City Journal Winter 2014

Current Issue:

Winter 2014
Table of Contents
Subscribe
Tablet Editions
Click to visit City Journal California

Readers’ Comments

Guy Sorman
Paul Krugman’s Follies « Back to Story

View Comments (81)

Add New Comment:

To send your message, please enter the words you see in the distorted image below, in order and separated by a space, and click "Submit." If you cannot read the words below, please click here to receive a new challenge.

Comments will appear online. Please do not submit comments containing advertising or obscene language. Comments containing certain content, such as URLs, may not appear online until they have been reviewed by a moderator.


 
Showing 81 Comment(s) Subscribe by RSS
Thanks, but your observations fall under the category "Bottom News of the Day."

It is not surprising that a Nobel Prize winner can publicly display intellectual dishonesty. I bet you can easily name two recent winners guilty of the same flaw.
instead of reading krugmans garbage...read "the forgotten man"....its fair and accurate...and you will plainly understand why krugmans a kook.
Krugman is an idiot and so is anyone who would spend there hard earned money on such tripe.
Pure Keynesian lunacy.

Once again, Paul Krugman repeatedly demonstrates he has NOT mastered ECON-101. This would be hilarious, if it were not so tragic.

Wayno
We are fast exhausting markets for our government securities, as China, Japan, and Saudi Arabia cannot continue to purchase Treasury issues forever. Then what, Mr. Krugman? Even should the doomsday scenario take decades to unfold, being at the mercy of overseas investors necessarily compromises our foreign policy options.
For the naifs here who cannot catch a glimpse of inflation, read my lips: Shadow banking. Look it up, and let your hair grow grey overnight.
to Ed Smith:

You do not know what austerity means. Once Kevin and Sharon not only cannot afford an expensive holiday but any holiday at all, that is austerity. Wait for that, then apply your yardstick.
I'm just wondering if there's ever been a case of Keynesian stimulus actually doing what it's supposed - stimulating an economy out of recession/depression and into prosperity?

I know there are all sorts of excuses why the New Deal didn't result in prosperity but it didn't so that's not an example. I know the Japanese engaged in a lengthy bout of Keynesian pump-priming that's referred to as "the lost decade" so I'm pretty sure that's not an example of Keynesian success.

So, examples?
Dear Guy,
Please keep writing and exposing this Keynesian nonsense. One doesn't need a Nobel prize to recognize that government spending does not create ongoing entities that will support employment and a growing economy over the long run. Krugman seems to miss that there is a great deal of pent up demand for cars, homes, and every other item people want, just waiting to fuel private sector growth. Confidence in our leaders and a vision of a solid economic future are sorely missing.
We will add Mr. Sorman's name to the "jealous of Professor Krugman" list.
Paul Krugman is a well known fool and a very wealthy hypocrite. But this writer? What does it mean to be a "French public intellectual"? That's actually a very funny thing to write/say.
You obviously didn't read the book you're commenting on, because Prof. Krugman dismantled each of these objections there.
B. Samuel Davis June 26, 2012 at 3:42 PM
More growth than inflation? I think not.

Our food bills have gone through the roof since Obama got into office, as have gas prices.
Here are two simple quotes from the article:

"Milton Friedman and the late Anna Schwartz, ...showed that excessive money printing, which Krugman strongly recommends, always leads to inflation, not growth."

"...Obama has already tried to rekindle growth this way."

Now, everyone who rationally examines the result of Obama's spending has to agree that, while there has been little inflation and growth recently, overall, there has been more growth than inflation.

...and because of that, I find this entire diatribe faulty and misguided.
Krugman is fond of citing WWII government spending for lifting the U.S. out of the Depression.

