Paul Krugman is a jackass (1 Viewer)

[cubd8]

Stat. Say what you will about his economics but there's no question Krugman handles himself like a total clown. Also, it pisses me off that what's happening in Europe is being labeled as "austerity". What a fairytale that is.

What is it, if it's not austerity?

 

[ren hoek]

I don't care what you call it, but it ain't austerity.

http://reason.com/blog/2012/05/22/de-rugy-why-balanced-austerity-isnt-help

 

[Dinsy Ejotuz]

Been awhile since a true progressive has had the right wing on the run like this.

 

[ren hoek]

Here's some more cool facts. Don't let that get in the way of the circlejerk though. http://www.zerohedge.com/news/europes-phantom-austerity-spending-cuts

Absolutely agree on your point. This is stupid, Europeans for geneartions have benefitted from a variety of social programs, and in turn, have given back to the world much of our modern day culture and thinking. It is only right that they put the pedal to the metal and spend their way ot of this mess, just like the US. If you were trying to escape the sun's gravitational pull, you would aim your spaceship at the sun, using your momentum to propel your way clear once you had whipped on by. Same here, hit the gas! Things will only get better on the other side as the world propels itself to even newer horizons.

 

[adonis]

Here's some more cool facts. Don't let that get in the way of the circlejerk though. http://www.zerohedge.com/news/europes-phantom-austerity-spending-cuts

Absolutely agree on your point. This is stupid, Europeans for geneartions have benefitted from a variety of social programs, and in turn, have given back to the world much of our modern day culture and thinking. It is only right that they put the pedal to the metal and spend their way ot of this mess, just like the US. If you were trying to escape the sun's gravitational pull, you would aim your spaceship at the sun, using your momentum to propel your way clear once you had whipped on by. Same here, hit the gas! Things will only get better on the other side as the world propels itself to even newer horizons.

Here's a reply to that quote:

like the 'aim at the sun' comparison. Here are a couple of other likely outcomes:1) You burst into flames (most likely)2) You get whip-sawed through the space-time continuum and end up back in the middle ages (less likely)3) Things all work out just honky-dory (extremely unlikely)

 

[adonis]

A link to one of the better dialogues (in the comments section) on austerity.

Certainly room to argue both sides here, but I tend to believe that austerity is in place when measures are taken by the government to reduce discretionary spending for people, through tax hikes and spending cuts. It makes sense to me to exclude capital transfers and social benefits as both of those are government outlays without any real "stimulative" effects, almost like throwing income at debt.

When you pile wage cuts, pension cuts, program cuts, tax hikes, etc on all of what's going on, like in greece, you get contractionary reactions which further reduces economic output, worsening financial situations.

We're seeing it all over, in most states, in the US. Efforts by states to balance budgets in face of high debt and falling revenues (due to unemployment climbing and other factors), state governments are being forced to cut jobs, cut funding, etc, which results in further reduced wages, higher unemployment, etc. It's all a pretty rough cycle to go through, and while the states don't have much of a choice in the matter, the larger centralized governments do. (Although those in Euro don't have a lot of wiggle room due to inability to inflate/deflate their currencies and do other things).

All in all, it's an interesting time...this age reminds me somewhat of a wildfire spreading. Lots of devastation, but hopefully from the ashes will rise stronger nations and governments. THe scary thing is that times like these, preceding great turmoil and rampant trouble (akin to the depression) lay the groundwork for a lot of bad government situations and tyrannical leaders who offer clear cut, easily understood solutions and easily identifiable culprits.

Be on the lookout for this in European region, and in our own country. Tea Party folks, imo, are the closest we're seeing now...getting into office in huge numbers, with very little in terms of solutions to the problem except a strong will to see the system grind to a halt. If things continue to get worse, and they gain more power, God help us if they gain a majority and impose their will on us.

 

[ren hoek]

I tend to believe that austerity is in place when measures are taken by the government to reduce discretionary spending for people, through tax hikes and spending cuts

Of course you do. But it's not. Even the article you linked says it's not. That people actually believe modern governments shrank in size to appeal to "austerity" is completely laughable. Just accept that this global collapse is the natural and predictable circumstance of unfettered spending, bad monetary policy, overwhelming tax burdens and a failure to run sustainable budgets. We've had nothing but Keynesian policy for decades. Then the statists slap the "austerity" label on something that isn't austerity so that small-government types can deal with the agony of still being 10,000% right, yet being called wrong by people that have no idea what they're talking about. If only the State would actually try our ideas one time, they say. Of course, the government never just gives up money or power that it has. It seems that you still have a lot to learn about democracy.

 

[adonis]

That people actually believe modern governments shrank in size to appeal to "austerity" is completely laughable. Just accept that this global collapse is the natural and predictable circumstance of unfettered spending, bad monetary policy, overwhelming tax burdens and a failure to run sustainable budgets.

The data doesn't support your claims of how the global collapse came to be, in most cases (Greece excepted).

 

[Arsenal of Doom]

I tend to believe that austerity is in place when measures are taken by the government to reduce discretionary spending for people, through tax hikes and spending cuts

Of course you do. But it's not. Even the article you linked says it's not. That people actually believe modern governments shrank in size to appeal to "austerity" is completely laughable. Just accept that this global collapse is the natural and predictable circumstance of unfettered spending, bad monetary policy, overwhelming tax burdens and a failure to run sustainable budgets. We've had nothing but Keynesian policy for decades. Then the statists slap the "austerity" label on something that isn't austerity so that small-government types can deal with the agony of still being 10,000% right, yet being called wrong by people that have no idea what they're talking about. If only the State would actually try our ideas one time, they say. Of course, the government never just gives up money or power that it has. It seems that you still have a lot to learn about democracy.

Lack of a central bank and unified monetary policy is probably the biggest obstacle Europe has right now. In both nominal and real terms, the struggling economies in Europe (Greece, Ireland, Spain, etc.) have made cuts in many parts of their economies. Like ours, however, budgets are structured with certain programmatic spending. So you see spending cuts being applied in things like education and infrastructure, but programmatic increases are still happening in health care, old age support, unemployment, and other social support programs. Those programs can be reformed, and need to be, but particularly in Health Care and social support changes generally need to be graduated in and don't provide the immediate budget closing relief that is currently being dictated by Germany. On top of all of this they have the added complication of variable rates of local currency inflation. Spend a few hours going though data on Eurostat and you can see clearly how nominal spending is going down and up in various parts of those economies. The interesting thing to me is how frequently we seemed to hear a couple of years ago that these European austerity measures were the right answer to the economic crisis, and now that they have miserably failed by any reasonable account the story has changed to "they were never austerity to begin with."

 

[pantagrapher]

I love it. When the failure of Eurozone austerity can no longer be defended, deny there was austerity!

 

[humpback]

So what's your answer to their problems?

 

[Arsenal of Doom]

I think Eurobonds, as a starting point, are a good idea to stabilize regional borrowing costs and inflation. If you are going to have a shared currency in the monetary union there should also be a basic economic stabilizer and Eurobonds would provide some of that. Instead of tying participation in the bonds to immediate reductions in budget gaps, which we've seen can turn into a self-feeding contractionary cycle, I think it should be tied into long-term structural budgetary reform.

