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John The Pessimist

Krugman On The Election

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Countries are struggling to manage their economies in difficult times because they took the advice of this innumerate, one-parameter hoon fifteen years ago.

Keynesianism = welfare for bankers.

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Countries are struggling to manage their economies in difficult times because they took the advice of this innumerate, one-parameter hoon fifteen years ago.

Keynesianism = welfare for bankers.

Krugman has already shown his true colours by arguing for big banks not to be broken up.

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It's actually the only mainstream economist and the only mainstream (if slightly offshore) press article I've seen pointing out that the UK economy is all smoke and mirrors.

It also mentions the point I've mentioned a few times in the past. There is no incentive for politicians to do the right thing any more. Except it's not just politicians, it's bankers, everyone. Moral Hazard is killing us.

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It's actually the only mainstream economist and the only mainstream (if slightly offshore) press article I've seen pointing out that the UK economy is all smoke and mirrors.

It also mentions the point I've mentioned a few times in the past. There is no incentive for politicians to do the right thing any more. Except it's not just politicians, it's bankers, everyone. Moral Hazard is killing us.

Thats all very well, but youre not supposed to read the article, youre supposed to launch into an adhom stream of invective at the mere mention of his name.

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Thats all very well, but youre not supposed to read the article, youre supposed to launch into an adhom stream of invective at the mere mention of his name.

All he's done is said current policy aint working (not exactly difficult to see) and government needs to spend more...he cant provide any example's of when this has helped...when quizzed a couple of years ago on CNBC about when he'd accept defeat he said if the US govt was spending more than 50% of GDP then he'd say his assertions are wrong...of course, France is well above 50% of GDP as govt and not delivering greatly different results.

No one on here listens to him because he just talks about more spending...never monetary reform, never banking reform. The guy is a sell out shill.

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The problem with Krugman is he never lets facts get in the way of his narrative. For example why was the 2009 growth (predicated on borrowing and public spending) any better than the 2013 growth (predicated on borrowing and pumping money into housing?). Both are mid-directions of capital.

Yes priming another housing bubble is a bad thing. We know that, we're on HPC. At the same time there is something to be said for keeping people in work rather than the 20% unemployment experienced after the Wall Street Crash.

Krugman is like a stuck record. Still harking on about austerity and deficits when the government has borrowed more over the last 5 years than the UK government over the previous 2 centuries. At least with Keynes when the facts changed, he changed his mind.

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voters have fairly short memories and they judge economic policy not by long-term results but by recent growth.

That's only possible to be true if the circumstances of the majority remain reasonable on the surface as the election approaches so with recent "growth" and the all angles continual hype, propaganda and feel good marketing that goes with it they can be fooled that things aren't going to get worse and there's an apparent chance they might even get better.

That's where ever increasing debt comes into play to support statistical employment, benefits and tax credits etc. That and the lies about general austerity. Extravagant spending mainly just to stand still/decline slowly at best - and that's only on the surface. It also relies on there not being much political or policy competition which in the UK there isn't amongst the established party (LibLabCon) which operates on a Buggins' Turn basis.

It's also one of the reasons why UKIP is starting to become a threat because it is different in that it has the core policy in its name - Independence. The titles Conservative, Labour and Libdem are meaningless and can and do mean anything (and even then they renege on it).

Despite all the debt the UK general living standards have declined relentlessly over the decades. For example things like everyone in a household having to work if they're ever to get near to owning a UK house - marketed under stuff like freedom for females to work (that freedom being not a bad thing in itself).

With current policies under the Buggins' Turn parties that decline in general living standards will for sure continue.

Edited by billybong

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All he's done is said current policy aint working (not exactly difficult to see)

Except no one seems to be seeing it. Or if they are,they're not saying. The British and world press, the IMF, the EU are all holding up the UK as some kind of model success story. Even the political opponents seem to believe it.

Also, he doesn't actually say anything about his own views on what economic measures are required (I guess it is implied in the line about disagreeing with deficits being bad taken as fact). It's about the failure of politics and the press. My favourite topic of conversation!

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Except no one seems to be seeing it. Or if they are,they're not saying. The British and world press, the IMF, the EU are all holding up the UK as some kind of model success story. Even the political opponents seem to believe it.

Also, he doesn't actually say anything about his own views on what economic measures are required (I guess it is implied in the line about disagreeing with deficits being bad taken as fact). It's about the failure of politics and the press. My favourite topic of conversation!

