Do you have adblock enabled?
 
If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(The Daily Beast)   If you can't argue with Paul Krugman on economics, why not complain about how he doesn't like your opinion instead?   (thedailybeast.com ) divider line
    More: Strange, Paul Krugman, Nobel Laureates, Joseph Stiglitz, government failure, dislocations, Zachary Karabell  
•       •       •

5886 clicks; posted to Main » on 14 May 2012 at 8:41 AM (4 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



263 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest


Oldest | « | 1 | 2 | 3 | 4 | 5 | 6 | » | Newest | Show all

 
2012-05-14 11:26:55 AM  

DamnYankees: Phinn: Everything. Labor, material resources. You name it. Desires are infinite. Resources are finite. If nothing else, there's always the scarcity of time and opportunity -- you can't do more than one thing at a time.

Ok, that was a nice long post, but it didn't really answer my question.

Scarcity of what right now?

Labor? Europe is not lacking labor - it has high unemployment.

Resources? What resources is Europe lacking, exactly? They have land, they have warehouses, they have natural resources, they have pretty much everything they would need to make stuff.

You need to be specific when you talk about this stuff in reality. What is scarce right now in Europe which is preventing its economy from going at full tilt?


Ooh! Ooh! I know!

Demand!
 
2012-05-14 11:27:20 AM  

jayphat: There isn't one single businessman who isn't drooling at the mouth thinking about the idea of replacing his clunky coal powetplant with a cheap energy efficient and clean alternative. Why? Because they will still charge you the same amount. The technology isn't there yet and these grants coning from the government aren't helping at all.


I wasn't specifically refering to "green energy" I was really just running with the auto industry example. As for this power generation thing: you would be hard pressed to find any industry with less control of their pricing than the power industry. Most power companies must satisfy the State before they're allowed to raise their rates and electricity is traded on the open market. Added to that, the reason we still see so many coal fired plants, is because coal is ridiculously cheap, sure there's a lot of people who would be glad to see a cheap, efficient, clean source of power, but it isn't necessarily the power companies and if the price of power generating dropped by half, they wouldn't be able to keep their rates the same.

/can you prove that government grants "aren't helping at all"
//go research what a "natural monoploy" is
///public utilities are a special animal from an economic perspective and unless you have some background in the industry you're better off not basing an argument around it.
 
2012-05-14 11:28:03 AM  

DamnYankees: Phinn: Everything. Labor, material resources. You name it. Desires are infinite. Resources are finite. If nothing else, there's always the scarcity of time and opportunity -- you can't do more than one thing at a time.

Ok, that was a nice long post, but it didn't really answer my question.

Scarcity of what right now?

Labor? Europe is not lacking labor - it has high unemployment.

Resources? What resources is Europe lacking, exactly? They have land, they have warehouses, they have natural resources, they have pretty much everything they would need to make stuff.

You need to be specific when you talk about this stuff in reality. What is scarce right now in Europe which is preventing its economy from going at full tilt?


You speak as if those resourses were just lying around waiting to be picked up.
News Flash, it is a "mature" environment.
SOMEBODY owns everything of value right down to the dirt on the ground.
And all of those somebodys believe they can get rich too.

It's all bullchit and it's bad for you.
 
2012-05-14 11:28:27 AM  

Phinn: The point is that no one knows, and no one could possibly know.


...so we should follow your policy advice? When you admit you have no idea what the problem is?

Phinn: If you think you can know these things, then go out there and take the economic risk, allocate the capital, and employ the resources and show us where the profits and losses are. You'd do a great service to humanity of you did.


Just because someone knows what the problem is doesn't mean they can fix it by themselves, genius.
 
2012-05-14 11:29:23 AM  

snocone: You speak as if those resourses were just lying around waiting to be picked up.


They often are. There are people who are unemployed. There are factories sitting idle. There is money sitting in bank accounts.

Why aren't they coming together?
 
2012-05-14 11:31:06 AM  

Phinn: By artificially easing credit, the government's banking system creates new money. The introduction of this new money (because it looks exactly like all the other pre-existing money circulating around) gives the illusion of an increase in productivity or demand for some good or service. But, all you've really done is decrease the value of the pre-existing money....

