Paul Krugman is a jackass (1 Viewer)

[Slapdash]

Why does that bother you guys so much?

Sure, it's a pretty partisan/liberal opinion, but it's fairly commonly held, that the conservative leadership used these attacks to carry out nation building in the middle east, under the guise of a war on terror. They co-opted the memory of 9-11 to do so, and in that light, Krugman can't look at the events the same.

Only to a very small degree do I agree with him, and it's mainly on the issue that the 9-11 event was used as a pretense to go to war with Iraq, but I don't look back on it with shame, and I think he's off-base mentioning that aspect of it. But, all things considered, I don't find his comments to be particularly "slimeballish".

It is a great example of what you just said. This guy shows an incapability of being anything but partisan with a strong liberal bias so when it comes to a subject where he is a noted expert in, I can not take what he says without a truckload of salt. I do not care if all liberals think this, it is just a red flag that screams that this persons worldview is skewered.

Perhaps his world view is informed by his view of economics? Perhaps what he sees in the underlying economy, vs what people in one party or another are saying, makes him a bit biased against that party?Regardless, dude is an elite economist, and he has some pretty entertaining opinions that spawn discussion. If you simply stuck with the conservative "economists" with their conservative ideologies, you'd have believed we'd be experiencing high inflation right now, along with other issues they got wrong, while Krugman and his liberal leanings, correctly predicted.

Actually... inflation is outstripping growth. The major reason why inflation is not a huge problem is because growth is so anemic. When we are on a 3%+ clip of inflation yet only managing 1% growth- that is nothing to get excited about. What has happened is that the current governments policies have failed so miserably that inflation has not become a major problem. However, it is still a specter over the future economy when the economy finally does actually get healthy again.

Patently false.

 

[Chadstroma]

Not even the "unreasonable liberals" like myself watch Olbermann or Shultz.

Yea, they just put Rachel Maddow as their avatar.

If you can't see the difference between Maddow and the other clowns being named, you're beyond help.

Never watched Shultz but the only difference I see between Olbermann and Maddow is Maddow actually has a brain. So, I suppose I am beyond help.

 

[Chadstroma]

Excellent.Ok, I've got:1) Sad Party hats2) Depressing Kazoos3) Greyscale ConfettiPity party back on!

 

[Chadstroma]

What is Olberman up to nowadays?

I saw his show pop up on Current scrolling through. Not sure if that is re-runs (why would you re-run his show) or actually they picked it up being the 'we are even further left than MSNBC' channel.

 

[Chadstroma]

Why does that bother you guys so much?

Sure, it's a pretty partisan/liberal opinion, but it's fairly commonly held, that the conservative leadership used these attacks to carry out nation building in the middle east, under the guise of a war on terror. They co-opted the memory of 9-11 to do so, and in that light, Krugman can't look at the events the same.

Only to a very small degree do I agree with him, and it's mainly on the issue that the 9-11 event was used as a pretense to go to war with Iraq, but I don't look back on it with shame, and I think he's off-base mentioning that aspect of it. But, all things considered, I don't find his comments to be particularly "slimeballish".

It is a great example of what you just said. This guy shows an incapability of being anything but partisan with a strong liberal bias so when it comes to a subject where he is a noted expert in, I can not take what he says without a truckload of salt. I do not care if all liberals think this, it is just a red flag that screams that this persons worldview is skewered.

Perhaps his world view is informed by his view of economics? Perhaps what he sees in the underlying economy, vs what people in one party or another are saying, makes him a bit biased against that party?Regardless, dude is an elite economist, and he has some pretty entertaining opinions that spawn discussion. If you simply stuck with the conservative "economists" with their conservative ideologies, you'd have believed we'd be experiencing high inflation right now, along with other issues they got wrong, while Krugman and his liberal leanings, correctly predicted.

Actually... inflation is outstripping growth. The major reason why inflation is not a huge problem is because growth is so anemic. When we are on a 3%+ clip of inflation yet only managing 1% growth- that is nothing to get excited about. What has happened is that the current governments policies have failed so miserably that inflation has not become a major problem. However, it is still a specter over the future economy when the economy finally does actually get healthy again.

Patently false.

1.8% Growth rate in Q1 of 2011. Jan inflation rate: 1.6%

Feb inflation rate: 2.1%

March infaltion rate: 2.7%

 

[Slapdash]

What is Olberman up to nowadays?

I saw his show pop up on Current scrolling through. Not sure if that is re-runs (why would you re-run his show) or actually they picked it up being the 'we are even further left than MSNBC' channel.

Maybe somebody is just dying to know which Fox News commentator is the Worst Person In The World! Never heard of Current.

 

[Chadstroma]

What is Olberman up to nowadays?

I saw his show pop up on Current scrolling through. Not sure if that is re-runs (why would you re-run his show) or actually they picked it up being the 'we are even further left than MSNBC' channel.

Maybe somebody is just dying to know which Fox News commentator is the Worst Person In The World! Never heard of Current.

If memory serves, it is the channel Gore launched with some other liberals. I watched a couple of docs on it from the asian chick who was arrested in N. Korea and in between it had an Mtv uber-liberal thing going on.

 

[Woogie Lee]

What is Olberman up to nowadays?

I saw his show pop up on Current scrolling through. Not sure if that is re-runs (why would you re-run his show) or actually they picked it up being the 'we are even further left than MSNBC' channel.

His show is on Current TV. I believe it's the only news show on that channel. Not sure how it would be further left, when most of their content is global documentaries and other "worldly" shows. But since conservatives and Rs don't like stuff like that, maybe you are right after all.

 

[Woogie Lee]

What is Olberman up to nowadays?

I saw his show pop up on Current scrolling through. Not sure if that is re-runs (why would you re-run his show) or actually they picked it up being the 'we are even further left than MSNBC' channel.

