Krugman Destroyed In Debate

[briansd1]

Actually, Krugman was right. Bold government action, such as foerign exchange controls, helped Iceland do better than the Baltics.

The same was true with Malaysia during the Asian financial crisis.

Doing something is better than doing nothing.

[Allan from Fallbrook]

[quote=briansd1]Actually, Krugman was right. Bold government action, such as foerign exchange controls, helped Iceland do better than the Baltics.

The same was true with Malaysia during the Asian financial crisis.

Doing something is better than doing nothing.[/quote]

Brian: A post which completely ignores two BIG facts: The Crash of 2008 and subsequent events (including the Eurozone crisis at present) completely dwarf the Asian Currency Crisis, LTCM, etc and “bold government action”, which did stabilize events in 2008, is now a game of diminishing returns, largely because the respective governments and central banks (Fed and ECB) are running out of bullets.

Interest rates have been slashed, various stabilization programs and policies have been enacted and trillions of dollars and Euros have been pumped into the respective economies, financial systems, etc and we’re now approaching a point where there will be no bullets left in the gun.

It’s now a matter of remorseless logic that interest rates cannot fall below zero, more quantitative easing/liquidity is failing to turn things around and, at some point, what must happen will happen.

[CA renter]

[quote=Allan from Fallbrook][quote=briansd1]Actually, Krugman was right. Bold government action, such as foerign exchange controls, helped Iceland do better than the Baltics.

The same was true with Malaysia during the Asian financial crisis.

Doing something is better than doing nothing.[/quote]

Brian: A post which completely ignores two BIG facts: The Crash of 2008 and subsequent events (including the Eurozone crisis at present) completely dwarf the Asian Currency Crisis, LTCM, etc and “bold government action”, which did stabilize events in 2008, is now a game of diminishing returns, largely because the respective governments and central banks (Fed and ECB) are running out of bullets.

Interest rates have been slashed, various stabilization programs and policies have been enacted and trillions of dollars and Euros have been pumped into the respective economies, financial systems, etc and we’re now approaching a point where there will be no bullets left in the gun.

It’s now a matter of remorseless logic that interest rates cannot fall below zero, more quantitative easing/liquidity is failing to turn things around and, at some point, what must happen will happen.[/quote]

IMHO, the stimulative measures didn’t work (and will have negative consequences in the long run) is because they never correctly identified the problem. They were operating under the assumption that there was a liquidity crisis. Nothing could have been further from the truth. We have a *solvency* crisis, and that demands a totally different set of solutions

Their “fixes” have exacerbated the problems (wealth and income gap is at levels that cannot be sustained, and this is the core of our problems), and they have saddled us with even more debt — especially govt debt — when what we needed was debt default and tax/trade reform..

[Anonymous]

[quote=Allan from Fallbrook][quote=briansd1]Actually, Krugman was right. Bold government action, such as foerign exchange controls, helped Iceland do better than the Baltics.

The same was true with Malaysia during the Asian financial crisis.

Doing something is better than doing nothing.[/quote]

Brian: A post which completely ignores two BIG facts: The Crash of 2008 and subsequent events (including the Eurozone crisis at present) completely dwarf the Asian Currency Crisis, LTCM, etc and “bold government action”, which did stabilize events in 2008, is now a game of diminishing returns, largely because the respective governments and central banks (Fed and ECB) are running out of bullets.

Interest rates have been slashed, various stabilization programs and policies have been enacted and trillions of dollars and Euros have been pumped into the respective economies, financial systems, etc and we’re now approaching a point where there will be no bullets left in the gun.

It’s now a matter of remorseless logic that interest rates cannot fall below zero, more quantitative easing/liquidity is failing to turn things around and, at some point, what must happen will happen.[/quote]

Brian:

“Doing something is better than doing nothing.”

Allan:

“I have no recommended course of action, but I’m gonna keep whining about the situation.”

At least someone in this conversation understands what leadership is all about.

[scaredyclassic]

the truth is, in many things in life, doing nothing is far preferable to doing something.

i think there’s a compelling argument for doing nothing in this area also.

leadership feels it has to do something.

i wonder if there’s room in the USA for a Zen party.

We Will Do Nothing.

[Anonymous]

I actually agree that “doing nothing” (i.e. the US not intervening in the European crisis) is the best course of action.

But there’s a difference between making a decision to do nothing, and making no decision at all.

[scaredyclassic]

most of my best decisions have been to do nothing.

[scaredyclassic]

I am considering running on this platform. I doubt it will work at the local political level. I think I need to make a direct run for the presidency.

The Zen of the Barbell

I will not decide to make zen weightlifting nonmandatory and america will be strong again or not. But it will definitely be.

[mike92104]

[quote=briansd1][quote=poorgradstudent]Increasing government spending during down times and decreasing during good times also makes good fiscal sense. Labor and materials tend to be cheaper during busts, so important government infrastructure projects should be able to be completed at lower cost than they would if done during a boom. Also, borrowing costs are often cheaper during downtimes, so it actually makes a ton of good sense to complete necessary projects during recessions as opposed to trying to do them when things are good.[/quote]

I will try to live by this in my own life. Save during good times and buy assets during the down cycles. It’s a little hard to do because everybody does the opposite. People party during the good years and if you don’t join them you will have few friends.[/quote]

I don’t think you could have summed up Livinincali’s point better.

[Author]

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