He conveniently forgets to mention it was also a time of wage/price controls----and rationing.
What Mr. Krugman's glib, but fact-challenged critics fail to acknowlege is that right now declining revenue, not excessive spending is the principle cause of government budget deficits. Revenue is declining because economies are slowing and unemployment is growing. Fiscal policy is meant to be counter-cyclical and not pro-cyclical. Conservatives and Austerians have put the world in a downward spiral where we enact spending cuts in response to deficits, which contribute to high unemployment, which reduced economic activity, which reduce government revenue which create more deficits, which lead to more spending cuts. Rinse, wash, repeat.
Krugman has a unique talent: Whenever he writes something, he subtracts from the sum total of human knowledge. Not everyone can do that.
"Public spending would be not only efficient, Krugman contends, but ethical."

This could not be more wrong it, government spending is inherently inefficient and deficit spending at this debt level is clearly immoral.
The U.S. government already spends $1.3 trillion each year above and beyond tax receipts.

If that isn't classic Keynesean stimulus, what is?
I love of the liberal's comments to this article. "Oh yeah?" they sneer. "Then how come austerity is failing so miserably in Europe. I mean, sure Greece got into the mess by spending 150% of it's budget for decades. It only makes that since that destroyed their economy by spending, they should can only get out by spending massively more." Seriously. That is the crux of their argument. That's like an obese man saying, "Well, I ate too much. The only choice I have is act like a Krugmanian liberal and eat even more."
Anyone who has read Kruggy's articles can attest that he is ignorant of the Keynesian framework he so desperately promotes. Exhibit A: for govt to stoke aggregate demand, treasury surplus (ie national savings) must be used. Deficit spending will not work becuase of the crisis in confidence it triggers. Can he not grasp this or is he chosing to ignore basic Keynes dogma for convenience? As for the Nobel prize it is nothing more than a beauty contest amongst the international Revenge of the Nerd elite.
christopher mahoney June 26, 2012 at 12:12 AM
Keynesian stimulus is wasteful, ineffective, and deeply unfair to our children. But monetary stimulus can be crucial, which Friedman believed. Remember, he blamed the Fed for the Depression, not Hoover. The Fed controls nominal GDP, and it has dropped the ball. Read Bernanke's Japan speeches for what he should be doing.
Awful article, really misses the point and manipulates the message.
This is an excellent review that touches on the trouble with keynesian theory: It is an excuse for wild spenders to spend wildly. The of Krugman's argument is that public spending is the same as private spending because it's all part of GNP. This fails to note that public spending is financed from taking taxes from GNP for a true "zero sum" transaction. Any multipliers thought to exist when spending was almost 100% US goods and energy say in the 1950's for public spending is going to substantial degree to imported goods, energy and foreign recipients of government debt so even that fundamental idea of Keynesian public spending is out the window. It comes out of taxes and leaves the country and no multipler exists. Investment capital spending by a US enterprise is for an asset which is more likely US made by US workers in US factories and generates a rate of return over its life rather than being spent once and exported. US workers are needed to run the machine. This is fundamentally different and failing to understand this cynical dishonesty on Krugman's part.
The author apparently either does not trust his own senses or is unaware that the flip side of what Krugman proposes is the economic policies of austerity that France (until the recent elections) and Germany have imposed on the likes of Greece, Spain and Italy.

This policy has choked off government revenue and made southern European nations even more unable to pay off their obligations. At this point it is clear continued austerity cannot work (and for some of us it was clear it could never work in the first place).