Maybe somebody is just dying to know which Fox News commentator is the Worst Person In The World! Never heard of Current.

If memory serves, it is the channel Gore launched with some other liberals. I watched a couple of docs on it from the asian chick who was arrested in N. Korea and in between it had an Mtv uber-liberal thing going on.

You mean like telling stories and investigative journalism from around the globe?

 

[Chadstroma]

What is Olberman up to nowadays?

I saw his show pop up on Current scrolling through. Not sure if that is re-runs (why would you re-run his show) or actually they picked it up being the 'we are even further left than MSNBC' channel.

His show is on Current TV. I believe it's the only news show on that channel. Not sure how it would be further left, when most of their content is global documentaries and other "worldly" shows. But since conservatives and Rs don't like stuff like that, maybe you are right after all.

Yup. I HATE that stuff. Which is odd considering I watch it. Go figure. The host between the shows and the content was extremely liberal. But who knows, maybe I just got the uber liberal hours the couple of times I watched those docs. But then again, since I hate docs so much, I might have just been really mad at everything being subjected to that torture.

 

[Woogie Lee]

What is Olberman up to nowadays?

I saw his show pop up on Current scrolling through. Not sure if that is re-runs (why would you re-run his show) or actually they picked it up being the 'we are even further left than MSNBC' channel.

His show is on Current TV. I believe it's the only news show on that channel. Not sure how it would be further left, when most of their content is global documentaries and other "worldly" shows. But since conservatives and Rs don't like stuff like that, maybe you are right after all.

Yup. I HATE that stuff. Which is odd considering I watch it. Go figure. The host between the shows and the content was extremely liberal. But who knows, maybe I just got the uber liberal hours the couple of times I watched those docs. But then again, since I hate docs so much, I might have just been really mad at everything being subjected to that torture.

Poor chad.

 

[Slapdash]

Why does that bother you guys so much?

Sure, it's a pretty partisan/liberal opinion, but it's fairly commonly held, that the conservative leadership used these attacks to carry out nation building in the middle east, under the guise of a war on terror. They co-opted the memory of 9-11 to do so, and in that light, Krugman can't look at the events the same.

Only to a very small degree do I agree with him, and it's mainly on the issue that the 9-11 event was used as a pretense to go to war with Iraq, but I don't look back on it with shame, and I think he's off-base mentioning that aspect of it. But, all things considered, I don't find his comments to be particularly "slimeballish".

It is a great example of what you just said. This guy shows an incapability of being anything but partisan with a strong liberal bias so when it comes to a subject where he is a noted expert in, I can not take what he says without a truckload of salt. I do not care if all liberals think this, it is just a red flag that screams that this persons worldview is skewered.

Perhaps his world view is informed by his view of economics? Perhaps what he sees in the underlying economy, vs what people in one party or another are saying, makes him a bit biased against that party?Regardless, dude is an elite economist, and he has some pretty entertaining opinions that spawn discussion. If you simply stuck with the conservative "economists" with their conservative ideologies, you'd have believed we'd be experiencing high inflation right now, along with other issues they got wrong, while Krugman and his liberal leanings, correctly predicted.

Actually... inflation is outstripping growth. The major reason why inflation is not a huge problem is because growth is so anemic. When we are on a 3%+ clip of inflation yet only managing 1% growth- that is nothing to get excited about. What has happened is that the current governments policies have failed so miserably that inflation has not become a major problem. However, it is still a specter over the future economy when the economy finally does actually get healthy again.

Patently false.

1.8% Growth rate in Q1 of 2011. Jan inflation rate: 1.6%

Feb inflation rate: 2.1%

March infaltion rate: 2.7%

I'm not sure where those numbers are from, but the BEA has QoQ Nominal growth at 3.5% for the first quarter. The inflation adjusted or real measure is at .4%. Real GDP growth has been positive since Q2 2009 indicating that growth in output is still positive once it has been adjusted for inflation.

 

[Soonerman]

Not even the "unreasonable liberals" like myself watch Olbermann or Shultz.

Yea, they just put Rachel Maddow as their avatar.

If you can't see the difference between Maddow and the other clowns being named, you're beyond help.

She's the manliest of the three?

 

[MaxThreshold]

What is Olberman up to nowadays?

I saw his show pop up on Current scrolling through. Not sure if that is re-runs (why would you re-run his show) or actually they picked it up being the 'we are even further left than MSNBC' channel.

His show is on Current TV. I believe it's the only news show on that channel. Not sure how it would be further left, when most of their content is global documentaries and other "worldly" shows. But since conservatives and Rs don't like stuff like that, maybe you are right after all.

Olbermann's show is a NEWS show? Wow, way to insult news shows. And he's so far left that Michael Moore calls him "the crazy left".

 

[bueno]

