Tag Archives: krugman

Krugman Is Half Right

By William K. Black
Quito: May 16, 2015

Paul Krugman has a nice column entitled “Fraternity of Failure” dated May 15, 2015.

In Bushworld, in other words, playing a central role in catastrophic policy failure doesn’t disqualify you from future influence. If anything, a record of being disastrously wrong on national security issues seems to be a required credential.

But refusal to learn from experience, combined with a version of political correctness in which you’re only acceptable if you have been wrong about crucial issues, is pervasive in the modern Republican Party.

Continue reading

The New York Times’ Secret Rule Forbidding Its EU Writers from Reading Krugman

By William K. Black
Quito: May 10, 2015

I don’t know when the New York Times adopted the (obviously secret) rule that forbids its news staff that writes about the EU from reading Paul Krugman’s columns in that obscure newspaper named the New York Times. I can say that compliance with the rule appears to be nearly 100 percent. It is, of course, a mystery why the NYT would give Krugman, a Nobel Laureate in Economics; the most prominent position in the world to explain economics and then require its news staff covering Europe to ignore virtually everything he explains.

Continue reading

Krugman’s Bashes Progressives for Criticizing Obama on Grounds that He Criticizes Obama

By William K. Black

Paul Krugman’s admirers would never list modesty as one of his characteristics. He has written a column “In Defense of Obama” that begins by explaining that his criticisms of President Obama were correct, but that unidentified others’ criticisms of Obama constitute “trash talk.”

Specifically, Obama “came perilously close to doing terrible things to the U.S. safety net in pursuit of a budget Grand Bargain.” Obama sought to produce a self-inflicted disaster by desperately trying to reach a “Grand Bargain” with Republicans that would have inflicted austerity on our Nation in 2012, “slash[ed] Social Security and [raised] the Medicare [eligibility] age.” As even Krugman admits, we were saved from this catastrophe “only by Republican greed, the GOP’s unwillingness to make even token concessions” to achieve the Grand Bargain. What Krugman omits in the tale is that it was also a revolt by Democratic progressives against the Grand Bargain that saved Obama and the Nation.

Continue reading

Krugman, Helicopters, and Consolidation

By Scott Fullwiler and Stephanie Kelton

Paul Krugman has a new post that explains why the debate over money- vs. bond-financing of government deficits is really much ado about nothing.  In it, he essentially echoes longstanding MMT-core principles, as we will show below.  Indeed, MMT blogs have written as much many times previously (for example, see here, here, here, and here).

Krugman’s post looks at two alternative scenarios:

Case 1: The government runs a deficit, selling bonds to offset the shortfall, while the Federal Reserve does QE

Case 2: The government runs a deficit but does not sell bonds, instead financing all of its spending by “printing money” (i.e. with newly created base money)

Continue reading

Revealed Biases: Why MMT Critics Continue to Rely on Strawman Arguments

By William K. Black

Economists of nearly every flavor believe in the concept of “revealed preferences.”  What matters is not what people say they will do in a hypothetical situation, but what they actually do.  Their actions speak more credibly than their words.  In this column I announce a related concept: “revealed biases.”

Continue reading

Beyond Pity and Safety Nets

By Dan Kervick

Paul Krugman is justifiably appalled at what he calls the “war on the unemployed”, the accelerating right-wing campaign to subdue, discipline and pauperize the jobless.  Yet there is nothing new in this campaign.  Economic conservatives and market fundamentalists have always tended to believe that the private enterprise system is both self-correcting and stringently just, and that unemployment results from a misguided combination of indulgent maternal do-gooding and inept government interference with the austere and efficient rectitude of market operations.  The fundamentalists believe unemployment happens because artificial minimum wage laws prevent wages from falling as far as they need to fall to clear the labor market, and that unemployment insurance compounds the problem by seducing potential workers into an unsustainable, dead-end limbo on the dole when they should be swallowing their strong laissez faire medicines and the bitter wages that go with them.  After all, if these dregs and flops were worth more handsome wages, then the Invisible Hand would have already dispensed those wages to them, right?

Continue reading

The New York Times Thinks Bleeding Cyprus is “Strong Medicine”

By William K. Black
(Cross posted at Benzinga.com)

I’m announcing the New York Times award for incompetence in macroeconomic reporting (IMR, pronounced like “screamer”).  I suggest that the paper offer as a prize to awardees a two hour lunch with Krugman in which he provides a remedial economics lecture.  My premise is that it is impossible to be a NYT reporter and fail to know that the paper has a Nobel Laureate in economics who writes a regular column for the paper and frequently discusses making economic downturns worse by inflicting self-destructive austerity.  Even the most casual reader of Paul Krugman’s columns would know that opposition to austerity has long been the dominant view among economists and that over the last five years events here and in Europe have again confirmed that view.  Continue reading

Krugman is Right about Simpson-Bowles: The Buzzards Circle the Fiscal Cliff

By L. Randall Wray
(Cross posted from economonitor.com/lwray)

In a powerful piece, Paul Krugman blasts Alan Simpson as an ignoramus when it comes to federal government budgets. He rightly wonders why anyone takes this nutter seriously:

Simpson is, demonstrably, grossly ignorant on precisely the subjects on which he is treated as a guru, not understanding the finances of Social Security, the truth about life expectancy, and much more. He is also a reliably terrible forecaster, having predicted an imminent fiscal crisis — within two years — um, two years ago…. So what is it that makes Simpson the figure he is? Clearly, it’s an affinity thing: never mind his obvious lack of knowledge, his ludicrous track record, reporters trust and idolize Simpson because he’s their kind of guy.

Continue reading

Understanding the Permanent Floor—An Important Inconsistency in Neoclassical Monetary Economics

By Scott Fullwiler

I’ve written numerous times already about how a deficit “financed” by bonds vs. “money” doesn’t matter in terms of inflationary effect.  Notwithstanding my views there (which are not discussed in this post), the point of this post will be to explore the neoclassical paradigm on this matter, since this is at the core of the recent debate between Steve Randy Waldman (see here, here, and here) and Paul Krugman (see here and here) on the so-called “permanent floor.”  (It might be of interest to some that I explained how a “permanent floor” would work back in 2004.)

Continue reading

Wake Up Progressives: the Trillion Dollar Coin Can Be Game-Changing!

By Joe Firestone

Well, not really. But if you view the Trillion Dollar Coin (TDC) meme, as I do, as a short-hand for the more general idea of using Platinum Coin Seigniorage (PCS), then yes, it can change the whole political game for progressives if President Obama dares to use it.

Literal TDC proposals would solve the debt-ceiling, but they won’t solve the larger problem of defeating the austerity politics that is so close to getting the cuts to social safety net and important discretionary government programs that austerians have long sought. PCS game-changer proposals are the ones calling for, or analyzing the impact of, PCS options aimed at paying off the national debt and covering anticipated federal deficit spending for some years. Continue reading