This is also the reason the government needs to have an income tax -- to take money out of the economy, thereby reducing the inflationary effect of creating new money. The government doesn't actually need to take your money out of your paycheck. They just don't want you to have all of it, so you won't go out and spend all of it.


Jesus you're an idiot. That's so god damned retarded, I don't even know where to begin.
 
2012-05-14 11:33:45 AM  

TyrantII: Not even that, where the frak does low interest rates have to do with anything?

The bubble and failure were created from HIGH interest rate resets. ARM's / Subprime....

Krugman never said anything about that. That was 100% the banks looking to screw people and sell risky stuff as sweet cake.

Hell, if it was only a mortgage crisis, we'd be a hell of a lot better off. But it wasn't, it was a financial crisis dealing with unknown risk in widely purchased MBS. Demand for housing didn't drive demand for risky MBS. Quite the opposite.


The availability of mortgage loans was greatly expanded, on purpose. Not only these programs create a larger pool of borrowers (which was a relatively small factor), but more importantly it expanded the amount that otherwise qualified borrowers could get.

The fact that those rates were higher than some other people's rates is not important. What matters was the fact that rates were lower for those borrowers than they would have otherwise been, and in some cases made loans available that would not have been made at all.

This is why there was a disproportionate rate of inflation in the single-family housing market.

The MBS security market was derivative of those underlying mortgage loans, obviously.
 
2012-05-14 11:36:12 AM  

impaler: I don't even know where to begin.


That's the hallmark of someone who doesn't know what he thinks he knows.
 
2012-05-14 11:37:41 AM  

DamnYankees: snocone: You speak as if those resourses were just lying around waiting to be picked up.

They often are. There are people who are unemployed. There are factories sitting idle. There is money sitting in bank accounts.

Why aren't they coming together?


They are all holding out to get the piece of the pie they believe was promised to them for working hard and saving up.
You too can be as rich as Mitt Romney, just work hard.

/oh, and don't go gay or female.
 
2012-05-14 11:37:48 AM  

Phinn: impaler: I don't even know where to begin.

That's the hallmark of someone who doesn't know what he thinks he knows.


As opposed to not knowing anything and posting 15 paragraphs at a time about what economics is, m i rite?
 
2012-05-14 11:40:10 AM  

Voiceofreason01: jayphat: There isn't one single businessman who isn't drooling at the mouth thinking about the idea of replacing his clunky coal powetplant with a cheap energy efficient and clean alternative. Why? Because they will still charge you the same amount. The technology isn't there yet and these grants coning from the government aren't helping at all.

I wasn't specifically refering to "green energy" I was really just running with the auto industry example. As for this power generation thing: you would be hard pressed to find any industry with less control of their pricing than the power industry. Most power companies must satisfy the State before they're allowed to raise their rates and electricity is traded on the open market. Added to that, the reason we still see so many coal fired plants, is because coal is ridiculously cheap, sure there's a lot of people who would be glad to see a cheap, efficient, clean source of power, but it isn't necessarily the power companies and if the price of power generating dropped by half, they wouldn't be able to keep their rates the same.

/can you prove that government grants "aren't helping at all"
//go research what a "natural monoploy" is
///public utilities are a special animal from an economic perspective and unless you have some background in the industry you're better off not basing an argument around it.


Can I prove government grants aren't helping at all? No. Can it be proven that government grants are working to an absolute certainty? No. And that's a problem. We're risking public money on private projects to people who have the money to start with but don't want to risk it themselves. As steward's of the public checkbook, our leadership has done an abysmal job of balancing needs vs wants vs who gives a shiat, lets spend spend spend! Grants from the various departments and bureaucracies go so unchecked that when the debate comes up about balancing the checkbook, it becomes a pissing contest about where it needs to be cut with both sides ignoring the fact that we've created too many layers of bull that need to be shoveled first before we should even talk about that.