An Impeccable DisasterBy PAUL KRUGMANPublished: September 11, 2011 On Thursday Jean-Claude Trichet, the president of the European Central Bank or E.C.B. — Europe's equivalent to Ben Bernanke — lost his sang-froid. In response to a question about whether the E.C.B. is becoming a "bad bank" thanks to its purchases of troubled nations' debt, Mr. Trichet, his voice rising, insisted that his institution has performed "impeccably, impeccably!" as a guardian of price stability.Financial turmoil in Europe is no longer a problem of small, peripheral economies like Greece. What's under way right now is a full-scale market run on the much larger economies of Spain and Italy. At this point countries in crisis account for about a third of the euro area's G.D.P., so the common European currency itself is under existential threat.And all indications are that European leaders are unwilling even to acknowledge the nature of that threat, let alone deal with it effectively.I've complained a lot about the "fiscalization" of economic discourse here in America, the way in which a premature focus on budget deficits turned Washington's attention away from the ongoing jobs disaster. But we're not unique in that respect, and in fact the Europeans have been much, much worse.Listen to many European leaders — especially, but by no means only, the Germans — and you'd think that their continent's troubles are a simple morality tale of debt and punishment: Governments borrowed too much, now they're paying the price, and fiscal austerity is the only answer.Yet this story applies, if at all, to Greece and nobody else. Spain in particular had a budget surplus and low debt before the 2008 financial crisis; its fiscal record, one might say, was impeccable. And while it was hit hard by the collapse of its housing boom, it's still a relatively low-debt country, and it's hard to make the case that the underlying fiscal condition of Spain's government is worse than that of, say, Britain's government.So why is Spain — along with Italy, which has higher debt but smaller deficits — in so much trouble? The answer is that these countries are facing something very much like a bank run, except that the run is on their governments rather than, or more accurately as well as, their financial institutions.Here's how such a run works: Investors, for whatever reason, fear that a country will default on its debt. This makes them unwilling to buy the country's bonds, or at least not unless offered a very high interest rate. And the fact that the country must roll its debt over at high interest rates worsens its fiscal prospects, making default more likely, so that the crisis of confidence becomes a self-fulfilling prophecy. And as it does, it becomes a banking crisis as well, since a country's banks are normally heavily invested in government debt.Now, a country with its own currency, like Britain, can short-circuit this process: if necessary, the Bank of England can step in to buy government debt with newly created money. This might lead to inflation (although even that is doubtful when the economy is depressed), but inflation poses a much smaller threat to investors than outright default. Spain and Italy, however, have adopted the euro and no longer have their own currencies. As a result, the threat of a self-fulfilling crisis is very real — and interest rates on Spanish and Italian debt are more than twice the rate on British debt.Which brings us back to the impeccable E.C.B.What Mr. Trichet and his colleagues should be doing right now is buying up Spanish and Italian debt — that is, doing what these countries would be doing for themselves if they still had their own currencies. In fact, the E.C.B. started doing just that a few weeks ago, and produced a temporary respite for those nations. But the E.C.B. immediately found itself under severe pressure from the moralizers, who hate the idea of letting countries off the hook for their alleged fiscal sins. And the perception that the moralizers will block any further rescue actions has set off a renewed market panic.Adding to the problem is the E.C.B.'s obsession with maintaining its "impeccable" record on price stability: at a time when Europe desperately needs a strong recovery, and modest inflation would actually be helpful, the bank has instead been tightening money, trying to head off inflation risks that exist only in its imagination.And now it's all coming to a head. We're not talking about a crisis that will unfold over a year or two; this thing could come apart in a matter of days. And if it does, the whole world will suffer.So will the E.C.B. do what needs to be done — lend freely and cut rates? Or will European leaders remain too focused on punishing debtors to save themselves? The whole world is watching.

Damn fine article here.It's sad that many on the right cannot read the excellent economic analysis from Krugman because they disagree with his political views. It's like not admiring an oscar-worthy performance from an actor because you disagree with who they support politically.

His economic analysis sucks. Buying up Greek debt will not solve the problem of Greek spending which go them there in the first place.

 

[bueno]

Why does that bother you guys so much?

Sure, it's a pretty partisan/liberal opinion, but it's fairly commonly held, that the conservative leadership used these attacks to carry out nation building in the middle east, under the guise of a war on terror. They co-opted the memory of 9-11 to do so, and in that light, Krugman can't look at the events the same.

Only to a very small degree do I agree with him, and it's mainly on the issue that the 9-11 event was used as a pretense to go to war with Iraq, but I don't look back on it with shame, and I think he's off-base mentioning that aspect of it. But, all things considered, I don't find his comments to be particularly "slimeballish".

It is a great example of what you just said. This guy shows an incapability of being anything but partisan with a strong liberal bias so when it comes to a subject where he is a noted expert in, I can not take what he says without a truckload of salt. I do not care if all liberals think this, it is just a red flag that screams that this persons worldview is skewered.

Perhaps his world view is informed by his view of economics? Perhaps what he sees in the underlying economy, vs what people in one party or another are saying, makes him a bit biased against that party?Regardless, dude is an elite economist, and he has some pretty entertaining opinions that spawn discussion. If you simply stuck with the conservative "economists" with their conservative ideologies, you'd have believed we'd be experiencing high inflation right now, along with other issues they got wrong, while Krugman and his liberal leanings, correctly predicted.

Been to the grocery store lately?

 

[fatguyinalittlecoat]

Here's Krugman's explanation for disabling the comments

These were sentiments he'd expressed before, but he knew they'd set people off. He turned off the comment section. "I didn't have time to sift through the predictable vast pile of obscene and threatening stuff looking for the rare entries that were fit to print," Krugman says.

I'm a bit surprised the Times actually has the columnists themselves moderate the comments.

 

[tommyboy]

i'm glad that Krugman is a prominent Liberal. Helps my side.

 

[Chadstroma]

Why does that bother you guys so much?

Sure, it's a pretty partisan/liberal opinion, but it's fairly commonly held, that the conservative leadership used these attacks to carry out nation building in the middle east, under the guise of a war on terror. They co-opted the memory of 9-11 to do so, and in that light, Krugman can't look at the events the same.

Only to a very small degree do I agree with him, and it's mainly on the issue that the 9-11 event was used as a pretense to go to war with Iraq, but I don't look back on it with shame, and I think he's off-base mentioning that aspect of it. But, all things considered, I don't find his comments to be particularly "slimeballish".

It is a great example of what you just said. This guy shows an incapability of being anything but partisan with a strong liberal bias so when it comes to a subject where he is a noted expert in, I can not take what he says without a truckload of salt. I do not care if all liberals think this, it is just a red flag that screams that this persons worldview is skewered.