 

[RCon]

The interesting thing to me is how frequently we seemed to hear a couple of years ago that these European austerity measures were the right answer to the economic crisis, and now that they have miserably failed by any reasonable account the story has changed to "they were never austerity to begin with."

It is possible for one person/group to advocate Policy A, and another person/group implements Policy B while referring to it as Policy A. Not saying that is necessarily what has happened, but if it has, the first person/group shouldn't be castigated for rightly pointing out that Policy B is not actually the same as Policy A.

 

[Dinsy Ejotuz]

The data doesn't support your claims of how the global collapse came to be, in most cases (Greece excepted).

It doesn't. It has almost nothing to do with government debt generally. Just one of many many examples from Ezra Klein just now...

Q: Let me guess, Spain is in trouble because its government spent way too much and ran up big deficits, right?

A: Actually, no. Before the financial crisis hit in 2007, Spain was running smaller deficits than even Germany. Its total debt was a modest 27 percent of GDP. Spain was a model of fiscal responsibility.

 

[Neofight]

The interesting thing to me is how frequently we seemed to hear a couple of years ago that these European austerity measures were the right answer to the economic crisis, and now that they have miserably failed by any reasonable account the story has changed to "they were never austerity to begin with."

It is possible for one person/group to advocate Policy A, and another person/group implements Policy B while referring to it as Policy A. Not saying that is necessarily what has happened, but if it has, the first person/group shouldn't be castigated for rightly pointing out that Policy B is not actually the same as Policy A.

Why do people do this when faced with facts?

 

[humpback]

I think Eurobonds, as a starting point, are a good idea to stabilize regional borrowing costs and inflation. If you are going to have a shared currency in the monetary union there should also be a basic economic stabilizer and Eurobonds would provide some of that. Instead of tying participation in the bonds to immediate reductions in budget gaps, which we've seen can turn into a self-feeding contractionary cycle, I think it should be tied into long-term structural budgetary reform.

I think the entire concept was doomed to failure- you either have to be all in or all out, not this hybrid nonsense.

 

[Slapdash]

I love it. When the failure of Eurozone austerity can no longer be defended, deny there was austerity!

So much for that expansionary austerity meme. Particularly since the countries actually cutting spending just get in deeper and deeper trouble.

 

[humpback]

The data doesn't support your claims of how the global collapse came to be, in most cases (Greece excepted).

It doesn't. It has almost nothing to do with government debt generally. Just one of many many examples from Ezra Klein just now...

Q: Let me guess, Spain is in trouble because its government spent way too much and ran up big deficits, right?

A: Actually, no. Before the financial crisis hit in 2007, Spain was running smaller deficits than even Germany. Its total debt was a modest 27 percent of GDP. Spain was a model of fiscal responsibility.

It had nothing to do with austerity either.

 

[Slapdash]

Having a consistent trend for nominal spending isn't toying; it is the central banks job and is how depressions are avoided.

What if the US became better-suited to handle depressions post-industrialization, and we've had smooth sailing for the most part independently or even inspite of the Fed's actions?

Releasing information about various liquidity operations in real time would create a great deal of stigma which would freeze credit markets and necessitate further intervention.

You don't think the fractional reserve banking system could withstand scrutiny that way? I read a line one day about the FDIC only having 2-3% in its reserves of the money it claims to insure. The US financial system is a house of cards and I think history will show that there are no shortcuts to the system of honest money, respect for savings and real production that this country was founded on.

If that were the case, I wouldn't expect countries with less independent monetary policy to experience worse problems like pegged currencies in the late 90s or the Euro now.I don't see any reason the FDIC needs to hold more reserves than that. It is more than sufficient in normal times and had no issues scaling up to handle the largest credit crisis in a generation. I think the new method of FDIC charges under Dodd-Frank will further improve their ability to cover insured deposits.I don't think the financial system is a house of cards or that our standard of living would be possible with a much more restrictive credit environment that full reserve banking would bring about. Most of the problems with the system are tied up with Too Big to Fail and completely captured regulators. The last several years should be an example of the problems lack of credit causes. It should call into question if human nature would even allow that outcome to come to pass.

 

[RCon]

The interesting thing to me is how frequently we seemed to hear a couple of years ago that these European austerity measures were the right answer to the economic crisis, and now that they have miserably failed by any reasonable account the story has changed to "they were never austerity to begin with."

It is possible for one person/group to advocate Policy A, and another person/group implements Policy B while referring to it as Policy A. Not saying that is necessarily what has happened, but if it has, the first person/group shouldn't be castigated for rightly pointing out that Policy B is not actually the same as Policy A.

Why do people do this when faced with facts?

In this particular case, I haven't reviewed the facts near closely enough to determine whether austerity was implemented or not. My point was essentially that "austerity" is a subjective term, not an objective one. What you call austerity may not be what I call austerity.It's sort of like people who, in the face of the failure of the 2009 stimulus, now claim that the stimulus wasn't big enough and had too many tax credits in the first place. If I advocate for a "big stimulus", and you implemented something you call a "big stimulus", it's fair for me to point out that my definition of "big stimulus" isn't what you implemented, especially if you later tell me that my idea didn't work.

 

[Neofight]

Here's some more cool facts. Don't let that get in the way of the circlejerk though. http://www.zerohedge.com/news/europes-phantom-austerity-spending-cuts

Absolutely agree on your point. This is stupid, Europeans for geneartions have benefitted from a variety of social programs, and in turn, have given back to the world much of our modern day culture and thinking. It is only right that they put the pedal to the metal and spend their way ot of this mess, just like the US. If you were trying to escape the sun's gravitational pull, you would aim your spaceship at the sun, using your momentum to propel your way clear once you had whipped on by. Same here, hit the gas! Things will only get better on the other side as the world propels itself to even newer horizons.

Here's a reply to that quote:

like the 'aim at the sun' comparison. Here are a couple of other likely outcomes:1) You burst into flames (most likely)2) You get whip-sawed through the space-time continuum and end up back in the middle ages (less likely)3) Things all work out just honky-dory (extremely unlikely)

I'll admit :snot bubbles:, but why stop at only three?

 

[SacramentoBob]

Word is spreading!

In short, to use the kind of colorful language the great Nobelist favors, Paul Krugman is a jackass.

Nice validation of your thread, Stat. You were really ahead of the curve in waking people up to this guy.

 

[Slapdash]

The interesting thing to me is how frequently we seemed to hear a couple of years ago that these European austerity measures were the right answer to the economic crisis, and now that they have miserably failed by any reasonable account the story has changed to "they were never austerity to begin with."

It is possible for one person/group to advocate Policy A, and another person/group implements Policy B while referring to it as Policy A. Not saying that is necessarily what has happened, but if it has, the first person/group shouldn't be castigated for rightly pointing out that Policy B is not actually the same as Policy A.

Why do people do this when faced with facts?

In this particular case, I haven't reviewed the facts near closely enough to determine whether austerity was implemented or not. My point was essentially that "austerity" is a subjective term, not an objective one. What you call austerity may not be what I call austerity.It's sort of like people who, in the fact of the failure of the 2009 stimulus, now claim that the stimulus wasn't big enough and had too many tax credits in the first place. If I advocate for a "big stimulus", and you implemented something you call a "big stimulus", it's fair for me to point out that my definition of "big stimulus" isn't what you implemented, especially if you later tell me that my idea didn't work.

