Paul Krugman has officially lost all credibility

[meadandale]

[quote=Eugene]
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!) [/quote]

This is naive thinking at best.

Many people in this country shop at Wally World, or a similar equivalent. Most of the merchandise in these stores is imported. We also rely heavily on imported produce from the southern hemisphere and may increase our dependence on them now that CA is rationing water to the central valley and CA agriculture is literally drying up.

The good ‘ol US of A manufactures very little anymore..when we are buying all this stuff overseas with a devalued dollar your standard of living will most certainly drop…unless you are invested in foreign markets and currencies.

[briansd1]

[quote=Eugene]
Superiority is about skills, technologies, and capital, not relative prices of hotel rooms. Arguably, what’s gained from the cheap gas for SUVs and cheap entertainment for tourists is more than offset by skills and capital that was lost when manufacturing was outsourced to China.[/quote]

What do we produce now that we use every day? Health care perhaps. So let’s expand health care and create a health care economic bubble.

The question is do you want to work and earn what you need or would you rather print-out dollar bills to pay for what you want?

It’s been a good deal for America so far where all we had to do was conjure up money to exchange for what we want.

It comes down to the generational quandary. Do we want to work hard so that our kids and grand-kids inherit a better world? Or do we enjoy ourselves now first?

Krugman seems to say “let’s kick the can down the road” to the next Republican administration. Give people what they want now (health care, housing v-shaped recovery, low taxes) and take care of Obama’s agenda. That was pretty much what Reagan did. So why not Obama? After all you’re never popular when you ask people to tighten their belts.

Once what’s done is done, Obama’s successor will be faced with a fait-accompli which will be his and his alone to fix. And once socialized medicine is part of our culture, nobody will want to ever give it up (just like medicare).

Brilliant political strategy. Bravo!! I would support it through 2012. 😉

[briansd1]

[quote=Eugene]
Superiority is about skills, technologies, and capital, not relative prices of hotel rooms. Arguably, what’s gained from the cheap gas for SUVs and cheap entertainment for tourists is more than offset by skills and capital that was lost when manufacturing was outsourced to China.[/quote]

What do we produce now that we use every day? Health care perhaps. So let’s expand health care and create a health care economic bubble.

The question is do you want to work and earn what you need or would you rather print-out dollar bills to pay for what you want?

It’s been a good deal for America so far where all we had to do was conjure up money to exchange for what we want.

It comes down to the generational quandary. Do we want to work hard so that our kids and grand-kids inherit a better world? Or do we enjoy ourselves now first?

Krugman seems to say “let’s kick the can down the road” to the next Republican administration. Give people what they want now (health care, housing v-shaped recovery, low taxes) and take care of Obama’s agenda. That was pretty much what Reagan did. So why not Obama? After all you’re never popular when you ask people to tighten their belts.

Once what’s done is done, Obama’s successor will be faced with a fait-accompli which will be his and his alone to fix. And once socialized medicine is part of our culture, nobody will want to ever give it up (just like medicare).

Brilliant political strategy. Bravo!! I would support it through 2012. 😉

[briansd1]

[quote=Eugene]
Superiority is about skills, technologies, and capital, not relative prices of hotel rooms. Arguably, what’s gained from the cheap gas for SUVs and cheap entertainment for tourists is more than offset by skills and capital that was lost when manufacturing was outsourced to China.[/quote]

What do we produce now that we use every day? Health care perhaps. So let’s expand health care and create a health care economic bubble.

The question is do you want to work and earn what you need or would you rather print-out dollar bills to pay for what you want?

It’s been a good deal for America so far where all we had to do was conjure up money to exchange for what we want.

It comes down to the generational quandary. Do we want to work hard so that our kids and grand-kids inherit a better world? Or do we enjoy ourselves now first?

Krugman seems to say “let’s kick the can down the road” to the next Republican administration. Give people what they want now (health care, housing v-shaped recovery, low taxes) and take care of Obama’s agenda. That was pretty much what Reagan did. So why not Obama? After all you’re never popular when you ask people to tighten their belts.