Perhaps his world view is informed by his view of economics? Perhaps what he sees in the underlying economy, vs what people in one party or another are saying, makes him a bit biased against that party?Regardless, dude is an elite economist, and he has some pretty entertaining opinions that spawn discussion. If you simply stuck with the conservative "economists" with their conservative ideologies, you'd have believed we'd be experiencing high inflation right now, along with other issues they got wrong, while Krugman and his liberal leanings, correctly predicted.

Actually... inflation is outstripping growth. The major reason why inflation is not a huge problem is because growth is so anemic. When we are on a 3%+ clip of inflation yet only managing 1% growth- that is nothing to get excited about. What has happened is that the current governments policies have failed so miserably that inflation has not become a major problem. However, it is still a specter over the future economy when the economy finally does actually get healthy again.

Patently false.

1.8% Growth rate in Q1 of 2011. Jan inflation rate: 1.6%

Feb inflation rate: 2.1%

March infaltion rate: 2.7%

I'm not sure where those numbers are from, but the BEA has QoQ Nominal growth at 3.5% for the first quarter. The inflation adjusted or real measure is at .4%. Real GDP growth has been positive since Q2 2009 indicating that growth in output is still positive once it has been adjusted for inflation.

I did not look at real vs nominal but even so the trend is that inflation is increasing while the economy is slowing.

 

[tommyboy]

now this is funny:

The Krugman Fallacy

Stan, I'm afraid you're heading down a blind alley. You cannot hold pre-NYT Economist Paul Krugman up to the current version. You'll just go mad. Sallie James pointed out the problem with Columnist Paul Krugman, when it comes to the concept of competitveness.

But my favorite example was well chronicled by our friend James Taranto last year. When Sen. Jim Bunning held up an extension of unemployment benefits, Krugman lamented "the incredible gap that has opened up between the parties"

Take the question of helping the unemployed in the middle of a deep slump. What Democrats believe is what textbook economics says: that when the economy is deeply depressed, extending unemployment benefits not only helps those in need, it also reduces unemployment. …

But that's not how Republicans see it. Here's what Senator Jon Kyl of Arizona, the second-ranking Republican in the Senate, had to say when defending Mr. Bunning's position (although not joining his blockade): unemployment relief "doesn't create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work."

Krugman added, "To me, that's a bizarre point of view — but then, I don't live in Mr. Kyl's universe. And the difference between the two universes isn't just intellectual, it's also moral."Intrigued, Taranto went out to investigate what "textbook economics" says on the matter. He went to, of all places, Paul Krugman's textbook (co-written with Robin Wells, AKA Mrs. Krugman) Macroeconomics. It says:

Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker's incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of "Eurosclerosis," the persistent high unemployment that affects a number of European countries.

Now Krugman's extended moralizing about helping the unemployed is not invalidated by his hypocrisy, but his pose of astonishment that anyone could agree with what his own textbook says is hard to square with claims of consistency or good faith.

 

[fatguyinalittlecoat]

My guess is that Krugman would point to the part where he says "when the economy is deeply depressed ..." The textbook wasn't talking about a depressed economy. I'm not sure how convincing that is, though.

 

[Reepicheep]

This seemed like a good place to post this. Somebody dug up an old article by Krugman, wherein he calls Social Security a "Ponzi game."

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today's young may well get less than they put in).

Link

 

[pantagrapher]

This seemed like a good place to post this. Somebody dug up an old article by Krugman, wherein he calls Social Security a "Ponzi game."

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today's young may well get less than they put in).

Link

The Ponzi Thing

Well, I gather that a lot of right-wingers are quoting selectively from a piece I wrote 15 years ago in the Boston Review, in which I said that Social Security had a “Ponzi game aspect.” As always, you should read what I actually wrote. Here’s the passage:

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

Notice what I didn’t say. I didn’t say that the system was a fraud; I didn’t say that it would collapse. I said that in the past it had benefited from the fact that each generation paying in to the system was bigger than the generation that preceded it, and that this luxury would be ending in the years ahead.

So why did I use the P-word? Basically because Paul Samuelson had done the same; he was basically just being cute, and I was emulating him — which now turns out to be a mistake.

But anyway, anyone who uses my statement as some kind of defense of Rick Perry and all that is playing word games. I explained what I meant in that Boston Review article, and it was nothing at all like the claims that Social Security is a fraud, is destined to collapse, and all that. Social Security is and always has been mainly a pay-as-you-go system, which is nothing at all like a classic Ponzi scheme.

Of course, the usual suspects won’t pay any attention to what I’ve just said. But if anyone is actually listening …

 

[pantagrapher]

Krugman on Colbert

 

[Andy Dufresne]

The Ponzi Thing

Well, I gather that a lot of right-wingers are quoting selectively from a piece I wrote 15 years ago in the Boston Review, in which I said that Social Security had a “Ponzi game aspect.” As always, you should read what I actually wrote. Here’s the passage:

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

Notice what I didn’t say. I didn’t say that the system was a fraud; I didn’t say that it would collapse. I said that in the past it had benefited from the fact that each generation paying in to the system was bigger than the generation that preceded it, and that this luxury would be ending in the years ahead.

So why did I use the P-word? Basically because Paul Samuelson had done the same; he was basically just being cute, and I was emulating him — which now turns out to be a mistake.

But anyway, anyone who uses my statement as some kind of defense of Rick Perry and all that is playing word games. I explained what I meant in that Boston Review article, and it was nothing at all like the claims that Social Security is a fraud, is destined to collapse, and all that. Social Security is and always has been mainly a pay-as-you-go system, which is nothing at all like a classic Ponzi scheme.