Are all grants bad? No. Grants to LEO and fire departments are great things that could mean the difference between life and death. There's various other grants out there that do just as good work. But there's way too many that just get written off as "for the children" good until someone actually looks at the fact we spent $5 million of public money to research the mating habits of the Alaskan snow leopard and THEN we talk about oversight.

Will all waste get removed? No. I run a business. I'm not naive enough to believe we have zero inefficiencies. But until we start the model over, which controls what, his it gets dispensed, all this talk of balancing a budget is for nothing.

Oh and I think each years budget should be based on a blank sheet, not a 7% increase, then only spending 5% more and calling it a spending decrease.
 
2012-05-14 11:40:18 AM  

snocone: DamnYankees: snocone: You speak as if those resourses were just lying around waiting to be picked up.

They often are. There are people who are unemployed. There are factories sitting idle. There is money sitting in bank accounts.

Why aren't they coming together?

They are all holding out to get the piece of the pie they believe was promised to them for working hard and saving up.
You too can be as rich as Mitt Romney, just work hard.

/oh, and don't go gay or female.


How is this related to the issue of scarcity? Or is it no longer about scarcity?
 
2012-05-14 11:42:33 AM  

DamnYankees: ...so we should follow your policy advice? When you admit you have no idea what the problem is?


I know what the problem is. It's governmental distortion of prices by monetary inflation and diversion of resources into economically unsound (i.e., wasteful) activities.

As a result, prices everywhere are wrong. I don't know what the right prices are, since government distorted them. Some are higher than they would be, some are lower, but the central banking system has confused things to such an extent that there is no way to know which is which.

That information loss is permanent. It can't be synthesized.

But, fortunately, the destruction of price information can be stopped, and the economy can grow and develop again. But some people with very powerful political connections are profiting off the current system.
 
2012-05-14 11:43:50 AM  

DamnYankees: snocone: DamnYankees: snocone: You speak as if those resourses were just lying around waiting to be picked up.

They often are. There are people who are unemployed. There are factories sitting idle. There is money sitting in bank accounts.

Why aren't they coming together?

They are all holding out to get the piece of the pie they believe was promised to them for working hard and saving up.
You too can be as rich as Mitt Romney, just work hard.

/oh, and don't go gay or female.

How is this related to the issue of scarcity? Or is it no longer about scarcity?


You sound young. Serious even.
Warehouses(insert and object) cost money just existing, maintaince, power, etc.
They cost more money to operate and a ton of money to repurpose.
No profit, no operation.

Yea, money is the new scarce and it ain't a resourse unless it is scarce.
 
2012-05-14 11:44:29 AM  

Phinn: I know what the problem is. It's governmental distortion of prices by monetary inflation and diversion of resources into economically unsound (i.e., wasteful) activities.


Love it.

Phinn: As a result, prices everywhere are wrong.


This is a brilliant sentence. It's so meaningless, yet has such an air of profundity.
 
2012-05-14 11:45:28 AM  

snocone: Yea, money is the new scarce and it ain't a resourse unless it is scarce.


Ok, so now we get to it - money is scarce. That's what you've been dancing around.

Well, this has a really easy solution - make more money. Luckily we have machines dedicated to doing this exact thing.
 
2012-05-14 11:45:49 AM  

snocone: You speak as if those resourses were just lying around waiting to be picked up.
News Flash, it is a "mature" environment.
SOMEBODY owns everything of value right down to the dirt on the ground.
And all of those somebodys believe they can get rich too.

It's all bullchit and it's bad for you.


So what you're saying is that, if I want to make widgets but I need to buy lumber and steel and some machinery in order to get my widget business started that I'm going to have to buy that stuff from somebody? It's too bad that theres no way I could borrow some cash against my future successful widget business in order to get started. Oh wait! And since my widgets are more valuable than their component materials wealth is created which I can use to pay the bank for the priviledge of using their money.

/the economy is not a zero sum game(wealth can be created) there is not a systemic reason that there has to be losers
 
2012-05-14 11:47:22 AM  

DamnYankees: Well, this has a really easy solution - make more money. Luckily we have machines dedicated to doing this exact thing.


That's like trying to become taller by making inches shorter.
 