But apparently it works in Mr. Sorman's mind.
Pierre: In the year 2000 the entire national debt was projected to be paid off by 2011. "Obviously this didn't happen" - we all know why, don't we? You take Laffer, I'll take Krugman.
I find this review of Dr. Krugman's book less than useless. I wish I had the 5 minutes it took for me to read this back, plus 5 minutes for feeling the need to post this comment. Guy Sorman clearly a free 15 minutes it would take to examine a GDP chart of European nations to see that austerity has been a massive failure in Europe. Further, a simple look at any inflation index in the US shows that inflation has not occurred here (despite the stimulus and extremely large monetary expansion of the Fed). Instead of refuting Dr. Krugman's claims with facts (which Mr. Sorman clearly can't bother himself with), he chooses to repeat common misconceptions. Bravo.
The neccessary context missing from this analysis is the fact that the world economy is on the verge of falling into a deflationary spiral and depression. In such circumstances inflationary fiscal policy isn't dangerous, but appropriate. Once the economy starts growing again and on firmer footing than we can pull back. Remember every ratio has a denominator and a numerator. High Debt to GDP levels and deficits are not only caused excessive spending but also by inadequete revenue.
Beautiful essay. Thank you.
Yeah, well Paul should move to Athens. I understand after decades of fun the Greeks will exit the Euro and have even more fun with the newly launched Drachma II. The Greeks could really use him over there because he is one money, party fella.
Does Krugs think he is anywhere near in the same league as Keynes, or for that matter Freidman or Hayek? He is nowhere close.

As someone below noted, a critical part of Keynes theory was that when recessions were over Govt would pay down debt. This has obviously not happened.

There is no reason to believe that if Keynes were looking at the set of variables currently on the table, that he would recommend more debt spending.
Bridges and roads- yes these need to be repaired. We pay taxes for this. Also, for stuff that was so dire that regular taxes couldn't cover them, we forked over $800B for supposedly shovel ready projects. Then we found out that the jobs weren't really shovel ready. So where did the money go? Obama and his brand of fiscal stimulus has lost all credibility. We were duped. Obama's black hole of stimulus has probably done more to smother the appetite for infrastructure spending that any conservative spend-thrift ever could.
What a great article. Krugman is such a loser.
Thanks for the review. Paul Krugman is more than a hack. Krugman needs to be confronted and debunked at every turn because he has become the leading economic thinker on the left and influences both policy makers and the masses. He is dangerous because the ideas he promotes encourage irresponsible economic behavior which, as this author notes, will only make the problem worse in the end.
Whenever I read new Krugman prognostications I think of his dismissal of e-commerce as "fanciful" - nothing that would ever create meaningful jobs. An argument that allowed him spew "Mc-jobs" derision of George H. Bush's 5% unemployment rate.

Krugman is at least a predictable loose cannon - shoots at anything that reflects positively on opponents. And if it causes him to conclude that this e-commerce thing will never catch on, well, just a casualty of war.





