Paul Krugman has officially lost all credibility

[briansd1]

Consider first the current uproar over the declining international value of the dollar.

The truth is that the falling dollar is good news. For one thing, it’s mainly the result of rising confidence: The dollar rose at the height of the financial crisis as panicked investors sought safe haven in America, and it’s falling again now that the fear is subsiding. And a lower dollar is good for U.S. exporters, helping us make the transition away from huge trade deficits to a more sustainable international position.

In this instance I believe the Krugman is correct.

There is rising confidence, but not in the US Dollar.

A cheaper dollar is good for American exporters, but it’s certainly not good for us, Americans, to maintain a standard of living that is proportionately higher than that of others around the world.

Americans will have to accept that they are just ordinary, and not so much better than other people in the world.

The way we see ourselves is not so much based on what we have, but how much more we have relative to others.

American dominance is eroding but perhaps that’s what it takes to pay off our debts and maintain what we have.

[Rich Toscano]

UR – When Krugman was cheering on ultra-easy monetary policy after the dot com crash (and then bemoaning the slightly less ultra-easy policy in 2004), he was oblivious to the distortions all that money and credit creation were causing (the housing bubble was already raging in 04), and to the problems they’d eventually cause.

Now he’s doing it again. This time around, our own currency is at risk. I agree that no dramatic consequences have happened yet, but I believe they are baked into the cake and that Krugman-esque policy will eventually be looked at as a giant, tragic mistake.

Rich

[Rich Toscano]

UR – When Krugman was cheering on ultra-easy monetary policy after the dot com crash (and then bemoaning the slightly less ultra-easy policy in 2004), he was oblivious to the distortions all that money and credit creation were causing (the housing bubble was already raging in 04), and to the problems they’d eventually cause.

Now he’s doing it again. This time around, our own currency is at risk. I agree that no dramatic consequences have happened yet, but I believe they are baked into the cake and that Krugman-esque policy will eventually be looked at as a giant, tragic mistake.

Rich

[Rich Toscano]

UR – When Krugman was cheering on ultra-easy monetary policy after the dot com crash (and then bemoaning the slightly less ultra-easy policy in 2004), he was oblivious to the distortions all that money and credit creation were causing (the housing bubble was already raging in 04), and to the problems they’d eventually cause.

Now he’s doing it again. This time around, our own currency is at risk. I agree that no dramatic consequences have happened yet, but I believe they are baked into the cake and that Krugman-esque policy will eventually be looked at as a giant, tragic mistake.

Rich

[Rich Toscano]

UR – When Krugman was cheering on ultra-easy monetary policy after the dot com crash (and then bemoaning the slightly less ultra-easy policy in 2004), he was oblivious to the distortions all that money and credit creation were causing (the housing bubble was already raging in 04), and to the problems they’d eventually cause.

Now he’s doing it again. This time around, our own currency is at risk. I agree that no dramatic consequences have happened yet, but I believe they are baked into the cake and that Krugman-esque policy will eventually be looked at as a giant, tragic mistake.

Rich

[Rich Toscano]

UR – When Krugman was cheering on ultra-easy monetary policy after the dot com crash (and then bemoaning the slightly less ultra-easy policy in 2004), he was oblivious to the distortions all that money and credit creation were causing (the housing bubble was already raging in 04), and to the problems they’d eventually cause.

Now he’s doing it again. This time around, our own currency is at risk. I agree that no dramatic consequences have happened yet, but I believe they are baked into the cake and that Krugman-esque policy will eventually be looked at as a giant, tragic mistake.

Rich

[Eugene]

Falling dollar is good news. You don’t need Krugman to tell you that.

Your standard of living is in large part what you create for yourselves. Does Nigeria have low standard of living because their currency is too low? Or are there other factors at play?

Did American standard of living fall through the floor after Plaza Accord of 1985, when a bunch of bankers of the world came together and decided officially to devalue the dollar 2.5 times? Imagine that today is 1985, Volcker is the chairman of the Fed, and Krugman is in the background cheering him on. What dirty words would you think of for Volcker and Krugman? And yet you’d be wrong.

Yes – some imports will be more expensive, but imports aren’t a big spending category in anyone’s budget. (You’ll have to pay $30 instead of $20 for a pair of jeans! The horror!) Except oil. But oil prices are so unstable that you can’t predict them anyway. In exchange, you expand exports, you create jobs, and you get healthier overall economy.

[Eugene]

Falling dollar is good news. You don’t need Krugman to tell you that.

Your standard of living is in large part what you create for yourselves. Does Nigeria have low standard of living because their currency is too low? Or are there other factors at play?

Did American standard of living fall through the floor after Plaza Accord of 1985, when a bunch of bankers of the world came together and decided officially to devalue the dollar 2.5 times? Imagine that today is 1985, Volcker is the chairman of the Fed, and Krugman is in the background cheering him on. What dirty words would you think of for Volcker and Krugman? And yet you’d be wrong.

Yes – some imports will be more expensive, but imports aren’t a big spending category in anyone’s budget. (You’ll have to pay $30 instead of $20 for a pair of jeans! The horror!) Except oil. But oil prices are so unstable that you can’t predict them anyway. In exchange, you expand exports, you create jobs, and you get healthier overall economy.