2012-05-14 11:48:46 AM  

Phinn: DamnYankees: Well, this has a really easy solution - make more money. Luckily we have machines dedicated to doing this exact thing.

That's like trying to become taller by making inches shorter.


No, its more like a direct solution to his issue.

He said the problem is that money is scarce. We can make more of it. You have 2 options:

1) Explain how making more money is not a solution to the scarcity of money.
2) Admit that scarcity of money is not the problem.

Please do try and follow the argument.
 
2012-05-14 11:51:50 AM  

Voiceofreason01: snocone: You speak as if those resourses were just lying around waiting to be picked up.
News Flash, it is a "mature" environment.
SOMEBODY owns everything of value right down to the dirt on the ground.
And all of those somebodys believe they can get rich too.

It's all bullchit and it's bad for you.

So what you're saying is that, if I want to make widgets but I need to buy lumber and steel and some machinery in order to get my widget business started that I'm going to have to buy that stuff from somebody? It's too bad that theres no way I could borrow some cash against my future successful widget business in order to get started. Oh wait! And since my widgets are more valuable than their component materials wealth is created which I can use to pay the bank for the priviledge of using their money.

/the economy is not a zero sum game(wealth can be created) there is not a systemic reason that there has to be losers


Every Ponzie has losers. Mostly losers.
All "made wealth" is a Ponzie.

Feeling like a patsy yet? You should.
 
2012-05-14 11:54:25 AM  

snocone: Voiceofreason01: snocone: You speak as if those resourses were just lying around waiting to be picked up.
News Flash, it is a "mature" environment.
SOMEBODY owns everything of value right down to the dirt on the ground.
And all of those somebodys believe they can get rich too.

It's all bullchit and it's bad for you.

So what you're saying is that, if I want to make widgets but I need to buy lumber and steel and some machinery in order to get my widget business started that I'm going to have to buy that stuff from somebody? It's too bad that theres no way I could borrow some cash against my future successful widget business in order to get started. Oh wait! And since my widgets are more valuable than their component materials wealth is created which I can use to pay the bank for the priviledge of using their money.

/the economy is not a zero sum game(wealth can be created) there is not a systemic reason that there has to be losers

Every Ponzie has losers. Mostly losers.
All "made wealth" is a Ponzie.

Feeling like a patsy yet? You should.


You should really go look up the definition of a ponzie scheme. Here's a hint. Social Security: ponzie scheme.
 
2012-05-14 11:55:53 AM  
If Krugman is wrong, every nation will be enslaved to international bankers that will crush their boot on our faces into eternity. So what's the big deal?
 
2012-05-14 11:58:14 AM  

jayphat: Are all grants bad? No. Grants to LEO and fire departments are great things that could mean the difference between life and death. There's various other grants out there that do just as good work. ...


There is a lot of governmental spending that I do not agree with, but that doesn't nessasarily mean that spending was bad. For instance my local police department recieved a federal grant and spent a part of it on an APC, I think that's a stupid use for the money but others might disagree. There's good evidence that the private sector won't spend money on pure research, if the government feels that more fuel efficient cars(as an example) serves the public good than the ought to invest money in the people you can do that research(in this case car companies). This is the type of stuff that government is for, whether of not you agree with what the money is being spent on is a seperate issue from whether the government should be spending the money in the first place.

/I agree that too much money is being spent on frivilous or unnecessary things but there are a lot of different opinions about what's important and what isn't
 
2012-05-14 12:00:21 PM  

Phinn: impaler: I don't even know where to begin.

That's the hallmark of someone who doesn't know what he thinks he knows.


No, that's the hallmark of someone responding to an idiot that's posting nonsensical bullshat.
 
2012-05-14 12:01:03 PM  

jayphat: snocone: Voiceofreason01: snocone: You speak as if those resourses were just lying around waiting to be picked up.
News Flash, it is a "mature" environment.
SOMEBODY owns everything of value right down to the dirt on the ground.
And all of those somebodys believe they can get rich too.

It's all bullchit and it's bad for you.