Of course, the usual suspects won’t pay any attention to what I’ve just said. But if anyone is actually listening …

Bold #1: If succeeding generations become smaller, by definition the idea must collapse. So he's just playing with words there.Bold #2:

 

[Reepicheep]

This seemed like a good place to post this. Somebody dug up an old article by Krugman, wherein he calls Social Security a "Ponzi game."

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today's young may well get less than they put in).

Link

The Ponzi Thing

Well, I gather that a lot of right-wingers are quoting selectively from a piece I wrote 15 years ago in the Boston Review, in which I said that Social Security had a “Ponzi game aspect.” As always, you should read what I actually wrote. Here’s the passage:

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

Notice what I didn’t say. I didn’t say that the system was a fraud; I didn’t say that it would collapse. I said that in the past it had benefited from the fact that each generation paying in to the system was bigger than the generation that preceded it, and that this luxury would be ending in the years ahead.

So why did I use the P-word? Basically because Paul Samuelson had done the same; he was basically just being cute, and I was emulating him — which now turns out to be a mistake.

But anyway, anyone who uses my statement as some kind of defense of Rick Perry and all that is playing word games. I explained what I meant in that Boston Review article, and it was nothing at all like the claims that Social Security is a fraud, is destined to collapse, and all that. Social Security is and always has been mainly a pay-as-you-go system, which is nothing at all like a classic Ponzi scheme.

Of course, the usual suspects won’t pay any attention to what I’ve just said. But if anyone is actually listening …

Amazing. Of course Krugman has no choice to play it off like he was being cute or ironic or whatever. But obviously Perry is an idiot for using the same rhetoric.

 

[IvanKaramazov]

This seemed like a good place to post this. Somebody dug up an old article by Krugman, wherein he calls Social Security a "Ponzi game."

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today's young may well get less than they put in).

Link

The Ponzi Thing

Well, I gather that a lot of right-wingers are quoting selectively from a piece I wrote 15 years ago in the Boston Review, in which I said that Social Security had a “Ponzi game aspect.” As always, you should read what I actually wrote. Here’s the passage:

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

Notice what I didn’t say. I didn’t say that the system was a fraud; I didn’t say that it would collapse. I said that in the past it had benefited from the fact that each generation paying in to the system was bigger than the generation that preceded it, and that this luxury would be ending in the years ahead.

So why did I use the P-word? Basically because Paul Samuelson had done the same; he was basically just being cute, and I was emulating him — which now turns out to be a mistake.

But anyway, anyone who uses my statement as some kind of defense of Rick Perry and all that is playing word games. I explained what I meant in that Boston Review article, and it was nothing at all like the claims that Social Security is a fraud, is destined to collapse, and all that. Social Security is and always has been mainly a pay-as-you-go system, which is nothing at all like a classic Ponzi scheme.

Of course, the usual suspects won’t pay any attention to what I’ve just said. But if anyone is actually listening …

I read this earlier this morning. My favorite part was how even when you put the quote in context and even when he tacks on some additional explanation, it still works.

 

[pantagrapher]

The Ponzi Thing

Well, I gather that a lot of right-wingers are quoting selectively from a piece I wrote 15 years ago in the Boston Review, in which I said that Social Security had a “Ponzi game aspect.” As always, you should read what I actually wrote. Here’s the passage:

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

Notice what I didn’t say. I didn’t say that the system was a fraud; I didn’t say that it would collapse. I said that in the past it had benefited from the fact that each generation paying in to the system was bigger than the generation that preceded it, and that this luxury would be ending in the years ahead.

So why did I use the P-word? Basically because Paul Samuelson had done the same; he was basically just being cute, and I was emulating him — which now turns out to be a mistake.

But anyway, anyone who uses my statement as some kind of defense of Rick Perry and all that is playing word games. I explained what I meant in that Boston Review article, and it was nothing at all like the claims that Social Security is a fraud, is destined to collapse, and all that. Social Security is and always has been mainly a pay-as-you-go system, which is nothing at all like a classic Ponzi scheme.

Of course, the usual suspects won’t pay any attention to what I’ve just said. But if anyone is actually listening …

Bold #1: If succeeding generations become smaller, by definition the idea must collapse. So he's just playing with words there.Bold #2:

SS contributions are not static.

 

[Andy Dufresne]

Bold #2:

SS contributions are not static.

Perhaps I misunderstood what he was saying. But that's still BS because that fact alone doesn't discount it from being a Ponzi scheme. I like how he covered his bases by inserting the word "classic" there.

 

[pantagrapher]

This kind of gotcha is dull. You all know Krugman doesn't consider SS a ponzi scheme. But you'll eagerly pretend that him saying 15 years ago that SS has a single "ponzi game aspect" proves he really believes it is a ponzi scheme and yet ... he supports it anyway.

 

[fatguyinalittlecoat]

If succeeding generations become smaller, by definition the idea must collapse. So he's just playing with words there.

I don't think it is likely that all succeeding generations will continue to get smaller. The problem facing us right now is that the Baby Boomers were such a big generation. If we can get through their retirement years the numbers will go back to more normal.

 

[pantagrapher]

Bold #2:

SS contributions are not static.

Perhaps I misunderstood what he was saying. But that's still BS because that fact alone doesn't discount it from being a Ponzi scheme. I like how he covered his bases by inserting the word "classic" there.

Well, a classic ponzi scheme intends to defraud contributors at some point. SS doesn't intend to do that. The intent is to continue paying subsequent contributors, tweaking contributions along the way, as necessary. Nobody gets rich. Nobody gets screwed.

 

[IvanKaramazov]

This kind of gotcha is dull. You all know Krugman doesn't consider SS a ponzi scheme. But you'll eagerly pretend that him saying 15 years ago that SS has a single "ponzi scheme aspect" proves he really believes it is a ponzi scheme and yet ... he supports it anyway.

