Comments on: Calpundit Interviews Paul Krugman

By: zizka

zizka — Fri, 19 Sep 2003 00:35:18 +0000

“On the other hand, the emphasis in the debate here about foreigners no longer buying Treasuries is a weaker line of reasoning. This warning has been sent up so many times for so long that it’s just not effective.” Strikes me as a classically stupid example of the fallacy Feynmann was yalking about.

By: Doug

Doug — Thu, 18 Sep 2003 12:17:11 +0000

Well, K thinks the US is already in dangerous territory, that the Bush tax cuts should be rolled back immediately and some additional taxes levied on top of that. So in that sense, he gives a time frame in the interview: now. The driver of the argument is that bond market sentiment can change very quickly and can overshoot, so for the sake of the larger economy, policy makers shouldn’t let the key indicators get anywhere near the levels that would trigger a change in market sentiment. We’ve seen that at work in the US on inflation; many other countries have faced it on deficit-to-GDP ratios or debt-to-GDP ratios; the eurozone countries have tried to write these in stone with their stability pact. So far, so good, and I like Howard Dean’s line, “We’ll return to Clinton levels of taxation in exchange for a Clinton economy.” On the other hand, the emphasis in the debate here about foreigners no longer buying Treasuries is a weaker line of reasoning. This warning has been sent up so many times for so long that it’s just not effective. Second, investments have a strong relative component: for people to quit buying US bonds, there has to be a more attractive alternative. Same thing for equities and other investments: the return outside the US has to be greater before people will change their portfolios.

By: zizka

zizka — Thu, 18 Sep 2003 05:01:21 +0000

“Horse manure draws flies. I don’t believe in bashing Krugman”. OK. Doug, so until Krugman is willing say the exact date when the bubble bursts, what he’s saying is senseless?—or if I’m wrong, please tell me what you were trying to say. (I’m sure Bastiat can enlighten me too.) Feynman described some of you guys—Russian roulette optimists. “Look, we’ve been winning so far, despite what the naysayers say.” Did you hear that Hitlery is going to run as Clark’s VP candidate, then have Clark killed so she can carry on Presidential lesbian affairs with Barbra Streisand, Madonna, and Christina Aguilera? That little bitch Britney will be so pissed.

By: Walt Pohl

Walt Pohl — Thu, 18 Sep 2003 00:30:05 +0000

Arnold: I actually don’t agree with Krugman 100%. I have my own opinions on economic issues, which are considerably more sanguine than Krugman’s.

By: Henry

Henry — Wed, 17 Sep 2003 23:58:57 +0000

My vague-ish memory is that Krugman has expanded on what he means by the ‘elections only a formality’ argument – his worry isn’t that elections would be abolished, but instead that Republicans are pushing for the same kind of hegemony in US politics as the LDP has in Japan. Which is something rather different from a ‘plan to end free elections.’

By: Tom

Tom — Wed, 17 Sep 2003 23:50:46 +0000

‘…in which elections are only a formality’ – well, the damn things are still pictured as happening, right? Sorry, that line is self-evidently entirely different from the one Arnold was looking for.

By: Matt McIrvin

Matt McIrvin — Wed, 17 Sep 2003 23:30:04 +0000

The part about ending free elections in the quote from “The Great Unraveling” at the beginning of the interview. Krugman qualifies it with a “possibly”: “The goal would seem to be something like this: a country that basically has no social safety net at home, which relies mainly on military force to enforce its will abroad, in which schools don’t teach evolution but do teach religion and possibly in which elections are only a formality….”

By: Sean

Sean — Wed, 17 Sep 2003 23:19:16 +0000

For those who think the ‘trade deficit’ will be the undoing of the US I’d recommend reading Bastiat’s ‘Economic Sophisims’. It’s a classic…

By: Tom

Tom — Wed, 17 Sep 2003 23:05:49 +0000

Arnold, where does Krugman imply that the Bush Administration wants to end free elections in the USA? I don’t see it in Kevin’s interview, nor do I remember that claim turning up in his NYT columns. I could easily be wrong, but do remind me if you can.

By: Arnold Kling

Arnold Kling — Wed, 17 Sep 2003 22:41:24 +0000

“Krugman is followed wherever he goes by a swarm of bashers” Horse manure draws flies. I don’t believe in bashing Krugman. On the contrary, I like to point out the things that he says which represent mainstream economics. When he says that the cost of Social Security and Medicare is likely to rise to a higher percentage of GDP than the government now collects in total taxes, that statement is grounded in mainstream economics. Saying that the Administration has a plan to end free elections is a bit more speculative. I believe it’s a mistake to think that you have to agree with Krugman 100% or disagree with Krugman 100%. The Krugman-bashers make that mistake. I hope that Krugman supporters don’t fall into the same trap.

By: Doug

Doug — Wed, 17 Sep 2003 19:49:48 +0000

“Could one of Krugman?s detractors explain how it is infinitely possible for the U.S. government to rely on the other nations of the world to pay its bills?” Not a Krugman detractor here, but an interested observer who’s heard similar arguments for the better part of a decade and a half. I don’t know if K is putting a time frame on his assertions, but some scale would certainly be helpful, otherwise one is likely to run into Keynes’ assertion about the long run. Will the Js (or the rest of the world) stop buying Treasuries this month? In time for their fiscal year to end on March 31? Sometime before the next US election? By the end of the decade? When a certain criterion is met? When the Cubs win the Series? Without this sort of guideline – or at least some sort of guideline – the assertion that US trade and fiscal deficits cannot continue indefinitely is useless.

By: Tom

Tom — Wed, 17 Sep 2003 19:14:53 +0000

‘As one old Nobelist in economics put it at a recent conference, “Paul has turned into a talentless hack.” ’ Uncle Miltie would be outnumbered by the ten Nobelists (Solow, Akerlof, McFadden, Modigliani, etc.) who signed the EPI’s petition, then.

By: Dugger

Dugger — Wed, 17 Sep 2003 19:10:26 +0000

The good doc himself has said he has been “radicalized” since the last election (probably when he finally realized the Supreme Court, not California’s 9th Circuit, would be resolving the Gore election-stealing issue). We are, of course, centrally organized, but the Conspiracy to Vituperate against Krugman did not trick him into saying that. Don’t believe me. Lying in Ponds rates Coulter, Scheer and Krugman as the three most partisan columnists. Krugman, though, via his NYT pulpit, has nearly twice as many (total) partisan columns as Coulter. And yet we are to believe Krugman is capable of being fair? And if he says George Bush is a DANGEROUS RIGHT WINGER with a SECRET AGENDA, instead of the mild mannered, slightly bumbling family man he is, we should take his radicalized word for it?

By: zizka

zizka — Wed, 17 Sep 2003 17:47:13 +0000

Krugman is followed wherever he goes by a swarm of bashers; only Hitlery can evoke such shrieking rage. Kevin Drum is approaching 350 comments on his interview, about half of them from stubborn, semiliterate idiots. You guys are lucky here.

By: nolo

nolo — Wed, 17 Sep 2003 17:22:13 +0000

Actually, Ann’s a misunderstood comic genius.