So what you're saying is that, if I want to make widgets but I need to buy lumber and steel and some machinery in order to get my widget business started that I'm going to have to buy that stuff from somebody? It's too bad that theres no way I could borrow some cash against my future successful widget business in order to get started. Oh wait! And since my widgets are more valuable than their component materials wealth is created which I can use to pay the bank for the priviledge of using their money.

/the economy is not a zero sum game(wealth can be created) there is not a systemic reason that there has to be losers

Every Ponzie has losers. Mostly losers.
All "made wealth" is a Ponzie.

Feeling like a patsy yet? You should.

You should really go look up the definition of a ponzie scheme. Here's a hint. Social Security: ponzie scheme.


Why, yes it is.
So what.
I get mine back NOW!
Good luck w/ yours.
 
2012-05-14 12:07:28 PM  
Fear not, people. Very shortly, Obama will be out of the White House and back to writing more books about himself.

Former Enron Adviser Paul Krugman will go right back to saying that all the things Government does to cover up its obscene overspending -- borrowing more money, printing more money, distracting you with George Zimmerman -- is deeply dangerous and evil.
 
2012-05-14 12:09:44 PM  

impaler: No, that's the hallmark of someone responding to an idiot that's posting nonsensical bullshat.


If it were nonsense, then you'd just say you don't understand it.

You understand what I'm saying; you just disagree with it.

But you don't know why you disagree with it, or how to refute it, because (like Krugman) you don't have a mechanism to explain how an economy actually works.

All you have is a bunch of political biases masquerading as your economic theory.
 
2012-05-14 12:18:13 PM  

Phinn: By artificially easing credit, the government's banking system creates new money. The introduction of this new money (because it looks exactly like all the other pre-existing money circulating around) gives the illusion of an increase in productivity or demand for some good or service. But, all you've really done is decrease the value of the pre-existing money


You've failed to address the problem of the creation of wealth without an increase in money supply. If money remains fixed, but the number of goods and services increase, the price of those goods and services decrease.
 
2012-05-14 12:21:26 PM  

Phinn: This is also the reason the government needs to have an income tax -- to take money out of the economy, thereby reducing the inflationary effect of creating new money.

This statement is stupid beyond belief. Income tax doesn't remove money from the economy. It does not have the ability to reduce inflationary effects. The government doesn't burn income tax revenue.
 
2012-05-14 12:22:37 PM  

snocone: Every Ponzie has losers. Mostly losers.
All "made wealth" is a Ponzie.


a ponzi scheme is where you pay previous investors with the money from new investors to create the illusion of real returns. If you use invested money to create something valuable(ie my widget example) then you've created wealth and added value to the economy.
 
2012-05-14 12:22:41 PM  

Phinn: I know what the problem is. It's governmental distortion of prices by monetary inflation and diversion of resources into economically unsound (i.e., wasteful) activities.


Price distortion, as you call it, goes way, way beyond any kind of governmental intervention. The simple supply and demand market you're talking about doesn't exist.

Today, most large scale business models work on building demand for existing supply through marketing. The price that people are willing to pay is governed by perceived value rather than actual value, and the gross deviation of perception from reality is the product of marketing.

For example, an article of clothing that should cost ~$20 based on utility, cost of production, etc., is priced at $500, because it has some designer's name on it. The government had nothing to do with that. Marketing is a private enterprise, and it distorts prices and disrupts "pure" supply and demand valuation far more than any governmental research grant.

The Free Market of pure capitalism, with its neat and efficient supply and demand pricing calculations, does not exist. It's a fairytale.

Thank this guy and his successors:

upload.wikimedia.org
 
2012-05-14 12:22:52 PM  

Phinn: You understand what I'm saying; you just disagree with it.

But you don't know why you disagree with it, or how to refute it, because (like Krugman) you don't have a mechanism to explain how an economy actually works.


No. You're just an ignorant moron. So ignorant, it would take me days of typing just to get you up to speed on basic economics. Where to start?
 