Austerity has had marvelous results in the UK, which has now officially entered a new recession.
I keep hearing about infrastructure repair and maintenience in the comments. I believe we already pay taxes for infrastructure maintenence. Where is this money going? Every time I stop at a gas pump I pay State and Federal taxes just for this purpose and when I pay income taxes in April part of that money is supposed to go for infrastructure. Why isn't this money being used for the purposes it was designed for?
John Galt: The economy was not in free fall in 1980. Much of what was occurring was due to deliberate Fed policies. In any case, Reagan TRIPLED the national debt - i.e.- he was a stimulus president.
Weak. "Crisis of confidence" -? This guy does not have the intellectual heft to take on Krugman. Not even close.
There are two historical precedents for Krugman's suggestions. First the policies of FDR, which turned a recession into a multiyear Great Depresssion. The other the policies of Ronald Reagan who took an economy in free fall with high unemployment, high gas prices, and massive inflation, and in a short time got the economy taking off like a rocket. By choosing the FDR model, Krugman loses all right to call himself an economist, nor even pundit. I'd suggest Progressive Polemicist...
Krugman would reply that the rational expectations argument does not apply to the short term stimulus needed to escape a recession. The problem with the stimulus is that it was too heavy on ineffectual tax cuts. We will get lots more of these if the Republicans win the election.
Mr. Sorman ignores the need to repair the many worn out roads, bridges, dams and levies in the U.S. Will the private sector do this?
Von Mises identified the Keynesians as "political economists", as opposed to economic scientists, who were quickly embraced by politicians who could use them to justify their profligate ways. Krugman has been a hero of the left who have similarly helped them justify govt policies that are bankrupting us. Amazing that it only requires common sense to dismiss his prescriptions/ remedies.
Ironic that the left made the Bush deficit one of the main focuses of their campaign to regain their power and now that the American people are aware of the huge disparity between our nations debt to income income ratio the Keynesian model breaks down due to a lack of consumer confidence which they themselves created in their campaign. Prior to the 2008 campaign the average consumer didnt care a rat's butt about deficit, gdp or national debt. Now thanks to Democrats they do. The left cut their own throat and the throat of the US economy. In my view this is a good thing. At least we can return to the principles of how an economy REALLY is supposed to work thru actual, instead of artificial, supply/demand.
The big mistake everyone seems to make is comparing our economy now to the 30s-80s. Back then companies and the rich were not going to leave the US for better tax climates. They were stuck with whatever tax rate the Feds wanted to charge. Now that has all changes as people and companies will go to a location that makes sense and has lower taxes. States are seeing the effects of that with migrations of companies and people to better tax locales. Some of the rich are moving offshore and that will only increase given France;s tax increase on the rich to 75% of anything over 1 million. Keynes may have been able to fix things when the companies and people were trapped. But as we see in Greece, Spain, France, Italy and the US, when you increase taxes to unreasonable levels, companies, jobs and people will move if they can. It looks like Krugman, Greece, France and the US don't learn ans it will always be someone elses fault.
paul krugman A:
we need economic growth at all costs. ignore the deficits.

paul krugman B:
we cannot have tax cuts, because they will explode our deficits.


Keynsian "solutions" were also tried by Hoover and FDR and failed to bring us out of the Great Depression. Nixon also applied Keynsian solutions in the '70's and we got stagflation, no growth, no innovation, no wealth creation. Get rid of debt, turn entrepreneurs loose, get out of their way -- that's what works!
Couple of comments: the Nobel prize is not very interesting at this point. Calling it a mark in Paul Krugman's favor or against him is just appeal to authority - can we just not bother.

"Where is the inflation..." Inflation is just a function of supply and demand. We already know where the demand is - China buying a bunch of our debt to keep the debt they currently hold from becoming worthless. At the moment the benefit they get from that is the ability to destroy our economy at a moments notice. Our hope of them not doing so is based on a MAD type of thinking. Why is this an argument in favor of printing more money?

@hhn - I like your comment because it focuses on a more general question which lies behind a number of bitter arguments. Your dichotomy is pretty poor, though - the only possibilities are a military junta and a nanny-state. Among other things it ignores our current education system. The public schools in my town are funded with money from my town, debated at board of ed meetings and town meetings in my town, with no positive contributions, but many negative contributions, from the federal government. This is distributed government, where items that do not need and do not benefit from federal involvement are left to more local (state, county or town/city) government. It generally allows these items to have more direct and effective design and oversight. In the US Constitution it is described in the tenth ammendment. At the heart of many disputes is the fact that many people feel the list of powers granted to the federal government by the Constitution should be much broader than it actually is, and pretend that making silly arguments about "the commerce clause" makes all limitations of federal powers go away (witness the AHA arguments at the Supreme Court). The better approach would be to debate what additional powers the federal government should be granted and write an ammendment for it. This would limit power, corruption and money in DC, though, so it will not be driven by DC.
World War II did not end the great depression. It reduced unemployment, but only because all the young men were sent to fight oversees. The economy recovered after the war when many of the Roosevelt era regulations and price controls were lifted.
Donavan Lemaster June 25, 2012 at 11:30 AM
So where is the inflation from the first stimulus? If it "always" leads to inflation? We clearly could use moderately higher inflation now because it is the clearest solution to the debt problem. Having read the whole book, you only bring up arguments that he refutes in this article while concurrently not bringing up his refutations. In his book, he gave you and beliefs similar to you a voice which you failed to do likewise.
why is it so hard for seemingly intelligent men like Krugman to see that taking water out of one end of the pool and pouring it into the other end doesn't nothing more than get water spilt in the transition? Why do the continually hang their hat on 'demand side' economics when history clearly showes us that it is the production (supply) side that drives prosperity. Apple didn't start making IPads because there was a demand, customers started buying them because it was a useful product!
Mr. Krugman's position that "The government must simply spend more, because the American consumer is spending less." is akin to a doctor treating the symptom and not the disease. So, Mr. Krugman is basically saying. "You have a painfully cancerous leg? Take these aspirin and call me in the morning, assuming you live that long." It's time that the public amputate a sizable chunk of our cancerous government. Yes, it will be painful for a while and we will need to learn to walk again, but this is the only way we are going to survive.
This author is unable to accept and or understand reality so he projects his misunderstanding onto Krugman, with statements like Krugmans follies and Krugman lives in an unreal world. It is the author who follies and lives in an unreal world.
"Where are the high interest rates and high inflation that Krugman's critics have predicted?"