Certainly Krugman is guilty of this with regard to the Stimulus, earning his jackassery label yet again. I think only a hack would say that what is happening in the PIIGS isn't austerity or what happened here wasn't stimulus. I would make a distinction that the stimulus was followed by an improvement of the economy while austerity has been followed by a worsening. So the stimulus would seem to have a better case that more is better at that very basic level. However, these are just side issues with tight money being the culprit it both situations IMO.

 

[Neofight]

The interesting thing to me is how frequently we seemed to hear a couple of years ago that these European austerity measures were the right answer to the economic crisis, and now that they have miserably failed by any reasonable account the story has changed to "they were never austerity to begin with."

It is possible for one person/group to advocate Policy A, and another person/group implements Policy B while referring to it as Policy A. Not saying that is necessarily what has happened, but if it has, the first person/group shouldn't be castigated for rightly pointing out that Policy B is not actually the same as Policy A.

Why do people do this when faced with facts?

In this particular case, I haven't reviewed the facts near closely enough to determine whether austerity was implemented or not. My point was essentially that "austerity" is a subjective term, not an objective one. What you call austerity may not be what I call austerity.It's sort of like people who, in the fact of the failure of the 2009 stimulus, now claim that the stimulus wasn't big enough and had too many tax credits in the first place. If I advocate for a "big stimulus", and you implemented something you call a "big stimulus", it's fair for me to point out that my definition of "big stimulus" isn't what you implemented, especially if you later tell me that my idea didn't work.

Most of the people in the "stimulus wasn't big enough camp", and I'm fairly certain Krugman was among them, had a clear view on the size the stimulus needed to be from the beginning.. I certainly remember Stiglitz and Reich talking numbers back then.Now that we've gotten past that hurdle, what were you hoping for?

 

[SacramentoBob]

THe scary thing is that times like these, preceding great turmoil and rampant trouble (akin to the depression) lay the groundwork for a lot of bad government situations and tyrannical leaders who offer clear cut, easily understood solutions and easily identifiable culprits.

Those must be the OWS calling for the arrest of bankers.

 

[RCon]

The interesting thing to me is how frequently we seemed to hear a couple of years ago that these European austerity measures were the right answer to the economic crisis, and now that they have miserably failed by any reasonable account the story has changed to "they were never austerity to begin with."

It is possible for one person/group to advocate Policy A, and another person/group implements Policy B while referring to it as Policy A. Not saying that is necessarily what has happened, but if it has, the first person/group shouldn't be castigated for rightly pointing out that Policy B is not actually the same as Policy A.

Why do people do this when faced with facts?

In this particular case, I haven't reviewed the facts near closely enough to determine whether austerity was implemented or not. My point was essentially that "austerity" is a subjective term, not an objective one. What you call austerity may not be what I call austerity.It's sort of like people who, in the fact of the failure of the 2009 stimulus, now claim that the stimulus wasn't big enough and had too many tax credits in the first place. If I advocate for a "big stimulus", and you implemented something you call a "big stimulus", it's fair for me to point out that my definition of "big stimulus" isn't what you implemented, especially if you later tell me that my idea didn't work.

Most of the people in the "stimulus wasn't big enough camp", and I'm fairly certain Krugman was among them, had a clear view on the size the stimulus needed to be from the beginning.. I certainly remember Stiglitz and Reich talking numbers back then.Now that we've gotten past that hurdle, what were you hoping for?

Personally, I was not a fan of the stimulus at all. I think such things only delay the inevitable and prolong the pain. This seems to have been proved out with regards to the US. That is, the stimulus blunted some of the recession's effects, at the cost of prolonging it and delaying a recovery.In Europe's case, like I said, I haven't studied it enough to know if they implemented what I would refer to as austerity. However, I would make the argument that austerity will generally make things "worse" in the short term with the benefit of fixing things in the much longer term. Of course, Europe is a weird animal with interdependencies between countries that we don't see here, and I'm not that versed on how that manifests itself.

 

[humpback]

I would make a distinction that the stimulus was followed by an improvement of the economy while austerity has been followed by a worsening. So the stimulus would seem to have a better case that more is better at that very basic level. However, these are just side issues with tight money being the culprit it both situations IMO.

You know things aren't this simplistic. Of course stimulus is going to give a temporary boost to the economy, while cutting (or slowing the increase of) spending is going to be a temporary drag. That has to happen when government spending is part of the gdp equation. Obviously that doesn't mean that more is always better in the long run, or do you think it is?Still don't see how you think money supply is too tight- loose money is a big reason for the global problems we're experiencing right now.

 

[Slapdash]

I would make a distinction that the stimulus was followed by an improvement of the economy while austerity has been followed by a worsening. So the stimulus would seem to have a better case that more is better at that very basic level. However, these are just side issues with tight money being the culprit it both situations IMO.

You know things aren't this simplistic. Of course stimulus is going to give a temporary boost to the economy, while cutting (or slowing the increase of) spending is going to be a temporary drag. That has to happen when government spending is part of the gdp equation. Obviously that doesn't mean that more is always better in the long run, or do you think it is?Still don't see how you think money supply is too tight- loose money is a big reason for the global problems we're experiencing right now.

Yes, I was saying that more in reference to the idea that deeper austerity would prove expansionary which was advocated in many Austrian circles over the last two years. The arguement was that increased confidence would overwhelm the effects of reducing demand in the short run.Dormant monetary velocity, frozen credit, stagnant nominal spending growth, and ravenous demand for a shrinking stock of safe assets are global issues indicative of tight money particularly as it relates to dollars. I know you won't be convinced of it though.

 

[Dinsy Ejotuz]

Dormant monetary velocity, frozen credit, stagnant nominal spending growth, and ravenous demand for a shrinking stock of safe assets are global issues indicative of tight money particularly as it relates to dollars. I know you won't be convinced of it though.

Tight only because banks are hoarding it in a (futile) effort to repair their balance sheets, yes?. As I understand it that's the whole concept of a 'liquidity trap.' You can flood the market with liquidity, but it become trapped by creditors who know their loans are all bad and that they need to acquire as much cash as possible before they recognize the bad debt.

 

[tommyGunZ]

I would make a distinction that the stimulus was followed by an improvement of the economy while austerity has been followed by a worsening. So the stimulus would seem to have a better case that more is better at that very basic level. However, these are just side issues with tight money being the culprit it both situations IMO.

You know things aren't this simplistic. Of course stimulus is going to give a temporary boost to the economy, while cutting (or slowing the increase of) spending is going to be a temporary drag. That has to happen when government spending is part of the gdp equation. Obviously that doesn't mean that more is always better in the long run, or do you think it is?Still don't see how you think money supply is too tight- loose money is a big reason for the global problems we're experiencing right now.

Yes, I was saying that more in reference to the idea that deeper austerity would prove expansionary which was advocated in many Austrian circles over the last two years. The arguement was that increased confidence would overwhelm the effects of reducing demand in the short run.Dormant monetary velocity, frozen credit, stagnant nominal spending growth, and ravenous demand for a shrinking stock of safe assets are global issues indicative of tight money particularly as it relates to dollars. I know you won't be convinced of it though.

 

[tommyGunZ]

I would make a distinction that the stimulus was followed by an improvement of the economy while austerity has been followed by a worsening. So the stimulus would seem to have a better case that more is better at that very basic level. However, these are just side issues with tight money being the culprit it both situations IMO.