Once what’s done is done, Obama’s successor will be faced with a fait-accompli which will be his and his alone to fix. And once socialized medicine is part of our culture, nobody will want to ever give it up (just like medicare).

Brilliant political strategy. Bravo!! I would support it through 2012. 😉

[briansd1]

[quote=Eugene]
Superiority is about skills, technologies, and capital, not relative prices of hotel rooms. Arguably, what’s gained from the cheap gas for SUVs and cheap entertainment for tourists is more than offset by skills and capital that was lost when manufacturing was outsourced to China.[/quote]

What do we produce now that we use every day? Health care perhaps. So let’s expand health care and create a health care economic bubble.

The question is do you want to work and earn what you need or would you rather print-out dollar bills to pay for what you want?

It’s been a good deal for America so far where all we had to do was conjure up money to exchange for what we want.

It comes down to the generational quandary. Do we want to work hard so that our kids and grand-kids inherit a better world? Or do we enjoy ourselves now first?

Krugman seems to say “let’s kick the can down the road” to the next Republican administration. Give people what they want now (health care, housing v-shaped recovery, low taxes) and take care of Obama’s agenda. That was pretty much what Reagan did. So why not Obama? After all you’re never popular when you ask people to tighten their belts.

Once what’s done is done, Obama’s successor will be faced with a fait-accompli which will be his and his alone to fix. And once socialized medicine is part of our culture, nobody will want to ever give it up (just like medicare).

Brilliant political strategy. Bravo!! I would support it through 2012. 😉

[briansd1]

[quote=Eugene]
Superiority is about skills, technologies, and capital, not relative prices of hotel rooms. Arguably, what’s gained from the cheap gas for SUVs and cheap entertainment for tourists is more than offset by skills and capital that was lost when manufacturing was outsourced to China.[/quote]

What do we produce now that we use every day? Health care perhaps. So let’s expand health care and create a health care economic bubble.

The question is do you want to work and earn what you need or would you rather print-out dollar bills to pay for what you want?

It’s been a good deal for America so far where all we had to do was conjure up money to exchange for what we want.

It comes down to the generational quandary. Do we want to work hard so that our kids and grand-kids inherit a better world? Or do we enjoy ourselves now first?

Krugman seems to say “let’s kick the can down the road” to the next Republican administration. Give people what they want now (health care, housing v-shaped recovery, low taxes) and take care of Obama’s agenda. That was pretty much what Reagan did. So why not Obama? After all you’re never popular when you ask people to tighten their belts.

Once what’s done is done, Obama’s successor will be faced with a fait-accompli which will be his and his alone to fix. And once socialized medicine is part of our culture, nobody will want to ever give it up (just like medicare).

Brilliant political strategy. Bravo!! I would support it through 2012. 😉

[urbanrealtor]

[quote=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[/quote]
Yeah I get that you don’t like him but I am curious how you see them baked into the cake.

You have described many time the imminence of a pronounced inflationary event (at least that is how I remember it–there was alcohol) but I would really like to see what the model you are using looks like when it is unpacked. I am actually not necessarily in disagreement with it. Its just that he is (in this particular case) better at drawing out his ideas than you have been.

For example do you see the enhanced monetary base getting recklessly lent out at high speed to increase global effective demand at a nominal level?

Or do you see us needing to jack up rates on govt securities to pay paul?

While I often disagree with you, you don’t generally see boogeymen.

Tell me what you are seeing. I have read the other articles on this topic and found them less illuminating than what I am looking for.

I just want an idea of what you see as the steps here.

Putting that differently:
How exactly do we crash the plane into the mountain??

Also, please call me Dan.

[urbanrealtor]

[quote=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[/quote]
Yeah I get that you don’t like him but I am curious how you see them baked into the cake.