I think it obvious that US Treasuries have become a very unusual safe haven --- a safe haven that's not all that safe, but better than all the other ones available.

It is therefore reasonable to answer your question by saying "on its way." Economics is never understood through snapshots, but as a free flow and constant changing stream of data.

Or, if you prefer, we can decide that Econ 101 is wrong to teach that currency dilution is inflationary. If so, then you have to throw out ALL of modern economic theory --- including Krugman.
"The argument is dubious. All economies are built on confidence. An increase of the public debt now, as Krugman urges, would create a crisis of confidence, not a quicker recovery. "

It cannot be mentioned often enough that Keynes' theories assumed that during the times of plenty between recessions, the government would pay off its debts and balance its budget.

There is no reason to expect that Keynes, if he were running the economy today and in light of our massive national debt, would recommend "stimulus" under these conditions
Just great - Mr. Krugman isn't satisfied with five trillion in debt over four years, he wants more borrowing, much of it from the Chinese, our chief competitor both economic and God forbid, military. The more in hock we get the more the Chinese tell the world that our system of governing doesn't work and claim that theirs is better. And, ironically enough, given what Mr. Krugman wants to do, many on the left agree with that assessment.

With interest rates low, the cost of borrowing is low, but what happens when that changes? Are we to doom our children to hyperinflation as the government does the only thing it can do which is make it's debt worthless - while at the same time destroying the wealth of the Country?

Furthermore, there is something so un-commonsensical, so un-American about Mr. Krugman's assertions. Borrowing practically into infinity (since we can never pay it back) is what he would have us do - and somehow trust the government to stop borrowing when the economy gets going again. But, that would never happen - would anyone trust Congress and the President to modify habits IF Mr. Krugman's scheme is successful (which it wouldn't be)?

And what happens when if it isn't successful, what then? Like the prior Stimulus, which did not much other than to advance Democratic interests, we would be stuck with an enormous bill with zero to show for it.

I mentioned in another comment that those in the media sometimes think that history doesn't exist - am I the only one who recalls that when the Stimulus was rolled out we were told: (1) that it was for infrastructure improvements i.e. 'shovel ready' jobs and (2) we had to enact it IMMEDIATELY or there would be terrible consequences?

However, after enactment of the Stimulus we learned: (1) only a miniscule part of the Stimulus was for infrastructure improvements - most went to pay for favored Democratic causes that had been starved of money under Bush and (2) a substantial part of the Stimulus was unspent even months later. And then we learned that the Stimulus, which was sold as a one time measure, was carried forward every year since.

In short, we were lied to - those who were in favor of the Stimulus lied to the American people. After this how can you trust Democrats on anything? I remember all the rush to pass it - like their other bills Obama's first year - pass it right away so you don't see what's in it. Why should we have been surprised when it turned out to have all sorts of nonsense that had nothing to do with stimulating the economy.