2012-05-14 12:23:42 PM  

impaler: Phinn: This is also the reason the government needs to have an income tax -- to take money out of the economy, thereby reducing the inflationary effect of creating new money.
This statement is stupid beyond belief. Income tax doesn't remove money from the economy. It does not have the ability to reduce inflationary effects. The government doesn't burn income tax revenue.


Shh. Just give up. He's smarter than a Nobel Laureate in the very discipline he won the prize in. Just kneel.
 
2012-05-14 12:25:33 PM  

imontheinternet: Price distortion, as you call it, goes way, way beyond any kind of governmental intervention. The simple supply and demand market you're talking about doesn't exist.

Today, most large scale business models work on building demand for existing supply through marketing. The price that people are willing to pay is governed by perceived value rather than actual value, and the gross deviation of perception from reality is the product of marketing.
...
The Free Market of pure capitalism, with its neat and efficient supply and demand pricing calculations, does not exist. It's a fairytale.


Yep. I'm actually surprised anyone still pretends that people are rational actors in an economy.
 
2012-05-14 12:26:43 PM  

Phinn: DamnYankees: ...so we should follow your policy advice? When you admit you have no idea what the problem is?

I know what the problem is. It's governmental distortion of prices by monetary inflation and diversion of resources into economically unsound (i.e., wasteful) activities.

As a result, prices everywhere are wrong. I don't know what the right prices are, since government distorted them. Some are higher than they would be, some are lower, but the central banking system has confused things to such an extent that there is no way to know which is which.

That information loss is permanent. It can't be synthesized.

But, fortunately, the destruction of price information can be stopped, and the economy can grow and develop again. But some people with very powerful political connections are profiting off the current system.


Just curious: when you took Micro-economics 101, was the class taught in something other than your native language?

Polish, perhaps? Or Esperanto?
 
2012-05-14 12:29:02 PM  

imontheinternet: For example, an article of clothing that should cost ~$20 based on utility, cost of production, etc., is priced at $500, because it has some designer's name on it. The government had nothing to do with that. Marketing is a private enterprise, and it distorts prices and disrupts "pure" supply and demand valuation far more than any governmental research grant..


Look, that designer blouse has some extra value to it. If it's percieved by the customer then good for both the seller and the buyer. The good news is that you can still buy a $20 blouse if you don't percieve the added value.
 
2012-05-14 12:32:33 PM  

impaler: Yep. I'm actually surprised anyone still pretends that people are rational actors in an economy.


it's still a useful way to model certain systems(commodities for example) and an excellent teaching tool, although you have to invent concepts such as utility to make it work beyond very basic examples. The problem is when you end up talking to freshmen business majors who just passed "intro to economics" with a cool 'C' and are now convinced that they know everything.
 
2012-05-14 12:53:27 PM  
Krugman thinks preparing for a fake alien invasion would be beneficial to the economy. How you can take anything he says at face value after that is mind boggling.

Some questions to all of you Krugman apologists. If massive amounts of government spending stimulates the economy, why hasn't the trillions in debt we've racked up since 1980 stimulated the economy?

If we start cutting the DoD budget, it would be detrimental to our economy. Many people would lose their jobs, and businesses would go bankrupt as there is no private demand for military grade weaponry. Since the DoD is an example of Keynesian stimulus (where it does not matter what you spend on, but how much), how can you say with a straight face that it is beneficial. All one needs to think about it what will happen when we turn off the all time greatest stimulus to see that it does not work.
 
2012-05-14 12:55:09 PM  

Phinn:
I'm the last one to defend the banks and investment houses, but the repeal of that particular portion of Glass-Steagall was a factor that actually prevented the spread of the housing-based economic collapse. Allowing the banks and investment banks to join up is what allowed some of them to survive. Without it, they would all have gone the way of Lehman Bros.

All of these artificial "regulations" (which are really just about control, not making things "regular" in any meaningful sense) are merely band-aid devices designed to mitigate the damage caused by the original source of the problem --- monopolistic, governmental currency and its artificially-easy credit effects. They're only perceived as necessary and beneficial because they try to mask the natural and inevitable consequences of government-sponsored banking.

Keynes was wrong.

/And gay, too. Since it seems to matter to you. Hater.


