesianism has basically destroyed Japan's future (while at the same time he faults them for not borrowing enough) I'd hope he'd proceed with a bit more caution. The basic problem he has is that he doesn't really understand why we're here. When debt chases bad assets it's a disease that has to be cleared.
He ignored some pretty serious depressions in his analysis as well. The panic of 1819 comes to mind as a pretty serious one. People ignored the desires of those long on stocks and real estate to bail them out. They realized the problem was too much debt and just let it work itself out despite the pain it caused them in the short run.
Then there is the depression of 1920-21. This depression probably highlights most clearly the Austrian theory of the business cycle and why the Austrian response to the bust is the correct one. There were no interventions in the economy following the bust. It was a very serious contraction by any definition.
We live in a world that's consumed by debt. We're taught that debt is good despite our instincts to the contrary. We're taught that being irresponsible is the way to get yourself out of short term pain. Listening to these people seems like madness at this point. The real reason that budget cuts are on the table is that everyone knows we're all broke. After 10 years of this I imagine people are going to get fed up with bailouts and inflation. Krugman will still be crying for more stimulus while a few people might get serious enough to let the banks fail and start over.
Our fear of short term pain might be the worst part of the modern political system. We'd rather avoid some of the short term pain even if that means dragging things out for decades.
Re: The Third Depression
#8I click the article. I see it's Krugman. Before I read further, I say, "Ah, Krugman. I bet his solution is to print money." > ...governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending. That's Krugman's answer for everything. Dot-com crash? Create more money: 2001 Krugman: “During phases of weak growth there are a…
Would you care to explain why printing money is a bad solution for the current scenario? And since economics is not a science who decides what is good economics? And what about criminalizing speculation against sovereign debt - that is the root cause of what is happening in europe right now.
Re: The Third Depression
#9I click the article. I see it's Krugman. Before I read further, I say, "Ah, Krugman. I bet his solution is to print money." > ...governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending. That's Krugman's answer for everything. Dot-com crash? Create more money: 2001 Krugman: “During phases of weak growth there are a…
> That's Krugman's answer for everything. Increase spending. Just like articles from reason.org or cato or mises invariably decide the problem is too much government. Which is why articles like this are best left to other sites.
It doesn't matter to me if they always decide a certain solution to certain problems, as long as they are right.
Now, I am not against regulations per se(at least in the broad sense), but the kind of regulations that corporations brought and pay for. Government regulators can be brought, or sometime the regulatory framework cause a lot of economic distortion, often to the benefit of oligopolies or monopolies. Sometime, the regulators comes from the industry that they're trying to regulate themselves.
We seen regulatory capture happens with the trains, the ACTA fiasco, and easy treatment of BP by US inspectors.
Sometime, I think people are too naive about the regulators and the regulatory framework. Libertarians got a lot more going for them than "too much bureaucracy".
Re: The Third Depression
#10I click the article. I see it's Krugman. Before I read further, I say, "Ah, Krugman. I bet his solution is to print money." > ...governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending. That's Krugman's answer for everything. Dot-com crash? Create more money: 2001 Krugman: “During phases of weak growth there are a…
I'm glad to finally find someone who knows exactly what caused the housing bubble and subsequent crash. Could you explain it to me? I find the whole matter very confusing myself, although I've read a lot about it. So: low interest rates caused the housing bubble. Could you explain how that happened exactly?