It wasn't as if the Democratic media looked through the law - they went right along with the Democratic party line.

But, back to Mr. Krugman. I recall even the Times former editor (Keller?) being critical of his economic analysis. This is someone we should listen to to fix the economy? More borrowing? It's like a bad joke. And there is a sneaking suspicion that destroying wealth and going back to square one is what it's all about, that there is always some other motivation.

After all, it wasn't as if we weren't deliberately lied to - the first time.

P.S. The Nobel was granted in 2008 - it's recent enough that it is common knowledge, was obviously a typo and should be corrected.

Foreign Aid has been used by the UN/IMF for over 50 years in an attempt to stimulate economies. In the last few years now in the USA we have seen the "foreign aid model" applied domestically to our own economy by our own government as Stimulus Spending.

Stimulus Spending follows a pattern: distributed to governments (foreign government => US states), to favored groups (foreign military => US labor unions) and to special projects (dams, power plants => US green energy). However, the government has not facilitated growth but actually increased the burden in the US by increasing government (taxes, regulation, etc.)

The results domestically have been predictable - the US economy is under-performing in growth. The ineffective foreign aid model used domestically has not produced the promised results.

And, because of the large amount of the Stimulus Spending the US Federal government is left with huge annual deficits and rapidly increasing national debt.

Foreign aid spending from the US budget was tens of billions of dollars but Stimulus Spending in the US has been in trillions of dollars.

Above all else, predictably, based on experience with the foreign aid model applied elsewhere - Low Economic Growth.

The most important factor for growth as learned from the years and years of foreign aid lessons learned? - Government Reform.

With foreign governments we disparage their inflexibility and unwillingness to change - our Federal government is currently showing the same characteristics.

You are calling the blue sky orange. If you ignore the person and observe just the stated facts (which even facts are considered dubious) you would realize that Krugman has been more on target since the financial crisis than any other person, pundit, or economist. What has the confidence fairy done for the contries of Europe, or even England (which doesn't have the nightmare of the Euro)? Also, Mr. Sorman conveniently ignores the presence of a liquidity trap which results in the impeccable accuracy of Kenysian Economics of the present time. Where is the inflation that has been predicted? Why are US Treasuries at historic lows, with negative real interest rates? A few months back I beleive a conservative pundit called out the WSJ and said if someone had followed the WSJ's opinion page versus Paul Krugman's advice, they would be much poorer. Generally speaking, printing money causes inflation but you must recognize that it is not true 100% of the time. We are in a textbook example of an exception to that time. Plainly, those who disagree with Mr. Krugman either strongly dislike his liberal views or conveniently ignore pertinent facts.
I've always thought Krugman had his head screwed on wrong and was a borderline nut.
The 1974 “oil shock,” brought on price controls, by Ford, a horrible idea, which locked in stagflation. There is no inflation now. The problem NOW is jobs. A modest knowledge of economics and of recent history, reveals that there is NO record of long-term growth without government spending! Since the 1930s, government deficits have fueled growth in GDP.

Sorman conveniently ignores evidence to make his claims. “The collapse of state socialism,” as his book claims?” Nothing could be further from the truth! Four of the world’s largest corporations are state owned, protected and led Chinese corporations. The highest standards of living are in European socialist countries. Germany is kicking our butt in productivity. The Great American Progressive Experiment in democracy may be copied around the globe, but the European model of social programs is the one that is working.
A great review of the fool's book. Too bad you won't get the press that Krugman gets.
Dr. Krugman is a broken record. His default response to every problem is "more spending" and "bigger government". To people like Krugman, there will never be a good time to reduce spending and cut the deficit.

Economy's weak? "Whoa!!! We can't cut spending now! That'll push us into a depression!"

Economy's strong? "Whoa!! We can't cut spending now! That'll cut off this wonderful expansion!"