"Too big to fail." Remember that? Because every farker here current on his/her meds should. Oh, and the proper role of government is to either prevent monopolies or to regulate "natural monopolies" properly so they don't fark up the economy. In certain cases, the government should BE the monopoly. One more smallish note (well, more of yet another empirical fact you're ignoring): A single, common currency within national boundaries is a VERY GOOD THING(TM) for that economy.

Dear randroid: Wishing that empirically-verified-for-nearly-a-century economic reality were not so does not make it go away.

Gay doesn't matter to me: I apologize if I've mistaken you for a Republican, since you're spouting their false talking points.

/But I'll bet that's how you vote, "libertarian."
 
2012-05-14 12:58:16 PM  

MattStafford: Krugman thinks preparing for a fake alien invasion would be beneficial to the economy.


WW2 with 54 million dead, the industrial world decimated...good times!
 
2012-05-14 01:01:05 PM  

DamnYankees: Phinn: DamnYankees: Well, this has a really easy solution - make more money. Luckily we have machines dedicated to doing this exact thing.

That's like trying to become taller by making inches shorter.

No, its more like a direct solution to his issue.

He said the problem is that money is scarce. We can make more of it. You have 2 options:

1) Explain how making more money is not a solution to the scarcity of money.
2) Admit that scarcity of money is not the problem.

Please do try and follow the argument.


Scarcity of money is not the problem. The problem is that people who do not provide anything to the economy are being cut out of it, which has a negative effect throughout the economy. For example, if a guy was being paid to dig ditches and fill them back in, and then was fired from that job, would you say his problem was that he has a lack of money or that his problem was he had no marketable skills/services.
 
2012-05-14 01:06:14 PM  

snocone: GAT_00: Meanwhile, let's examine the current counter to the economic Krugman backs as working: austerity. It has failed in every country, all it does it cut GDP which cuts tax revenue which then fails to close the deficit gap it was designed to do since the people who promote it are incapable of seeing the reaction to their actions, and has caused England, who came up with it, to fall into a double-dip recession.

So I think any smart person would look just at that and go 'Hey, I think Krugman might be right here.' Of course, we are dealing with the GOP, so that isn't happening.

What works is taxing the rich 'till there are no rich no more.
Guaranteed results!


As does starving the poor and killing off the middle class.

If only there were some historical example of a regulatory regime of taxation and investment that created an economy where everybody - rich and poor alike - prospered.

/Like the US economy until the HL Hunts started changing taxation and regulatory policies, maybe?
 
2012-05-14 01:09:26 PM  

Phinn: Delay: If you are really worried about the debt we can agree to, a) put people to work, b) end the Bush tax cuts and c) put people to work.

People do not know where to work, or what type of work to do, without prices to tell us what it profitable and what is a loss. Price distortion creates an information problem.

This is true whether its a wage laborer deciding whether it's better to pick fruit in Florida or build roads in California, or an investor trying to decide if he ought to build a retail shopping center or buy a piece of Facebook. Every economic decision involves costs, risk, and a prediction of the possible gains.

None of that basic economic evaluation can happen without prices. And prices aren't reliable as signals of economic reality when the government and its central bank are distorting the prices of everything.

The result is chronic unemployment.

Which is the opposite of "putting people to work."


So, you're hanging your hat on the proposition that prices in an economy with a common currency are not real, unreliable and distorted?

What magic medium of exchange would you use, oh great economic wizard, Bitcoin?
 
2012-05-14 01:10:44 PM  

DavidVincent: MattStafford: Krugman thinks preparing for a fake alien invasion would be beneficial to the economy.

WW2 with 54 million dead, the industrial world decimated...good times!


4.bp.blogspot.com
Extremely good for business
 
2012-05-14 01:13:38 PM  

MattStafford: The problem is that people who do not provide anything to the economy are being cut out of it, which has a negative effect throughout the economy. For example, if a guy was being paid to dig ditches and fill them back in, and then was fired from that job, would you say his problem was that he has a lack of money or that his problem was he had no marketable skills/services.


