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Krugman-in-Wonderland Perhaps the most constant theme in Paul Krugman’s recent columns has been his unwavering belief that the only way out of this depression is for governments to borrow and spend, and for central banks to inflate. He continues to beat the old drum that (1) there is not enough regulation of business, (2) [...] This is from the Mercatus Center’s Veronique de Rugy: We are told that austerity in Europe has failed. The elections in France and Greece, for instance, are supposedly evidence of people’s opposition to severe cuts in spending. However, the growing anti-austerity backlash against Europe ignores one fundamental point: If there is austerity in [...] Krugman-in-Wonderland When it became clear in 2007 and beyond that the housing bubble was breaking up and the bills for the national spending spree were coming due, the Bush administration shifted into “stimulus” mode. (It was nice getting an extra $2,100 in my checking account, but I defied the government and paid some bills instead [...] In the spring of 2003 then-Fed Governor Ben Bernanke travelled to Tokyo as the guest of the Bank of Japan’s Tokiko Shimizu, who arranged meetings for him with the then newly-independent BoJ, as well as the Ministry of Finance and Financial Services Agency (Japan’s analogs to the U.S. Treasury and SEC, respectively). During his visit [...] This is a recent interview with the Daily Capitalist’s David Stockman. He discusses a wide range of topics including the Obama jobs bill. He gives an interesting, and correct, view of the history of government spending to create “jobs.” He turns the conventional wisdom on its head. I don’t agree with all his views on taxation to [...] I am grateful that Professor Peter Diamond, Nobel recipient and labor economist, wasn’t nominated to the Fed. In today’s Big Interview on the Wall Street Journal, he said the following: The economy needs stimulus, it needs monetary stimulus, it needs fiscal stimulus, and this was a good step. How much it will help is hard to know. [...] McKinsey Global Research just came out with a study dealing with jobs in America, “An Economy That Works: Job Creation and America’s Future.” McKinsey loves to put put these big studies. It gives them the imprimatur of Big Thinkers and attracts clients. But in this case especially, they repackage the conventional wisdom and layer on [...] Does anyone seriously believe that the reason we have high unemployment in America is because we have a substandard infrastructure? Apparently the politicians in Washington believe that is so because they are trying to make a case for massive infrastructure spending in order to “create jobs” and to “prepare our economy for the 21st Century.” [...] We believe manufacturing and general industrial output will continue to be sluggish for the near term. The Fed’s G17 report today revealed that industrial production slowed again in August by 0.2%, down from July’s 0.9% gain. On a YoY basis, industrial production was up 3.4%. Overall the manufacturing remained sluggish (up 0.5%). There were good gains in auto production [...] |
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