Nobody thinks that Social Security is literally a Ponzi scheme. Paul Krugman doesn't, Rick Perry doesn't, you don't, I don't, etc. For one thing, Social Security isn't illegal. For another thing, governments have the ability to coerce payment from people, which Ponzi operators don't enjoy. We could go on, but you get the point. When people say "Social Security is a Ponzi scheme," they're invoking a metaphor to point out that Social Security shares some but not all of the characteristics of a Ponzi scheme. This is actually not a controversial observation, or at least it used to not be controversial as we can see from Krugman's post. Like Krugman points out, Social Security stays afloat by using the payments of "new investors" (workers) to pay off "older investors" (retirees). And like Krugman acknowledges, this mechanism causes it to break down when the ratio of workers to retirees gets out of whack. Again, this is not even remotely controversial.The reason why people enjoy these "gotcha" moments with Krugman is because he always -- and I do mean literally always, as in 100% of the time -- attributes the worst possible motives to those who disagree with him. Some would say that this makes him a bit of a jackass. So it's lots of fun to see him saying the same stuff that he lambasts others for.

 

[timschochet]

Bold #2:

SS contributions are not static.

Perhaps I misunderstood what he was saying. But that's still BS because that fact alone doesn't discount it from being a Ponzi scheme. I like how he covered his bases by inserting the word "classic" there.

Well, a classic ponzi scheme intends to defraud contributors at some point. SS doesn't intend to do that. The intent is to continue paying subsequent contributors, tweaking contributions along the way, as necessary. Nobody gets rich. Nobody gets screwed.

You've hit the nail on the head. When someone calls SS a ponzi scheme, they are describing not merely the method but also the intent. It is the latter that makes this accusation absurd IMO.

 

[Andy Dufresne]

If succeeding generations become smaller, by definition the idea must collapse. So he's just playing with words there.

I don't think it is likely that all succeeding generations will continue to get smaller. The problem facing us right now is that the Baby Boomers were such a big generation. If we can get through their retirement years the numbers will go back to more normal.

This is true. It's a big "if" however. And if we reach equilibrium where each generation is just as small/large as the next, then what's the point?

Bold #2:

SS contributions are not static.

Perhaps I misunderstood what he was saying. But that's still BS because that fact alone doesn't discount it from being a Ponzi scheme. I like how he covered his bases by inserting the word "classic" there.

Well, a classic ponzi scheme intends to defraud contributors at some point. SS doesn't intend to do that. The intent is to continue paying subsequent contributors, tweaking contributions along the way, as necessary. Nobody gets rich. Nobody gets screwed.

The intent is to pay subsequent contributors with funds from current ones. But the carousel ends when you don't have enough current ones to pay supsequent ones.

 

[timschochet]

This kind of gotcha is dull. You all know Krugman doesn't consider SS a ponzi scheme. But you'll eagerly pretend that him saying 15 years ago that SS has a single "ponzi scheme aspect" proves he really believes it is a ponzi scheme and yet ... he supports it anyway.

Nobody thinks that Social Security is literally a Ponzi scheme. Paul Krugman doesn't, Rick Perry doesn't, you don't, I don't, etc. For one thing, Social Security isn't illegal. For another thing, governments have the ability to coerce payment from people, which Ponzi operators don't enjoy. We could go on, but you get the point. When people say "Social Security is a Ponzi scheme," they're invoking a metaphor to point out that Social Security shares some but not all of the characteristics of a Ponzi scheme. This is actually not a controversial observation, or at least it used to not be controversial as we can see from Krugman's post. Like Krugman points out, Social Security stays afloat by using the payments of "new investors" (workers) to pay off "older investors" (retirees). And like Krugman acknowledges, this mechanism causes it to break down when the ratio of workers to retirees gets out of whack. Again, this is not even remotely controversial.The reason why people enjoy these "gotcha" moments with Krugman is because he always -- and I do mean literally always, as in 100% of the time -- attributes the worst possible motives to those who disagree with him. Some would say that this makes him a bit of a jackass. So it's lots of fun to see him saying the same stuff that he lambasts others for.

The quote I read from Perry's book indicates to me that he actually DOES believe that SS is a ponzi scheme and a fraud. And I suspect a good chunk of Tea Partiers agree with him. So when you write that nobody thinks that way, I have to disagree.

 

[IvanKaramazov]

Bold #2:

SS contributions are not static.

Perhaps I misunderstood what he was saying. But that's still BS because that fact alone doesn't discount it from being a Ponzi scheme. I like how he covered his bases by inserting the word "classic" there.

Well, a classic ponzi scheme intends to defraud contributors at some point. SS doesn't intend to do that. The intent is to continue paying subsequent contributors, tweaking contributions along the way, as necessary. Nobody gets rich. Nobody gets screwed.

You've hit the nail on the head. When someone calls SS a ponzi scheme, they are describing not merely the method but also the intent. It is the latter that makes this accusation absurd IMO.

What a bizarre thing to say in the context of this thread.

 

[Road Warriors]

This kind of gotcha is dull. You all know Krugman doesn't consider SS a ponzi scheme. But you'll eagerly pretend that him saying 15 years ago that SS has a single "ponzi scheme aspect" proves he really believes it is a ponzi scheme and yet ... he supports it anyway.