You know things aren't this simplistic. Of course stimulus is going to give a temporary boost to the economy, while cutting (or slowing the increase of) spending is going to be a temporary drag. That has to happen when government spending is part of the gdp equation. Obviously that doesn't mean that more is always better in the long run, or do you think it is?Still don't see how you think money supply is too tight- loose money is a big reason for the global problems we're experiencing right now.

Of course not. Why would you infer that from Slapdash's post?

 

[humpback]

I would make a distinction that the stimulus was followed by an improvement of the economy while austerity has been followed by a worsening. So the stimulus would seem to have a better case that more is better at that very basic level. However, these are just side issues with tight money being the culprit it both situations IMO.

You know things aren't this simplistic. Of course stimulus is going to give a temporary boost to the economy, while cutting (or slowing the increase of) spending is going to be a temporary drag. That has to happen when government spending is part of the gdp equation. Obviously that doesn't mean that more is always better in the long run, or do you think it is?Still don't see how you think money supply is too tight- loose money is a big reason for the global problems we're experiencing right now.

Of course not. Why would you infer that from Slapdash's post?

I asked a question you hack- why would you infer that I inferred that from his post?

 

[humpback]

Dormant monetary velocity, frozen credit, stagnant nominal spending growth, and ravenous demand for a shrinking stock of safe assets are global issues indicative of tight money particularly as it relates to dollars. I know you won't be convinced of it though.

Tight only because banks are hoarding it in a (futile) effort to repair their balance sheets, yes?. As I understand it that's the whole concept of a 'liquidity trap.' You can flood the market with liquidity, but it become trapped by creditors who know their loans are all bad and that they need to acquire as much cash as possible before they recognize the bad debt.

No, it's "tight" because we are in a tough economy. It's a "trap" because banks, et al, aren't willing to make loans at relatively low interest rates to people/businesses who aren't highly qualified. When they do make loans to less than stellar creditors, and they fail, they are accused of "predatory lending". Can you blame them for being much more selective?Slap, you're correct that I won't be convinced of it. IMO, loose money is the main culprit for many of our problems now. People, businesses, etc. had access to money that they never should have had access to. The last several years of our economy leading up to the collapse were driven by multiple bubbles, and when they pop, it's painful. There isn't a quick-fix solution that doesn't come with potentially damaging side effects.

 

[pantagrapher]

The Austerity AgendaBy PAUL KRUGMAN“The boom, not the slump, is the right time for austerity.” So declared John Maynard Keynes 75 years ago, and he was right. Even if you have a long-run deficit problem — and who doesn’t? — slashing spending while the economy is deeply depressed is a self-defeating strategy, because it just deepens the depression.So why is Britain doing exactly what it shouldn’t? Unlike the governments of, say, Spain or California, the British government can borrow freely, at historically low interest rates. So why is that government sharply reducing investment and eliminating hundreds of thousands of public-sector jobs, rather than waiting until the economy is stronger?Over the past few days, I’ve posed that question to a number of supporters of the government of Prime Minister David Cameron, sometimes in private, sometimes on TV. And all these conversations followed the same arc: They began with a bad metaphor and ended with the revelation of ulterior motives.The bad metaphor — which you’ve surely heard many times — equates the debt problems of a national economy with the debt problems of an individual family. A family that has run up too much debt, the story goes, must tighten its belt. So if Britain, as a whole, has run up too much debt — which it has, although it’s mostly private rather than public debt — shouldn’t it do the same? What’s wrong with this comparison?The answer is that an economy is not like an indebted family. Our debt is mostly money we owe to each other; even more important, our income mostly comes from selling things to each other. Your spending is my income, and my spending is your income.So what happens if everyone simultaneously slashes spending in an attempt to pay down debt? The answer is that everyone’s income falls — my income falls because you’re spending less, and your income falls because I’m spending less. And, as our incomes plunge, our debt problem gets worse, not better.This isn’t a new insight. The great American economist Irving Fisher explained it all the way back in 1933, summarizing what he called “debt deflation” with the pithy slogan “the more the debtors pay, the more they owe.” Recent events, above all the austerity death spiral in Europe, have dramatically illustrated the truth of Fisher’s insight.And there’s a clear moral to this story: When the private sector is frantically trying to pay down debt, the public sector should do the opposite, spending when the private sector can’t or won’t. By all means, let’s balance our budget once the economy has recovered — but not now. The boom, not the slump, is the right time for austerity.As I said, this isn’t a new insight. So why have so many politicians insisted on pursuing austerity in slump? And why won’t they change course even as experience confirms the lessons of theory and history?Well, that’s where it gets interesting. For when you push “austerians” on the badness of their metaphor, they almost always retreat to assertions along the lines of: “But it’s essential that we shrink the size of the state.”Now, these assertions often go along with claims that the economic crisis itself demonstrates the need to shrink government. But that’s manifestly not true. Look at the countries in Europe that have weathered the storm best, and near the top of the list you’ll find big-government nations like Sweden and Austria.And if you look, on the other hand, at the nations conservatives admired before the crisis, you’ll find George Osborne, Britain’s chancellor of the Exchequer and the architect of the country’s current economic policy, describing Ireland as “a shining example of the art of the possible.” Meanwhile, the Cato Institute was praising Iceland’s low taxes and hoping that other industrial nations “will learn from Iceland’s success.”So the austerity drive in Britain isn’t really about debt and deficits at all; it’s about using deficit panic as an excuse to dismantle social programs. And this is, of course, exactly the same thing that has been happening in America.In fairness to Britain’s conservatives, they aren’t quite as crude as their American counterparts. They don’t rail against the evils of deficits in one breath, then demand huge tax cuts for the wealthy in the next (although the Cameron government has, in fact, significantly cut the top tax rate). And, in general, they seem less determined than America’s right to aid the rich and punish the poor. Still, the direction of policy is the same — and so is the fundamental insincerity of the calls for austerity.The big question here is whether the evident failure of austerity to produce an economic recovery will lead to a “Plan B.” Maybe. But my guess is that even if such a plan is announced, it won’t amount to much. For economic recovery was never the point; the drive for austerity was about using the crisis, not solving it. And it still is.

 

[Slapdash]