[Eugene]

Falling dollar is good news. You don’t need Krugman to tell you that.

Your standard of living is in large part what you create for yourselves. Does Nigeria have low standard of living because their currency is too low? Or are there other factors at play?

Did American standard of living fall through the floor after Plaza Accord of 1985, when a bunch of bankers of the world came together and decided officially to devalue the dollar 2.5 times? Imagine that today is 1985, Volcker is the chairman of the Fed, and Krugman is in the background cheering him on. What dirty words would you think of for Volcker and Krugman? And yet you’d be wrong.

Yes – some imports will be more expensive, but imports aren’t a big spending category in anyone’s budget. (You’ll have to pay $30 instead of $20 for a pair of jeans! The horror!) Except oil. But oil prices are so unstable that you can’t predict them anyway. In exchange, you expand exports, you create jobs, and you get healthier overall economy.

[Eugene]

Falling dollar is good news. You don’t need Krugman to tell you that.

Your standard of living is in large part what you create for yourselves. Does Nigeria have low standard of living because their currency is too low? Or are there other factors at play?

Did American standard of living fall through the floor after Plaza Accord of 1985, when a bunch of bankers of the world came together and decided officially to devalue the dollar 2.5 times? Imagine that today is 1985, Volcker is the chairman of the Fed, and Krugman is in the background cheering him on. What dirty words would you think of for Volcker and Krugman? And yet you’d be wrong.

Yes – some imports will be more expensive, but imports aren’t a big spending category in anyone’s budget. (You’ll have to pay $30 instead of $20 for a pair of jeans! The horror!) Except oil. But oil prices are so unstable that you can’t predict them anyway. In exchange, you expand exports, you create jobs, and you get healthier overall economy.

[Eugene]

Falling dollar is good news. You don’t need Krugman to tell you that.

Your standard of living is in large part what you create for yourselves. Does Nigeria have low standard of living because their currency is too low? Or are there other factors at play?

Did American standard of living fall through the floor after Plaza Accord of 1985, when a bunch of bankers of the world came together and decided officially to devalue the dollar 2.5 times? Imagine that today is 1985, Volcker is the chairman of the Fed, and Krugman is in the background cheering him on. What dirty words would you think of for Volcker and Krugman? And yet you’d be wrong.

Yes – some imports will be more expensive, but imports aren’t a big spending category in anyone’s budget. (You’ll have to pay $30 instead of $20 for a pair of jeans! The horror!) Except oil. But oil prices are so unstable that you can’t predict them anyway. In exchange, you expand exports, you create jobs, and you get healthier overall economy.

[briansd1]

[quote=Eugene]
Did American standard of living fall through the floor after Plaza Accord of 1985, when a bunch of bankers of the world came together and decided officially to devalue the dollar 2.5 times? [/quote]

I didn’t say that Eugene.

Our standards of living did not fall and I don’t expect our standard of living to significant fall either.

I said that we will be less rich relative to others. American tourists won’t feel rich when they travel abroad.

American power (economic and military) is a function of how much superior we are to others. As our currency erodes, our world dominance and influence will erode as well.

Others will rise. We will remain the same. Psychologically, and ideologically we will feel diminished.

[briansd1]

[quote=Eugene]
Did American standard of living fall through the floor after Plaza Accord of 1985, when a bunch of bankers of the world came together and decided officially to devalue the dollar 2.5 times? [/quote]

I didn’t say that Eugene.

Our standards of living did not fall and I don’t expect our standard of living to significant fall either.

I said that we will be less rich relative to others. American tourists won’t feel rich when they travel abroad.

American power (economic and military) is a function of how much superior we are to others. As our currency erodes, our world dominance and influence will erode as well.

Others will rise. We will remain the same. Psychologically, and ideologically we will feel diminished.

[briansd1]

[quote=Eugene]
Did American standard of living fall through the floor after Plaza Accord of 1985, when a bunch of bankers of the world came together and decided officially to devalue the dollar 2.5 times? [/quote]

I didn’t say that Eugene.

Our standards of living did not fall and I don’t expect our standard of living to significant fall either.

I said that we will be less rich relative to others. American tourists won’t feel rich when they travel abroad.

American power (economic and military) is a function of how much superior we are to others. As our currency erodes, our world dominance and influence will erode as well.

Others will rise. We will remain the same. Psychologically, and ideologically we will feel diminished.

[briansd1]

[quote=Eugene]
Did American standard of living fall through the floor after Plaza Accord of 1985, when a bunch of bankers of the world came together and decided officially to devalue the dollar 2.5 times? [/quote]

I didn’t say that Eugene.

Our standards of living did not fall and I don’t expect our standard of living to significant fall either.

I said that we will be less rich relative to others. American tourists won’t feel rich when they travel abroad.

American power (economic and military) is a function of how much superior we are to others. As our currency erodes, our world dominance and influence will erode as well.

Others will rise. We will remain the same. Psychologically, and ideologically we will feel diminished.

[Author]

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