Nobody thinks that Social Security is literally a Ponzi scheme. Paul Krugman doesn't, Rick Perry doesn't, you don't, I don't, etc. For one thing, Social Security isn't illegal. For another thing, governments have the ability to coerce payment from people, which Ponzi operators don't enjoy. We could go on, but you get the point. When people say "Social Security is a Ponzi scheme," they're invoking a metaphor to point out that Social Security shares some but not all of the characteristics of a Ponzi scheme. This is actually not a controversial observation, or at least it used to not be controversial as we can see from Krugman's post. Like Krugman points out, Social Security stays afloat by using the payments of "new investors" (workers) to pay off "older investors" (retirees). And like Krugman acknowledges, this mechanism causes it to break down when the ratio of workers to retirees gets out of whack. Again, this is not even remotely controversial.The reason why people enjoy these "gotcha" moments with Krugman is because he always -- and I do mean literally always, as in 100% of the time -- attributes the worst possible motives to those who disagree with him. Some would say that this makes him a bit of a jackass. So it's lots of fun to see him saying the same stuff that he lambasts others for.

Excellent, getting past the semantic argument of "ponzi scheme" and all it entails and getting to the common sense root of the issue. Well done, sir!

 

[Andy Dufresne]

You've hit the nail on the head. When someone calls SS a ponzi scheme, they are describing not merely the method but also the intent. It is the latter that makes this accusation absurd IMO.

Once again you project untrue characteristics onto the opposite side of to shore up your own argument.As IK points out - how Krugmanesque.

 

[IvanKaramazov]

This kind of gotcha is dull. You all know Krugman doesn't consider SS a ponzi scheme. But you'll eagerly pretend that him saying 15 years ago that SS has a single "ponzi scheme aspect" proves he really believes it is a ponzi scheme and yet ... he supports it anyway.

Nobody thinks that Social Security is literally a Ponzi scheme. Paul Krugman doesn't, Rick Perry doesn't, you don't, I don't, etc. For one thing, Social Security isn't illegal. For another thing, governments have the ability to coerce payment from people, which Ponzi operators don't enjoy. We could go on, but you get the point. When people say "Social Security is a Ponzi scheme," they're invoking a metaphor to point out that Social Security shares some but not all of the characteristics of a Ponzi scheme. This is actually not a controversial observation, or at least it used to not be controversial as we can see from Krugman's post. Like Krugman points out, Social Security stays afloat by using the payments of "new investors" (workers) to pay off "older investors" (retirees). And like Krugman acknowledges, this mechanism causes it to break down when the ratio of workers to retirees gets out of whack. Again, this is not even remotely controversial.The reason why people enjoy these "gotcha" moments with Krugman is because he always -- and I do mean literally always, as in 100% of the time -- attributes the worst possible motives to those who disagree with him. Some would say that this makes him a bit of a jackass. So it's lots of fun to see him saying the same stuff that he lambasts others for.

The quote I read from Perry's book indicates to me that he actually DOES believe that SS is a ponzi scheme and a fraud. And I suspect a good chunk of Tea Partiers agree with him. So when you write that nobody thinks that way, I have to disagree.

I haven't read Perry's book, so I'll just say that if he really does believe that Social Security is literally a ponzi game in every respect, then he's wrong. This isn't difficult.

 

[fatguyinalittlecoat]

I haven't read Perry's book, so I'll just say that if he really does believe that Social Security is literally a ponzi game in every respect, then he's wrong. This isn't difficult.

I haven't read his book either, but I saw the first debate Perry participated in. He not only said it was a "Ponzi scheme," he also said that it's a "giant lie" or something like that. He wasn't just using "Ponzi scheme" as shorthand for "new people pay for old people."

 

[pantagrapher]

This kind of gotcha is dull. You all know Krugman doesn't consider SS a ponzi scheme. But you'll eagerly pretend that him saying 15 years ago that SS has a single "ponzi scheme aspect" proves he really believes it is a ponzi scheme and yet ... he supports it anyway.

Nobody thinks that Social Security is literally a Ponzi scheme. Paul Krugman doesn't, Rick Perry doesn't, you don't, I don't, etc. For one thing, Social Security isn't illegal. For another thing, governments have the ability to coerce payment from people, which Ponzi operators don't enjoy. We could go on, but you get the point. When people say "Social Security is a Ponzi scheme," they're invoking a metaphor to point out that Social Security shares some but not all of the characteristics of a Ponzi scheme. This is actually not a controversial observation, or at least it used to not be controversial as we can see from Krugman's post. Like Krugman points out, Social Security stays afloat by using the payments of "new investors" (workers) to pay off "older investors" (retirees). And like Krugman acknowledges, this mechanism causes it to break down when the ratio of workers to retirees gets out of whack. Again, this is not even remotely controversial.The reason why people enjoy these "gotcha" moments with Krugman is because he always -- and I do mean literally always, as in 100% of the time -- attributes the worst possible motives to those who disagree with him. Some would say that this makes him a bit of a jackass. So it's lots of fun to see him saying the same stuff that he lambasts others for.

I don't know if you believe Rick Perry or republicans in general want to dismantle Social Security, or at least in the short term turn it into a program that funnels contributions directly into private investment vehicles, but I certainly believe that. And Krugman obviously believes that. I think therefore that when Perry call SS a ponzi scheme, he is trying to erode public support for it by giving individuals the impression that the program will collapse and they will lose their money—like the last people in a ponzi scheme. Krugman does not believe that will happen. I suppose it's possible Perry cares about the future of Social Security and wants to preserve it as a program, but I personally doubt it. Krugman doubts it. And I don't think that's unreasonable at all. Is that ascribing the "worst possible motives" to Perry? Yes, but only if, like all liberals, you believe in preserving SS in something like its current form.

 

[IvanKaramazov]

I don't know if you believe Rick Perry or republicans in general want to dismantle Social Security, or at least in the short term turn it into a program that funnels taxpayer money directly into private investment vehicles, but I certainly believe that. And Krugman obviously believes that. I think therefore that when Perry call SS a ponzi scheme, he is trying to erode public support for it by giving individuals the impression that the program will collapse and they will lose their moneylike the last people in a ponzi scheme.