Economist Paul Krugman Is a Hard-Core Science Fiction FanBy Geek's Guide to the GalaxyIf you follow the news at all, you’ve probably seen Paul Krugman — Princeton professor, New York Times columnist, and Nobel Prize-winning economist — championing the idea that government spending can lift us out of the economic crisis. What you may not know is that Krugman is also a huge science fiction fan. “I read [isaac Asimov's] Foundation back when I was in high school, when I was a teenager,” says Krugman in this week’s episode of the Geek’s Guide to the Galaxy podcast, “and thought about the psychohistorians, who save galactic civilization through their understanding of the laws of society, and I said ‘I want to be one of those guys.’ And economics was as close as I could get.”Krugman isn’t the only economist who’s into science fiction. He also counts Brad DeLong at Berkeley and many of the contributors to the Crooked Timber blog among fans of the genre.“I have friends, political scientists, sociologists, who all share an interest at least in certain kinds of science fiction,” says Krugman. “It’s speculative, we’re thinking about what society could be like.”Krugman’s involvement in the science fiction world peaked in 2009 when he attended the World Science Fiction convention in Montreal and joined author Charles Stross for a free-wheeling, hour-long discussion.“The science fiction world has a lot of people doing seriously imaginative thinking,” he says. “It’s great to get to talk to people … I mean, Charlie, of course, more than basically almost anybody on the planet, but people who are really willing to think outside of any box that you can imagine.”Despite growing up as a shy, nerdy kid, Krugman is now one the most prominent figures in the media landscape, aided in no small part by the rise of the internet and blogs, which are enabling interesting people with specialized knowledge to attract a fanbase like never before. A development, Krugman is quick to point out, that was predicted by science fiction.“If you read Ender’s Game, his brother and sister actually end up shaping planetary debate through their online aliases, and the debates they have with each other under assumed names,” Krugman says. “So all of this was prefigured, which is why science fiction is good for your ability to think about possibilities.”Read our complete interview with Paul Krugman below, in which he analyzes the cashless future of Star Trek, talks about his economics paper “The Theory of Interstellar Trade,” [PDF] and evaluates whether or not it makes good business sense to invest in a Death Star. Or listen to the interview in Episode 61 of the Geek’s Guide to the Galaxy podcast (link above), which also features a discussion between hosts John Joseph Adams and David Barr Kirtley and guest geek Sarah Brand about economics and corporations in fantasy and science fiction.Wired: You’ve said that you recently agreed to write a new introduction to Isaac Asimov’s Foundation series. What will you be talking about in your introduction? Paul Krugman: The background story is, I read Foundation back when I was in high school, when I was a teenager, and thought about the psychohistorians, who save galactic civilization through their understanding of the laws of society, and said “I want to be one of those guys.” And economics was as close as I could get. Those are pretty unique novels — they really are structured nothing like even the great bulk of science fiction, because they are about how social science can be used to save humanity. Wired: In recent years you seem to have a very good track record of predicting what’s going to happen. Do you ever feel like in some way you’ve achieved your dream of becoming a psychohistorian? Krugman: Well, no. I mean, a little bit, fine. But two things. One is, it’s a pretty limited domain. I don’t think I’ve had any great success in predicting politics or social change, nor have I really tried. In economics we do have some … you know, we don’t exactly have the laws of psychohistory, but we do have some pretty good guidelines. The other thing, of course, is in Foundation, Hari Seldon is able to put together his long term plan and actually nudge history in the direction he wants it to go, and so far I’m feeling not like Hari Seldon but like Cassandra. I keep on predicting bad things, no one will believe me, and then they happen. Wired: Is science fiction something that a lot of economists are into?Krugman: I think it’s fairly common. Not everyone, obviously, but social scientists in general … I have friends, political scientists, sociologists, who all share an interest at least in certain kinds of science fiction. It’s speculative, we’re thinking about what society could be like. Never mind the gadgets, although they create the alternative worlds, but a lot of it is thinking about society.Wired: You also mentioned that you recently re-read Frank Herbert’s Dune. What was it like going back and re-reading books like Dune and Foundation? Are they any different from what you remember? Krugman: First of all I think I have more appreciation for the craft of writing. You know, when you’re 14 or 15 and you’re reading things like this, you’re enjoying it, but I think there’s an extra depth that comes from having tried to be a writer, even if you’re a writer of — at least allegedly — nonfiction. Things were very different. When I first read Dune, I thought it was great fun. When I re-read it recently, it was, “Wow, there’s a guy who had a vision. This is not just an interesting novel. This is somebody who created a universe for himself that he really, really cared about,” and that shines through in a way that it probably did when I was 14 or 15 when I read it, but I have a deeper appreciation. And re-reading Foundation … again, there’s a lot more craftsmanship in those books than you might think. It was a very young Isaac Asimov, and he wasn’t Tolstoy, but there’s actually a lot more in the way of creating a form of storytelling that now I think I can appreciate in a way I didn’t when I first read it. Wired: Back in 2009 you appeared as a guest at the World Science Fiction Convention in Montreal. Was that your first science fiction convention? Krugman: Yeah, it was. And I really went because I thought it would be fun — as it was — to talk with Charlie Stross. That was a really interesting experience, and I may do it again if schedules mesh. The science fiction world has a lot of people doing seriously imaginative thinking, and my usual world is one where, you know, I like to hope that my friends and the people whose work I admire are adventurous thinkers, but we do tend to stick pretty close to the ground on a restricted set of issues, and it’s great to get to talk to people … I mean, Charlie, of course, more than basically almost anybody on the planet, but people who are really willing to think outside of any box that you can imagine. Wired: How did you end up doing that? Did you see that Charlie Stross was going to be there, and you got in touch with them? Or did they reach out to you? Krugman: They reached out to me, because I’ve written about him. I’m actually somewhat involved with the guys at Crooked Timber, which is an interesting blog that’s a mixture of economists and political scientists and philosophers, and actually many of them science fiction fans, and they do book symposia, and some of them knew me and knew that I was a Charlie Stross fan, so I went in, they had a symposium on Charlie Stross, and I think things keyed off from there. Wired: So how did you become a Charles Stross fan? Krugman: I think I probably was just browsing in a bookstore. As I’ve often said, you can shop online and find whatever you’re looking for, but bookstores are where you find what you weren’t looking for. I think I stumbled across The Family Trade, but then discovered that there’s much more. Wired: Yeah, I saw you described those books as “economic fiction worth reading.” What is it about the economics in those books that you thought was interesting? Krugman: The Family Trade novels involve some people who, for reasons that are not entirely clear, are able to step between alternative histories and move back and forth, and the world they come from is actually one where basically civilization has not done too well, where North America is a collection of medieval kingdoms and pretty backwards. And they of course have access to 21st-century America, so they can bring back this technology and catapult their society into the modern world.But they don’t. The society is still backwards, with just an elite that has luxuries that they can import from our universe, but they leave both the poverty and the oppressiveness of their society largely unchanged. Which is what really happens, as I said in the stuff I wrote for the Crooked Timber seminar. And Charlie actually makes the analogy. I mean, Saudi royals can go and get their education in the United States or England, and bring their western luxuries, but when all is said and done they’re still feudal lords of a feudal society, and it’s a lot harder to change a society than you might think. So the stories are very much about how just knowing that there’s a technology, knowing that an economy can be run more productively, doesn’t necessarily bring you into the modern world. Wired: Those books actually have more of a fantasy flavor than science fiction. Do you read a lot of fantasy as well? Krugman: There is a genre of fantasy that I am sometimes a sucker for, which is the “novels of prophecy,” where there’s a destiny, and little by little it unfolds, and there are revelations and prophecies, and things gradually fall into place, something like the Robert Jordan Wheel of Time novels, which