Mt Whitney Zone Forums General Discussion Yosemite, Congress & Sequestering

Um, I think that at some point you have to reveal some of your own creds. I mean, the guy teaches at Princeton, writes for the NYT (not a shabby thing in itself) and has a Nobel prize**? On Keynes and the current thinking on stimulus vs. austerity, he's in agreement with the majority of economists -- 3 others of whom I can think of offhand with Nobels themselves. But to call him amateurish is pushing it a little unless you're also working at that level.

It's also true that economics is kinda squishy as a science (compared to, say, physics and math) but it (at least Krugman, Reich, Stiglitz et al) insist that models be predictive in nature and that a basic scientific rigor be applied. What he and others keep calling people on is that the predictions made by those advocating austerity -- here and, especially in Europe -- have been wrong. That's wrong, wrong, wrong. The prediction by PK et al was that austerity would put Europe and the UK back into recession and unemployment would increase. That's what happened and, to the extent I understand it, it's basic Keynes.

At no point has he or anyone else said we don't need to deal with so-called entitlements (e.g. SS, medicare). He's only said we don't do it now when we're in a recession. Even the conservative Joe Scarborough now seems to agree the government has to spend now to help the economy.

I mean, we can bandy numbers about all day but I cheerfully admit it's way beyond my grade level, poor but honest Forestry major that I am. The reason I like PK so much is he does tend to agree -- and reinforce -- my wild-eyed radical tendencies (Berkeley '73***) but he (and Reich and even Stiglitz) writes with clarity, humor and brilliant irony (hey, "zombie economics" as a term for discredited ideas that keep coming back whatever the evidence against them? Darned clever). They also use facts from usually reliable government sources (GAO, OMB etc).

So that loops around to a Rumsfeldian what do we know, how do we know it and how do we trust what we know when we know it? And even how and why do we change and evolve in our thinking. It's true we do get into intellectual ruts, often based on our biases and even politics. But much of changing minds is in discussion, presenting what we see as facts and even repeating -- evolving the points as you go and as experience and evidence changes. In that sense, Krugman has been doing a remarkable job. I think his writing has made a major contribution to changing the debate on austerity, the relative importance of federal debt and deficit and the importance of middle class recovery and jobs. Where once what we can call the tea party types dominated the discussion on economics (the deficit will turn our country into Greece!!), increasingly larger segments of chattering class types and politicians have to actually answer the Keynesian model of recovery rather than keep repeating the "family" model as expressed here several times (a model that is simply wrong. Once again, the budget of a family is not the same as that of a government with its own currency: www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html).

For that reason, I'm glad Steve et al haven't pulled the plug. These are discussions about the role of government and the relationship of spending, debt etc. to a country's economy that should be going on everywhere and why not here?

Well, I see our time is up. Tomorrow's assignment is compare and contrast Herbert Hoover's response to a tanking economy with that of FDR and the rise of the Keynes model.

g.

Eeeek. Should we start a battle of footnotes? Wiki entry:

**According to the prize Committee, the prize was given for Krugman's work explaining the patterns of international trade and the geographic concentration of wealth, by examining the effects of economies of scale and of consumer preferences for diverse goods and services.[9]
Krugman is known in academia for his work on international economics (including trade theory, economic geography, and international finance),[10][11] liquidity traps, and currency crises. He is the 20th most widely cited economist in the world today[12] and is ranked among the most influential academic thinkers in the US.[13]

*** Can I also mention that my more conservative grandmother (Berkeley '06) refused to use dimes when FDR's face was put on it? Thus is balance achieved in a turbulent universe.