You have described many time the imminence of a pronounced inflationary event (at least that is how I remember it–there was alcohol) but I would really like to see what the model you are using looks like when it is unpacked. I am actually not necessarily in disagreement with it. Its just that he is (in this particular case) better at drawing out his ideas than you have been.

For example do you see the enhanced monetary base getting recklessly lent out at high speed to increase global effective demand at a nominal level?

Or do you see us needing to jack up rates on govt securities to pay paul?

While I often disagree with you, you don’t generally see boogeymen.

Tell me what you are seeing. I have read the other articles on this topic and found them less illuminating than what I am looking for.

I just want an idea of what you see as the steps here.

Putting that differently:
How exactly do we crash the plane into the mountain??

Also, please call me Dan.

[urbanrealtor]

[quote=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[/quote]
Yeah I get that you don’t like him but I am curious how you see them baked into the cake.

You have described many time the imminence of a pronounced inflationary event (at least that is how I remember it–there was alcohol) but I would really like to see what the model you are using looks like when it is unpacked. I am actually not necessarily in disagreement with it. Its just that he is (in this particular case) better at drawing out his ideas than you have been.

For example do you see the enhanced monetary base getting recklessly lent out at high speed to increase global effective demand at a nominal level?

Or do you see us needing to jack up rates on govt securities to pay paul?

While I often disagree with you, you don’t generally see boogeymen.

Tell me what you are seeing. I have read the other articles on this topic and found them less illuminating than what I am looking for.

I just want an idea of what you see as the steps here.

Putting that differently:
How exactly do we crash the plane into the mountain??

Also, please call me Dan.

[urbanrealtor]

[quote=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[/quote]
Yeah I get that you don’t like him but I am curious how you see them baked into the cake.

You have described many time the imminence of a pronounced inflationary event (at least that is how I remember it–there was alcohol) but I would really like to see what the model you are using looks like when it is unpacked. I am actually not necessarily in disagreement with it. Its just that he is (in this particular case) better at drawing out his ideas than you have been.

For example do you see the enhanced monetary base getting recklessly lent out at high speed to increase global effective demand at a nominal level?

Or do you see us needing to jack up rates on govt securities to pay paul?

While I often disagree with you, you don’t generally see boogeymen.

Tell me what you are seeing. I have read the other articles on this topic and found them less illuminating than what I am looking for.

I just want an idea of what you see as the steps here.

Putting that differently:
How exactly do we crash the plane into the mountain??

Also, please call me Dan.

[urbanrealtor]

[quote=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[/quote]
Yeah I get that you don’t like him but I am curious how you see them baked into the cake.

You have described many time the imminence of a pronounced inflationary event (at least that is how I remember it–there was alcohol) but I would really like to see what the model you are using looks like when it is unpacked. I am actually not necessarily in disagreement with it. Its just that he is (in this particular case) better at drawing out his ideas than you have been.

For example do you see the enhanced monetary base getting recklessly lent out at high speed to increase global effective demand at a nominal level?

Or do you see us needing to jack up rates on govt securities to pay paul?

While I often disagree with you, you don’t generally see boogeymen.

Tell me what you are seeing. I have read the other articles on this topic and found them less illuminating than what I am looking for.

I just want an idea of what you see as the steps here.

Putting that differently:
How exactly do we crash the plane into the mountain??

Also, please call me Dan.

[Rich Toscano]

Dan (I called you UR so people would know which post I was responding to) —

Basically, I think the Krugmans of the world are looking at things like low capacity utilization, low velocity, etc, and assuming that purchasing power cannot decline. This conclusion rests on the assumption that foreigners will continue to lend us simply vast amounts of money, despite the fact that we are so deeply in debt that there really isn’t a credible and politically feasible way to pay it off in real terms. I just disagree with this conclusion because the math doesn’t add up. Neither the USD nor Treasuries are a viable store of value; I just think it’s a matter of time before the world realizes that.