In fact, wasn't it not too long ago that Dr. Krugman was calmly assuring us all that "deficits don't matter"? Hmmmm .... As if what's going on in Europe right now isn't evidence enough of the idiocy of that statement, consider that right now about 5% of the federal budget each year is taken up with interest and principal payments on our accumulated $15 trillion in debt. If we keep going the way we're going, at some point in the not-all-that-distant future, that figure will rise to 10%, then 15%, then 20% ... When it gets to that point, I wonder if they will "matter" then, Dr. K?

Paul Krugman is like a kid playing with a train set in the basement of his mom's house. He's a career academician who has no idea of how the real world actually operates. By himself, he's always good for a few laughs. Unfortunately, he has a kindred spirit in the White House right now, and THAT is a serious problem.
I don't know what happened to my link, so I'll try without HTML link:

http://antidismal.blogspot.com/2011/11/richard-epstein-george-soros-and-bruce.html
What we commoners know is that American Keynesian practice produces inorganic, unsustainable sprawl. An economic imbroglio.

It's the reason Hayek resurfaces.

A little Anti Dismal for you all.

It's 85 minutes long but well worth it.

Pay special attention to Richard Epstein. My rather modest IQ gained a few points just listening to him.

I'm afraid that the operative word in Krugman's assertion is "incredibly." During WWII, there was not only sustained government spending--there was sustained, determined and heroic public will, to win the war. And, afterwards, during the American economic miracle, a popular belief that, since we did win the war, the USA could do anything, individually and together. So we did, or rather our fathers and grandfathers did. Our current environment and social attitudes are so extremely different that Krugman's prescription--taking on immensely more debt, is likely only to make the depression worse, I imagine.
Check out, and share, this new voter education website: www.VoteFacts.org
Rudolf Schnetler June 25, 2012 at 9:17 AM
Brilliant analysis.
The problem with Krugman and Keynesian economic is twofold:

1) Keynesian economics fails to consider the opportunity cost of borrowing the money Krugman wants the government to spend. If that money were left where it was, it would be spend or invested to some benefit. When the government borrows that money we give up those benefits. But Keynesian economics blindly just adds the government spending to GDP instead of first subtracting the value of what we give up.

2) Keynesian economics does not consider the cost of paying interest on that loan forever. If the government borrows $1T at 4% we pay $40B a year in interest on that loan forever. The present value of those interest pays is $40B/.04 or exactly $1T.

So government borrowing hurts the economy twice, once when we give up the benefits of what the money could have gotten us, and again when we consider the interest payments.

Now for the case of printing the money, all that does is create inflation which robs every person who holds any asset denominated in dollars. It also drives up the cost of the essential goods and services which the poor depend upon the most and is therefore an extremely regressive tax. Krugman should be ashamed of himself for wanting to balance our budget on the backs of the poorest of our citizens.
Where are the high interest rates and high inflation that Krugman's critics have predicted?
Excellent. Sadly Krugman gets all the publicity and affects those who do not even know countervailing arguments. LT
I have never read a more facile criticism of the Krugman/Keynes thesis. To suggest that monetarism and supply side economics provide credible answers and that the marketplace is wisest is risible. Hello: wasn't it the wisdom of the market place that got the USA and Europe into this horrible mess?
If growth slumps and confidence evaporates, triggered by poor banking practices,which were encouraged by reduced market regulation, we have recession.
The economy needs stimulating in ways tailored to encourage consumption. It is the less well off who have the greatest propensity to spend, so that is where stimulation is most effective and immediate.
Increased consumer demand leads to increased production and economic recovery.
Innovation and entrepreneurship, do not of themselves, lift a country out of recession. Both require a bright and confident market outlook that depends wholly on expectations of economic growth as signaled first by growth in demand.
Every time I see Dr. Krugman on TV, he has a look on his face that seems to be asking: "What am I doing here?" and "Why are these people listening to me?"