I’m a sucker for mainly because life is not anything like that. Sometimes I need an escape from what life is really like, which is one damn thing after another. And the great thing about the Foundation novels is he manages to have in many ways the structure of a cycle of prophecy novels, except that the prophecies are not mystical, but because Hari Seldon and the laws of psychohistory tell you what’s going to happen next. Wired: I’ve noticed that in your public statements you often make science fiction references. For example, you’ve said that an alien attack would end the recession in 18 months, and you recently said that Fed chairman Ben Bernanke has been “assimilated by the Borg.” What kind of reactions do you get to those sorts of references? Krugman: Well, it’s funny. I mean, we live in a culture where science fiction has gone … when I was a teenager, it was very marginal, and nobody knew about it and serious people didn’t refer to it, but it’s made a lot of inroads into our culture, and “assimilated by the Borg” means, you know, a lot of us understand, that’s a very quick, very powerful metaphor for takeover by a set of institutional norms that you really shouldn’t be taken over by. Now, the problem, as it turns out, is that I think lots and lots of people know what that means, but “lots and lots of people” did not, as it turned out, include all of the editors of The New York Times Magazine, so I had to include some sentences explaining what that was about. That felt a little funny, but I guess not everybody has quite the same cultural tastes I do. The alien attack thing … there have probably been 700 movies like that — half of them starring Will Smith. Just to give you a notion of “get us to spend on something.” That’s a story people can understand. Wired: Back in 1978 you wrote an economics paper called “The Theory of Interstellar Trade.” Can you tell us what that was about? Krugman: Yeah, so first you have to understand, I was an assistant professor at that point, which actually in retrospect of course is a wonderful thing. It’s a nice job, and the worst that can happen is you end up at the number 20-ranked school by the time you get tenure instead of the number one. But it feels, at the time, you know, you’re in your 20s, and it seems like there’s a steep climb, and you’re having trouble getting anybody to pay attention, and out of frustration I blew off some steam by writing a little piece on interstellar trade. The joke was, since time of shipment is a big factor — even, actually, in real international trade — and time of shipment would be much longer in interstellar trade, how much time do you spend on shipment, considering we’ve got the theory of relativity, which says that it depends on the observer? So, you know, playing with that. And because I was blowing off steam, I actually did the economics right, so as I said in the introduction, this was a serious treatment of a ridiculous subject, which is the opposite of what we usually do in economics. There is a joke page — or there used to be — in the Journal of Political Economy, and I sent it to them, and they didn’t get it at all, so I just sat on it. But it circulated in samizdat for several decades, and in 2008 finally some people said, “Hey, can we publish this thing?” So 30 years afterward it actually got into print in the journal Economic Inquiry. It ended up saying that it actually doesn’t matter how much time elapses on the spaceship, it’s the time that elapses in the frame of reference of the people doing the investing that matters, which is of course obvious if you think about it for a second, but I was able to have some fun, and among other things put in a diagram of Minkowski spacetime, which has an imaginary time axis … which was a blank page, because, after all, it’s just imaginary. So I was having some fun. Wired: In the movie Star Trek: First Contact, a character asks Captain Picard how much it cost to build the Enterprise, and he replies, “The economics of the future are somewhat different. You see, money doesn’t exist in the 24th century. The acquisition of wealth is no longer the driving force in our lives. We work to better ourselves, and the rest of humanity.” What do you think about that? Krugman: I will say, even with all my science fiction-y stuff, that in economics … it’s not that things never change, but they change much more slowly — the underlying principles change much more slowly — than most people imagine. You can read John Maynard Keynes or Irving Fischer from the 1930s, and except for a few archaic turns of phrase it looks like they’re describing what’s happening right now. My friend — and actually fellow science fiction fan — Brad DeLong at Berkeley, actually says that Walter Bagehot‘s book from the 1870s about financial crises reads better than most of the articles you’ll see in the popular press these days. It’s true that the laws of economics are really quite different for the 21st century than they were in the 15th century, because we didn’t really have many of the features of a market economy back then. And maybe by the 24th century it’ll be different again, but I’m not so sure about that optimistic view of Captain Picard. One thing I think we see is that greed has a way of breaking through, no matter what we do on other fronts. Wired: Well, I think that’s interesting, because I think most people would look at what Captain Picard says there and say that could never happen because of human nature, because people are too greedy, but it makes me wonder, if we were able to genetically engineer people to be more altruistic, would that kind of system work, or are there still benefits to having a currency? Krugman: A market economy does have some desirable features, even leaving aside the question of greed and all that. In a way it behaves like a computer. If you’re going to make a decision between doing this and doing that, and there are resources, and you’re wondering “How do I evaluate those trade-offs?” And the answer is that market prices make it easy, it’s just one price — how much does this cost versus how much does that cost, and it’s not perfect, but much of the time it’s not a bad way of assessing what the actual trade-offs for society as a whole are. So you can represent an idealized market economy as the solution to an optimization problem. And on that optimization problem, the Lagrangians are going to tell you they look an awful lot like market prices. I think we’re probably going to have something like a market as far as the eye can see, although actually by the 24th century, since the artificial intelligences will probably be doing everything … I don’t know how they’ll do it, but we don’t need to know because they’ll do it. Wired: You’ve mentioned that you’re a fan of Iain M. Banks. What do you think about the sort of post-scarcity economy depicted in his Culture series? Krugman: Well, again, that’s what you’d love to see, and at some level, maybe eventually we can get there. We actually do know that money, that wealth, ceases mattering very much at the margin as people get sufficiently rich. It really is true that beyond a certain point … it’s not that wealth doesn’t matter at all, but that wealth doesn’t make very much difference to people’s welfare, and that other things matter very much more. So you’d like to imagine that we could eventually get to a point where we really are post-scarcity. But it’s a hard road. John Maynard Keynes wrote an optimistic essay called “Economic Possibilities for our Grandchildren” [PDF] in the ’30s where he talked about once the world was four times or eight times as rich as it was when he was writing, at that point we would no longer be concerned about material things and we could get past all of this striving and greed. And actually we are about as much richer as we were supposed to be according to his projection, and somehow the striving and greed is still with us. So it’s a further away goal than we’d like to imagine. There was a very early Heinlein novel that I ran across once in the library at Yale University — which was written in the ’40s — which was a Keynesian novel. The whole problem was that people wouldn’t spend enough, and so everything about society was designed to keep the spending going. I forget the name of it — it was actually a pretty bad novel — but it was interesting to see him playing with that idea. Wired: There’s a company called Planetary Resources that’s planning to do real-life asteroid mining. What do you think about that business model? Krugman: The first thing I thought when I saw that was, “Aha, and so the evil villain hijacks whatever the system is to move the asteroids into mining position and aims one at earth.” Haven’t we seen that movie many times? It’s one of those things where it’s just like, surely we’ve seen enough dystopian movies like that, that I probably wouldn’t go there just on that basis. Wired: Speaking of dystopias, dystopian novels are really popular right now. If you had to imagine a likely scenario for how the US could turn into a completely dystopian society, what would it be? Krugman: It’s not that hard. I mean, in some ways, when I’m having a bad day, I try to think, “What are the possible routes by which we don’t turn into a dystopian society?” I mean, we’ve got the environmental threat, which I try not to think about too often because I don’t know what to do given the political environment. But that’s huge hanging over us. We are, economically, failing to deal with this crisis we’ve got, and there’s real echoes of the 1930s in a lot of what’s going on politically, mostly in Europe, but there’s some of it here too. And information technology has been so far by and large a force for liberation, but it’s