My bold and italics.

They have to appear to believe it because if they get into power they'll be wanting to use the self same dodgy "growth" statistics to try to fool the electorate for the election after this one.

I agree if they were truly political opponents and had any worthwhile alternative policies they would be far more overt and critical in their opposition.

Edited by billybong

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Having read the article Krugman's view seems to tally with my own that this is something of an "emperors new clothes election" with three elephants in the room that are not being addressed:

1. The current "recovery" is built upon a combination of increasing levels of public sector and consumer debt and a balance of payments deficit. Recent UK economic history shows how this is likely to end....

2. The cause of the housing crisis is that house prices are too high, and government policy is maintaining their level through various market subsidies (housing benefit, help to buy etc) and other interventions (eg. planning, capital gains exemption).

3. With the population ageing there is no way that the existing levels of pension and health care can be supported indefinitely.

I suspect that the parties calculate that anyone who raises these issues, and tries to table policies that address them will be scorned by an electorate that only wants to hear "good news" and be told that everything will be OK.

I'm not sure if this is damining of our politicians, the electorate, or both?

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three elephants

If we can think up another issue, we can upgrade that metaphor to four horsemen. How about:

4. Totally un- and counter-productive banking sector at heart of giant ponzi sucking wealth out of real economy.

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Or, foreign policy wise: "with an expansionist Russia and chaos in the Middle East geo-political instability is rabidly increasing. Against this back drop no party is making any comment regarding defence spending being allowed to fall below the 2% required by NATO".

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There we have it ladies and gentlemen! The 4 horsemen of the 2015 election:

1. A "recovery" built upon a combination of increasing levels of public sector and consumer debt and a balance of payments deficit.

2. A housing super-bubble with government policy maintaining their level through various market subsidies (housing benefit, help to buy etc) and other interventions (eg. planning, capital gains exemption).

3. An ageing population with no way to continue existing levels of pension and health care.

4. Totally un- and counter-productive banking sector at heart of giant ponzi sucking wealth out of real economy.

Vote for the party that most often refers to these 4. By my reckoning it will be hard to find mention of just one of these in the MSM. Credit to Greens far talking about 4 and the coalition parties indirectly talk about 1 when they emphasise the need to remove the deficit.

EP

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All he's done is said current policy aint working (not exactly difficult to see) and government needs to spend more...he cant provide any example's of when this has helped...when quizzed a couple of years ago on CNBC about when he'd accept defeat he said if the US govt was spending more than 50% of GDP then he'd say his assertions are wrong...of course, France is well above 50% of GDP as govt and not delivering greatly different results.

No one on here listens to him because he just talks about more spending...never monetary reform, never banking reform. The guy is a sell out shill.

that's basically the problem innit?

he's saying spend more, but is not prepared to take a look at where,how,and by whom the present money is being spent.

it's not just monetary reform that's required....it's idealogical reform too.

we need to get back to running the countries finances like that of a normal household......without the credit cards.

ie)

do we really need it?

can we make it ourselves?

what does it do to reduce our outgoings?

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"To fight this recession... Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."

Paul Krugman, 2002.

http://mises.org/library/krugmans-call-housing-bubble

Yeah if you completely ignore the context of his article then he does use those words.

If you read it in full he is warning against a housing bubble which he clarified in his column 2 weeks later.

http://www.nytimes.com/2002/08/16/opinion/mind-the-gap.html

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Yeah if you completely ignore the context of his article then he does use those words.

If you read it in full he is warning against a housing bubble which he clarified in his column 2 weeks later.

http://www.nytimes.com/2002/08/16/opinion/mind-the-gap.html

If you read Krugman's utterances in full context you will see that he will cover all bases to ensure he can then pick and chose what he wants his previous position to be.

A rrecent Federal Reserve analysis of Japan's experience declares that the key mistake Japan made in the early 1990's was ''not that policy makers did not predict the oncoming deflationary slump -- after all, neither did most forecasters -- but that they did not take out sufficient insurance against downside risks through a precautionary further loosening of monetary policy.'' That's Fedspeak for ''if you think deflation is even a possibility, throw money at the economy now and don't worry about overdoing it.''

And yet the Fed chose not to cut rates on Tuesday. Why?

That doesn't sound like much of a warning of a bubble, more like a prescription not to let it burst.

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