So...where's the scarcity? Keep in mind, this line of argument is about scarcity, and how fundamentally that's the explanation for the situation we're in. Using your ditchdigger story, what's the scarcity which is preventing him from getting work?
 
2012-05-14 01:16:03 PM  

impaler: You've failed to address the problem of the creation of wealth without an increase in money supply. If money remains fixed, but the number of goods and services increase, the price of those goods and services decrease.


Yes, in a stable monetary regime, all else being equal, as efficiency and productivity increase, prices decrease. That's a good part of the reason for the amazing material bounty that we enjoy today, and why things like shoes are so cheap, historically speaking, when they've been beyond the reach of even moderately poor people for most of human history. It's why food is insanely cheap today, compared to the cost of producing it before modern fertilizers and farm machinery, which vastly increased agricultural productivity. Prices should fall, under those circumstances. This is why the relatively stable prices of the US during the 1920s is such a clear indication of inflation -- prices (esp. farm prices) should have fallen as fertilizers and internal combustion tractors were utilized. The Federal Reserve, which expanded it role throughout the mid 1910s up to the crash of 1929, prevented prices from falling as they should have.

See also computers.

Wealth creation is not equivalent to merely having more money.
 
2012-05-14 01:21:44 PM  

MattStafford: If we start cutting the DoD budget, it would be detrimental to our economy.


It's only bad in the short term. Look up the broken window fallacy; making bombs and ammo doesn't improve society, in fact, it draws away resources that could otherwise be spent on more creative projects.

/disclaimer: this is a very simple way of looking at the problem and there are a couple very important issues I did not address
 
2012-05-14 01:21:56 PM  

gretzkyscores: GAT_00: Meanwhile, let's examine the current counter to the economic Krugman backs as working: austerity. It has failed in every country,

Interesting assertion, but it seems to be lacking in actual fact. A cursory look at the actual data shows that for the most part, "austerity" has not been implemented at all.

mercatus.org

/WHAR AUSTERITY? WHAR?


Nice image.

Now break that up into increase due to welfare checks and increase due to government spending on infrastructure or stimulus programs.

You'll find out that a large portion of the increase of "spending" in the last three years has been due to people collecting unemployment checks (cheques) in western countries. So the money that goes out from the government coffers goes towards people's bank accounts, not to actually buy stuff.
 
2012-05-14 01:22:25 PM  

demaL-demaL-yeH: So, you're hanging your hat on the proposition that prices in an economy with a common currency are not real, unreliable and distorted?

What magic medium of exchange would you use, oh great economic wizard, Bitcoin?


Central banks do not exist to provide a common currency. Different forms of money can be traded, just like anything else. There's a certain convenience value in having a common currency, and that convenience value has a market price, just like anything else. No one has any way of knowing what the market value of such commonality of currency is, because the government mandate and currency monopoly destroyed that money-trading market.

Money should be whatever people choose voluntarily.

Governmental action destroys market information. That's what it does. That's its purpose and function.
 
2012-05-14 01:23:38 PM  

MattStafford: Please do try and follow the argument.

Scarcity of money is not the problem. The problem is that people who do not provide anything to the economy are being cut out of it, which has a negative effect throughout the economy. For example, if a guy was being paid to dig ditches and fill them back in, and then was fired from that job, would you say his problem was that he has a lack of money or that his problem was he had no marketable skills/services.


An empirically-verifiable counterargument would be: The real problem is that those who contribute the most to the real economy - by actually making goods and providing services that they consume by necessity - are being systematically robbed into penury (and of dignity, a job, rights, and a future) by those who produce absolutely nothing.
 
Displayed 50 of 263 comments


Oldest | « | 1 | 2 | 3 | 4 | 5 | 6 | » | Newest | Show all


View Voting Results: Smartest and Funniest

This thread is archived, and closed to new comments.

Continue Farking
Submit a Link »
On Twitter






In Other Media


  1. Links are submitted by members of the Fark community.

  2. When community members submit a link, they also write a custom headline for the story.

  3. Other Farkers comment on the links. This is the number of comments. Click here to read them.

  4. Click here to submit a link.

Report