not too hard to see how it could turn into a force for the opposite. Wired: In your book The Conscience of a Liberal, you make the point that a middle class society was the result of government policy during the New Deal. And that just makes me wonder, was that just a bizarre accident that the biggest war in the history of the world happened to coincide with the most liberal president in the country’s history, creating this middle class society, and that that’s just going to be a historical accident. And so projecting into the future, things are just going to go back to normal, which is wealthy aristocrats and starving peasants? Krugman: Well, I don’t think it was totally an accident, because the truth is the same developments took place in a number of places. You know, Britain did the same transformation we did — actually more thoroughgoing than ours even over the same period. And a lot of the rest was at least partially because we as the victors of the war helped spur the reforms, but it wasn’t just an accident. We were certainly lucky in FDR, but it was a pretty likely outcome. But looking forward, it’s quite possible that the long run state, that the natural state, except for special episodes, is one of extreme inequality. One of the more fun things I wrote was back in 1996, before I was a regular writer for the Times, but I was asked to write something for the Times Magazine. That was the hundredth anniversary of the Times Magazine, and people were supposed to write essays that were written as if looking backwards from the year 2096. It’s funny because very few of the writers were actually willing to do it; they were too serious. But I was, and I wrote of a society where basically not just the middle class was gone but education was devalued and wealth came largely just from owning resources — back to the old days of a resource-based aristocracy. We still think of that “Ozzie and Harriet society,” or whatever you want to call it, that pretty decent society — obviously with its problems, but pretty decent in terms of the middle class — that we had for a generation after World War II as being somehow the natural end state of modern technology, modern development, and I guess the balance of the evidence says, no, that’s not how it works. Wired: There’s been a lot of discussion lately among economists about whether it makes sense to build a Death Star. This debate picked up this year after some Lehigh University students estimated that just the steel for a Death Star would cost $852 quadrillion, or 13,000 times the current GDP of the Earth. Do you think that a battle station is worth that kind of investment, especially considering that the ability to destroy a planet is insignificant next to the power of the Force? Krugman: Yeah, I think that’s probably right, and also, in general, you have to think that the basic trend in military technology — as with everything else — has been towards small and deadly. I think more likely we’re going to have microscopic drones that can kill everybody. So the Death Star is a very antiquated vision of what evil will look like. Evil will come in stylish, Steve Jobs-inspired designs. Wired: There was a Newsweek profile of you that quotes your mom as saying, “He was so shy as a child that I’m shocked at the way he turned out.” So how’d you go from being a shy, nerdy kid to being the kind of guy who goes around arguing with powerful people on television? Krugman: Oh, but that’s really easy, that’s impersonal. It’s an odd thing. Put me in a one-on-one with somebody, and I’m just me and probably still the same as I always was. And it’s also practice, right. The first time I wrote columns, which was many years ago, I was actually a really stiff writer. I had to learn how to do that better. The first time I was on TV I was awful. Paul Krugman's latest book lays out ways of getting out of the current economic downturn.Wired: You had a recent blog post in which you compared your number of Twitter followers to people like Lady Gaga, Miley Cyrus, and Sarah Palin. What effect does that kind of social media have on your role as a newspaper columnist? Krugman: I actually don’t tweet. I have a kind of bot that tweets when I put up a blog post. Blogs turn out to be my sort of thing, but 140 character droplets not. It’s only when there’s something that’s really breaking, when I really want to know what’s happening, I’ll read some news Twitter feed, but aside from that I don’t, so I’m not much into the social media thing. What it does mean is that I’ve got an audience. What’s happened is that the blogosphere has turned into a really effective means of having rapid fire, real time intellectual discussion, and I guess the social media helps to bring that together, because people are more aware of what’s happening in an even shorter period of time. But I don’t do social media directly myself because I’d be swamped. Wired: Does that give you more independence, do you think, because even if The New York Times were to fire you, you would still have this online audience? Krugman: Well, that’s not what I think of much, but I think the Times is aware of the online audience. That’s the kind of thing that they want to see happening, and they’re even friendlier than they would be otherwise, but … you know, things are happy with me and the Times right now, because I sell papers. And I actually sell digital subscriptions too, and the Times paywall thing is going pretty well, so we’re all happy. Wired: Do you have any ideas about how punditry might develop into the future with all this electronic stuff? Krugman: It’s interesting. It does mean that you don’t have to have the imprimatur of a major media organization, and I’m not sure exactly how major media organizations are going to survive in the long run. I think the Times is doing pretty well at this, but it’s a long, tough haul. So it does mean that anybody who is smart and writes well and is able to react can get into this. I think we thought for a while that it was going to be very democratizing, and it turns out not to be. It turns out that because people have limited attention and have to make priorities, you end up with what is a very hierarchical system, in which a few people really do garner the great bulk of the attention in any particular area of discussion. So I’m not sure whether it may not even at some level be even more oligarchic, in a peculiar sort of way, than the old system. But it certainly means that there’s more variety of the ways in which somebody can come to have an intellectual role in shaping discussion. By the way, science fiction prefigured that. If you read Ender’s Game, his brother and sister actually end up shaping planetary debate through their online aliases, and the debates they have with each other under assumed names. So all of this was prefigured, which is why science fiction is good for your ability to think about possibilities. Wired: So your new book is called End This Depression Now! What’s that about? Krugman: Well, look, we’re suffering the greatest economic disaster since the 1930s. An enormous human cost, never mind the dollars. We’ve got 13 million people unemployed, another probably 12 million or so that are involuntarily underemployed, 4 million people who’ve been out of work for more than a year. This is a huge catastrophe, and it doesn’t have to be happening. The basic economics of how to solve this are very clear, and have been confirmed by recent events. There are quite straightforward policies that could bring us out of this very fast, but we’re not doing it, and we’re not doing it partly because no one is making that case clearly and effectively. I’ve been trying, in the column and in the blog, but those short form arguments have their limits. If I make some point in a column or a blog post, people will say, “Well, but what about this?” or “What about that?” And the answer is, “Well, actually I’ve answered those on a previous occasion.” But it’s just a series of memos. So the book takes all that and puts it together. The arguments about why this doesn’t have to be happening, why the objections to the things that could get us out — which is first and foremost government spending, temporarily, but we need the government spending now, some change in monetary policy, and some work on debt relief. It puts all that together in one place, with some new material also, but presenting that long form argument. There’s still a place for books that make a long form argument in an attempt to move the discussion, to get us to actually, finally, after trying all the alternatives, do the right thing. Wired: If people want to keep up with you and other economists online, which websites and blogs should they be following? Krugman: I read The New York Times, The Financial Times — the Financial Times has a blog, FT Alphaville, which is just for market stuff, but the next stop is a blog called Economist’s View, which is Mark Thoma at the University of Oregon. It’s a personal blog, but he actually gathers material and produces what really amounts to a daily economics magazine, with links to much of the stuff that’s going on out there in the discussion. Brad DeLong at Berkeley has a more personal blog. He was there first; he was an inspiration to me to start doing it, and he’s still a really interesting guy. I read a bunch of others in rotation, but I think basically I start each morning with those, and then I actually usually read a couple of more political blogs: Ezra Klein at the Washington Post, Greg Sargent, also at the Washington Post, on more politics, The Washington Monthly. And at that point it’s time to prepare the next class, so I move on from the blogosphere and start putting my lecture notes together.