He also seldom answers a question directly preferring instead a sort of "stream of consciousness" thought process and diction, never quite finishing a sentence or idea before streaming off in another direction at least a couple of times, so that by the end of his soliloquy, the listener is left wondering what he really said and, it appears, Krugman himself is left wondering what he really said. Everyone looks befuddled (and well they should).

There's something infantile about this approach to his public presentations. What it is, of course, is fraud masquerading as deep thought. His ideas come so fast and furious, supposedly, he can't be expected to be clear and forthright. The mind is working so avidly, the vocal chords can hardly keep up. But if you really have nothing to say, you got to cover it up somehow.

I have a couple of relatives who have this sort of annoying persona to them. I don't like them and I don't like Krugman.

I don't see how anyone can possibly take him seriously. He's a master of chicanery.
I have to take it on my faith in the good sense of Mr. Sorman that Krugman deserved his Nobel prize. For most people, the awarding of the Nobel is an obscure process purporting to award great achievement, but occasionally mistakes are made -- think Arafat, Gore, Saramago, and Obama.

I tend to think that Krugman was more successful at fooling the Nobel committee than the public, because it doesn't add up that his arcane work would be brilliant and worthwhile to the 'experts', and so banal and wrong-headed when seen by the light of public exposure. To me he is yet another self-important over-inflated liberal, unable to understand reality.
Given the very spotty record over a century for Nobel prized in literature, perhaps that is good suggestion on Sorman's part. As for Literature itself, Krugman's thing would be a grave insult to serious writers and critics universally.
I think instead of castigating a person or his views we must first decide what is the role of the government. The differences and the often seem personal attacks stem from this difference and its lack of resolution. One model is for the poeple to collectively fund the infrastructure necessary for the country to function and if desired to triumph. The other is for the poeple to be involved only in funding a military. Every thing else will be decided by the market forces, its needs and demands. Dr. Kugman is of the opinion that the people should do more collectively to correct the forces causing economic strain and invest in infrastructure necessary to insure against market corrections. I am not sure what is wrong with that. If military is the only function of the government, then we should leave governing to the Military and not have politicians running for this and that. But that would not be kosher, right? It costs money to maintain existing institutions that provide for current quality of life and future security of it. If government (collective people, right?) do not do it, who is going to do it? Koch brothers? They are willing to spend billions on lobbying but will they spend the same on educational grant or reserach grant? They would not and they should not be expected to do so. They are rightfully using their money for their benefit. Collective funding is all others have going for them. That is really what Dr. Krugman is suggesting. I don't know why we can't take ideas from different minds when devising policy instead of belittling people who putforth ideas.
Thanks to M. Sorman, who endured Krugman's book, so the rest of us don't have to.
If we increased taxes, especially on the upper incomes, to pre-Reagan/Bush levels we would generate sufficient governmental income to finance a substantial increase in spending on public works/scientific research/space exploration/etcetera without increasing the deficit.

Our inequitable, inefficient tax code must share much of the blame for the lack of public confidence.
To paraphrase Woody Allen (I think), those that can, do. Those that can't, teach. Those that can't teach, teach economics. Some of those who teach economics become "pundits" for the New York Times. As they say -- and for good reason -- economics is the dismal science. It's a lot easier to be an economics "pundit" than it is to go out into the real world, create something of true value, and generate real jobs in the process -- something the likes of Krugman could never do.
Well, it is Mr. Krugman & Dr. Krugman. I distrust the former, and celebrate the latter. JAS
If anything the critique of Krugman doesn't go far enough. As stated, his nobel prize doesn't give him carte blanche to dispense non-sensical and banal economic advice. Thankfully he is stuck in NY writing oft-ignored columns and not in DC making policy decisions. I really think the only people that pay attention to him are conseratives because his half-truths get under their collective skin.
Krugman's Nobel Prize was awarded in 2008, not, as the article states, 2002.