P-Krug is likely neither a liar nor a quack. So what gives?
Two examples of quotes: Is P-Krug confused? No. And he's not dumb. He must just think WE are dumb. And the people who read him, and quote him, ARE dumb.
Bailouts
1. Workouts, Not Bailouts - New York Times, Aug 17, 2007 Many on Wall Street are clamoring for a bailout -- for Fannie Mae or the Federal Reserve or someone to step in and buy mortgage-backed securities from troubled hedge funds. But that would be like having the taxpayers bail out Enron or WorldCom when they went bust -- it would be saving bad actors from the consequences of their misdeeds... Say no to bailouts - but let's help borrowers work things out.
2. Is saving our Fannie enough? - Seattle Times, Sep 9, 2008 The just-announced federal takeover of Fannie Mae and Freddie Mac, the giant mortgage lenders, was certainly the right thing to do - and it was done fairly well, too... So Fannie and Freddie had to be rescued...
Deficits and interest rates
1. Deficits and interest rates - New York Times, Aug 14, 2009 It turns out that there's a strong correlation between budget deficits and interest rates - namely, when deficits are high, interest rates are low ... On reflection, it's obvious why...
2. A fiscal train wreck - New York Times, Mar 11, 2003 But we're looking at a fiscal crisis that will drive interest rates sky-high. A leading economist recently summed up one reason why: ''When the government reduces saving by running a budget deficit, the interest rate rises.''
There is a lot more where this came from.
(nod to Mel H)
4 comments:
My personal favorite, via "The Accidental Theorist":
"It is possible for economies to suffer from an overall inadequacy of demand--recessions do happen. However, such slumps are essentially monetary--they come about because people try in the aggregate to hold more cash than there actually is in circulation. (That insight is the essence of Keynesian economics.) And they can usually be cured by issuing more money--full stop, end of story. An overall excess of production capacity (compared to what?) has nothing at all to do with it."
I'm a loyal KPC reader and I hope I'm not dumb - I like to quote Krugman's Clinton-Era essays, such as the following gem:
"... Imports, not exports, are the purpose of trade. That is, what a country gains from trade is the ability to import things it wants. Exports are not an objective in and of themselves: the need to export is a burden that a country must bear because its import suppliers are crass enough to demand payment."
Mind adding a clause for Krugman hipsters like me - we only like his old stuff.
Deficits during expansion/inflation are not the same as deficits during contraction/deflation.
What was not quoted from PK's Mar 2003 link:
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But unless we slide into Japanese-style deflation, there are much higher interest rates in our future.
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And the people who read him, and quote him, ARE dumb.
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Especially those who selectively edit his quotes.
This link is glorious. What has become of Krugman? He’s lost his mind and his ethics. What a shame. Maybe his economics will return with the next GOP president.
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