Like Krugman himself pointed out, Social Security does in fact run into real problems when demographics interfere with expected cash flows in and out of the program. That doesn't mean that SS literally collapses, but it does mean the current workers see their "return on investment" fall, making it an even worse long-term retirement investment than it already is (IMO of course -- some people like annuities).

Krugman does not believe that will happen. I suppose it's possible Perry cares about the future of Social Security and wants to preserve it as a program, but I personally doubt it. Krugman doubts it. And I don't think that's unreasonable at all. Is that ascribing the "worst possible motives" to Perry? Yes, but only if, like all liberals, you believe in preserving SS in something like its current form.

Obviously I don't have any problem with somebody advocating for Social Security. What I have a problem with is when somebody acts like it's evil or stupid on its face to compare Social Security to Ponzi scheme, when said person himself has done so without thinking anything of it.Edit: In other words, if Krugman was writing level-headed articles along the lines of "SS is like a Ponzi scheme on these dimensions but not on these other dimensions, and here's why the difference matters . . ." we wouldn't be having this conversation. Instead, he attacks the integrity and reading comprehension of people who point to stuff he wrote 15 years ago that's in 100% agreement with things that SS critics like me point out all the time. For some reason people like me are evil or stupid when they point out that the structure of SS creates Ponzi-like problems, but it's okay for Krugman to notice that, except that we're also evil or stupid to quote Krugman to that effect.

 

[timschochet]

You've hit the nail on the head. When someone calls SS a ponzi scheme, they are describing not merely the method but also the intent. It is the latter that makes this accusation absurd IMO.

Once again you project untrue characteristics onto the opposite side of to shore up your own argument.As IK points out - how Krugmanesque.

I believe the characteristics are true, but that is MY OPINION. That's why I wrote "IMO". You say they're untrue; that is your opinion. Neither of us is like Krugman, who arrogantly treats his own opinions as objective facts.

 

[Maurile Tremblay]

Alex Tabarrok quotes three Nobel prize winners in economics using the P-word to describe Social Security (Paul Samuelson, Milton Friedman, and Paul Krugman).

He concludes: "Of these, I agree the most with Krugman. Social Security is not necessarily a Ponzi scheme but it only generated massive returns in the past because of its Ponzi-like aspects. The Ponzi-like aspects are now over and social security is turning into what is essentially a forced savings/welfare program with, as Krugman recognizes, crummy returns for average workers."

Seems about right.

 

[Chadstroma]

Alex Tabarrok quotes three Nobel prize winners in economics using the P-word to describe Social Security (Paul Samuelson, Milton Friedman, and Paul Krugman).

He concludes: "Of these, I agree the most with Krugman. Social Security is not necessarily a Ponzi scheme but it only generated massive returns in the past because of its Ponzi-like aspects. The Ponzi-like aspects are now over and social security is turning into what is essentially a forced savings/welfare program with, as Krugman recognizes, crummy returns for average workers."

Seems about right.

Absolutely right. It is not a ponzi scheme but it has many traits of a ponzi scheme.

 

[pantagrapher]

Alex Tabarrok quotes three Nobel prize winners in economics using the P-word to describe Social Security (Paul Samuelson, Milton Friedman, and Paul Krugman).

He concludes: "Of these, I agree the most with Krugman. Social Security is not necessarily a Ponzi scheme but it only generated massive returns in the past because of its Ponzi-like aspects. The Ponzi-like aspects are now over and social security is turning into what is essentially a forced savings/welfare program with, as Krugman recognizes, crummy returns for average workers."

Seems about right.

Krugman doesn't call the returns "crummy." The whole point is that the returns, while not lavish, are guaranteed.

 

[Slapdash]

Alex Tabarrok quotes three Nobel prize winners in economics using the P-word to describe Social Security (Paul Samuelson, Milton Friedman, and Paul Krugman).

He concludes: "Of these, I agree the most with Krugman. Social Security is not necessarily a Ponzi scheme but it only generated massive returns in the past because of its Ponzi-like aspects. The Ponzi-like aspects are now over and social security is turning into what is essentially a forced savings/welfare program with, as Krugman recognizes, crummy returns for average workers."

Seems about right.

Alex's post was a pretty good takedown of some of the reactionary BS some progressives were putting out.

 

[Andy Dufresne]

You've hit the nail on the head. When someone calls SS a ponzi scheme, they are describing not merely the method but also the intent. It is the latter that makes this accusation absurd IMO.

Once again you project untrue characteristics onto the opposite side of to shore up your own argument.As IK points out - how Krugmanesque.

I believe the characteristics are true, but that is MY OPINION. That's why I wrote "IMO". You say they're untrue; that is your opinion. Neither of us is like Krugman, who arrogantly treats his own opinions as objective facts.

No. You didn't say that it was your opinion that those calling SS a ponzi scheme are meaning to say that it's intentionally fraudulent. You portrayed that as truth.Your opinion was in calling the accusation absurd.

 

[timschochet]

You've hit the nail on the head. When someone calls SS a ponzi scheme, they are describing not merely the method but also the intent. It is the latter that makes this accusation absurd IMO.

Once again you project untrue characteristics onto the opposite side of to shore up your own argument.As IK points out - how Krugmanesque.

I believe the characteristics are true, but that is MY OPINION. That's why I wrote "IMO". You say they're untrue; that is your opinion. Neither of us is like Krugman, who arrogantly treats his own opinions as objective facts.

No. You didn't say that it was your opinion that those calling SS a ponzi scheme are meaning to say that it's intentionally fraudulent. You portrayed that as truth.Your opinion was in calling the accusation absurd.

The whole thing was my opinion. Do I really need to add IMO at the end of EVERY sentence? Who's being insufferable now?