I think there is a US funding crisis in the offing (not necessarily imminent, just to be clear about that). The results of a funding crisis would be a weaker dollar (higher import and commodity prices in US$ terms) and higher rates. There is already precedent for the Fed monetizing debt to bring down rates and fill the gap where foreign inflows have not been sufficient to finance our deficit; I think this will increase into any funding crisis, especially if it happens against the backdrop of weak employment. If that were the case, rates might not rise as much, but it would result in an even weaker dollar.

I apologize, I don’t have much time today so I can’t give the response it deserves… hopefully the above at least gives an inkling of where I am coming from.

Rich

[Rich Toscano]

Dan (I called you UR so people would know which post I was responding to) —

Basically, I think the Krugmans of the world are looking at things like low capacity utilization, low velocity, etc, and assuming that purchasing power cannot decline. This conclusion rests on the assumption that foreigners will continue to lend us simply vast amounts of money, despite the fact that we are so deeply in debt that there really isn’t a credible and politically feasible way to pay it off in real terms. I just disagree with this conclusion because the math doesn’t add up. Neither the USD nor Treasuries are a viable store of value; I just think it’s a matter of time before the world realizes that.

I think there is a US funding crisis in the offing (not necessarily imminent, just to be clear about that). The results of a funding crisis would be a weaker dollar (higher import and commodity prices in US$ terms) and higher rates. There is already precedent for the Fed monetizing debt to bring down rates and fill the gap where foreign inflows have not been sufficient to finance our deficit; I think this will increase into any funding crisis, especially if it happens against the backdrop of weak employment. If that were the case, rates might not rise as much, but it would result in an even weaker dollar.

I apologize, I don’t have much time today so I can’t give the response it deserves… hopefully the above at least gives an inkling of where I am coming from.

Rich

[Rich Toscano]

Dan (I called you UR so people would know which post I was responding to) —

Basically, I think the Krugmans of the world are looking at things like low capacity utilization, low velocity, etc, and assuming that purchasing power cannot decline. This conclusion rests on the assumption that foreigners will continue to lend us simply vast amounts of money, despite the fact that we are so deeply in debt that there really isn’t a credible and politically feasible way to pay it off in real terms. I just disagree with this conclusion because the math doesn’t add up. Neither the USD nor Treasuries are a viable store of value; I just think it’s a matter of time before the world realizes that.

I think there is a US funding crisis in the offing (not necessarily imminent, just to be clear about that). The results of a funding crisis would be a weaker dollar (higher import and commodity prices in US$ terms) and higher rates. There is already precedent for the Fed monetizing debt to bring down rates and fill the gap where foreign inflows have not been sufficient to finance our deficit; I think this will increase into any funding crisis, especially if it happens against the backdrop of weak employment. If that were the case, rates might not rise as much, but it would result in an even weaker dollar.

I apologize, I don’t have much time today so I can’t give the response it deserves… hopefully the above at least gives an inkling of where I am coming from.

Rich

[Rich Toscano]

Dan (I called you UR so people would know which post I was responding to) —

Basically, I think the Krugmans of the world are looking at things like low capacity utilization, low velocity, etc, and assuming that purchasing power cannot decline. This conclusion rests on the assumption that foreigners will continue to lend us simply vast amounts of money, despite the fact that we are so deeply in debt that there really isn’t a credible and politically feasible way to pay it off in real terms. I just disagree with this conclusion because the math doesn’t add up. Neither the USD nor Treasuries are a viable store of value; I just think it’s a matter of time before the world realizes that.

I think there is a US funding crisis in the offing (not necessarily imminent, just to be clear about that). The results of a funding crisis would be a weaker dollar (higher import and commodity prices in US$ terms) and higher rates. There is already precedent for the Fed monetizing debt to bring down rates and fill the gap where foreign inflows have not been sufficient to finance our deficit; I think this will increase into any funding crisis, especially if it happens against the backdrop of weak employment. If that were the case, rates might not rise as much, but it would result in an even weaker dollar.

I apologize, I don’t have much time today so I can’t give the response it deserves… hopefully the above at least gives an inkling of where I am coming from.

Rich

[Author]

Posts