From wired. Interesting throughout.

 

[Andy Dufresne]

Regarding Star Trek...

The reason that there is no need for money in the Trek future is that they know how to convert energy to matter and apparently have a neverending supply of the latter. With that in place, you have no shortage of resources for anyone and thus, virtually no need for economics.

 

[Slapdash]

Regarding Star Trek...The reason that there is no need for money in the Trek future is that they know how to convert energy to matter and apparently have a neverending supply of the latter. With that in place, you have no shortage of resources for anyone and thus, virtually no need for economics.

It is easy for me to imagine, in that scenario, that rents would accrue to the holders of intellectual property. People could have a machine capable of replicating a car, but would have to pay fees to use any particular design. Much like technology has made music and other forms of media not at all scarce and the marginal cost extremely low, yet prices are just as high if not higher. I think there would still be people to argue that no one would innovate without the profit incentive. I think our recent experiences with technology have shown that, absent government redistribution, it leads towards a less equal society. Not a more equal one envisioned in the series/movies. If you assume that trend holds in the future then the division will just continue to grow. In the end, I think you would need both human nature and technology to change to facilitate a Star Trek economy. I’m not sure technology is sufficient by itself.

 

[Slapdash]

My favorite part:

Wired: There’s been a lot of discussion lately among economists about whether it makes sense to build a Death Star. This debate picked up this year after some Lehigh University students estimated that just the steel for a Death Star would cost $852 quadrillion, or 13,000 times the current GDP of the Earth. Do you think that a battle station is worth that kind of investment, especially considering that the ability to destroy a planet is insignificant next to the power of the Force?

Krugman: Yeah, I think that’s probably right, and also, in general, you have to think that the basic trend in military technology — as with everything else — has been towards small and deadly. I think more likely we’re going to have microscopic drones that can kill everybody. So the Death Star is a very antiquated vision of what evil will look like. Evil will come in stylish, Steve Jobs-inspired designs.

 

[Andy Dufresne]

Regarding Star Trek...The reason that there is no need for money in the Trek future is that they know how to convert energy to matter and apparently have a neverending supply of the latter. With that in place, you have no shortage of resources for anyone and thus, virtually no need for economics.

It is easy for me to imagine, in that scenario, that rents would accrue to the holders of intellectual property. People could have a machine capable of replicating a car, but would have to pay fees to use any particular design. Much like technology has made music and other forms of media not at all scarce and the marginal cost extremely low, yet prices are just as high if not higher. I think there would still be people to argue that no one would innovate without the profit incentive. I think our recent experiences with technology have shown that, absent government redistribution, it leads towards a less equal society. Not a more equal one envisioned in the series/movies. If you assume that trend holds in the future then the division will just continue to grow. In the end, I think you would need both human nature and technology to change to facilitate a Star Trek economy. I’m not sure technology is sufficient by itself.

I would agree with all that. I don't think the economic future envisioned by Star Trek is at all attainable.

 

[Arsenal of Doom]

Huh, so Krugman is a huge dork. Go figure.

 

[Slapdash]

Regarding Star Trek...The reason that there is no need for money in the Trek future is that they know how to convert energy to matter and apparently have a neverending supply of the latter. With that in place, you have no shortage of resources for anyone and thus, virtually no need for economics.

It is easy for me to imagine, in that scenario, that rents would accrue to the holders of intellectual property. People could have a machine capable of replicating a car, but would have to pay fees to use any particular design. Much like technology has made music and other forms of media not at all scarce and the marginal cost extremely low, yet prices are just as high if not higher. I think there would still be people to argue that no one would innovate without the profit incentive. I think our recent experiences with technology have shown that, absent government redistribution, it leads towards a less equal society. Not a more equal one envisioned in the series/movies. If you assume that trend holds in the future then the division will just continue to grow. In the end, I think you would need both human nature and technology to change to facilitate a Star Trek economy. I’m not sure technology is sufficient by itself.

I would agree with all that. I don't think the economic future envisioned by Star Trek is at all attainable.

I agree, but I'm inclined to think our future is pretty dystopian if at all. I'm curious though, do you think the type of economic future envisioned by Star Trek would even be desirable?

 

[Andy Dufresne]

I agree, but I'm inclined to think our future is pretty dystopian if at all.

Me too. I've consumed a lot of sci-fi in my time. Coupling that with my real-life observation that human nature doesn't change (at our core, we're all selfish) either one of two things happen - a) our technology outpaces our ability to handle it resulting in a "With Folded Hands" or "Terminator" type future or b) we change human nature through our technology resulting in something like a THX-1138 society.

I'm curious though, do you think the type of economic future envisioned by Star Trek would even be desirable?

Not really. I think it would alter the human condition much to the detriment.You think we've got lifestyle inequality now? I think it would lead to a division something like the Morlock/Eloi situation of The Time Machine except that the Morlock would get there because they indulged their base instincts whereas the Eloi would be freed to explore their creative side. But the two would end up being incompatible with each other.

 

[Arsenal of Doom]

I agree, but I'm inclined to think our future is pretty dystopian if at all.

Me too. I've consumed a lot of sci-fi in my time. Coupling that with my real-life observation that human nature doesn't change (at our core, we're all selfish) either one of two things happen - a) our technology outpaces our ability to handle it resulting in a "With Folded Hands" or "Terminator" type future or b) we change human nature through our technology resulting in something like a THX-1138 society.

I'm curious though, do you think the type of economic future envisioned by Star Trek would even be desirable?

Not really. I think it would alter the human condition much to the detriment.You think we've got lifestyle inequality now? I think it would lead to a division something like the Morlock/Eloi situation of The Time Machine except that the Morlock would get there because they indulged their base instincts whereas the Eloi would be freed to explore their creative side. But the two would end up being incompatible with each other.

I'm at the complete other end of the spectrum. If you look at the overall trends in human rights, living conditions/quality of life, life expectancy, education, etc., they are all extremely positive in relationship to technological and economic development of the world. I don't see any reason to forecast a major change in those trends. Obviously there are major issues that will need to be faced; in no particular orderealing with the fallout from global climate changeFinding a stable and sustainable global populationRelated to the above, figuring out a sustainable model for health care costsConverting to renewable/sustainable energy sourcesI believe that all of these problems are solvable, and technology can/will play a large role.

 

[tommyGunZ]

I agree, but I'm inclined to think our future is pretty dystopian if at all.

Me too. I've consumed a lot of sci-fi in my time. Coupling that with my real-life observation that human nature doesn't change (at our core, we're all selfish) either one of two things happen - a) our technology outpaces our ability to handle it resulting in a "With Folded Hands" or "Terminator" type future or b) we change human nature through our technology resulting in something like a THX-1138 society.

I'm curious though, do you think the type of economic future envisioned by Star Trek would even be desirable?

Not really. I think it would alter the human condition much to the detriment.You think we've got lifestyle inequality now? I think it would lead to a division something like the Morlock/Eloi situation of The Time Machine except that the Morlock would get there because they indulged their base instincts whereas the Eloi would be freed to explore their creative side. But the two would end up being incompatible with each other.

I'm at the complete other end of the spectrum. If you look at the overall trends in human rights, living conditions/quality of life, life expectancy, education, etc., they are all extremely positive in relationship to technological and economic development of the world. I don't see any reason to forecast a major change in those trends. Obviously there are major issues that will need to be faced; in no particular orderealing with the fallout from global climate changeFinding a stable and sustainable global populationRelated to the above, figuring out a sustainable model for health care costsConverting to renewable/sustainable energy sourcesI believe that all of these problems are solvable, and technology can/will play a large role.

I agree 100%. And I think your last point (converting to renewable energy sources) is the reason for the most optimism. We're on the cusp of essentially solving one of life's biggest problems, forever. The boom we'll get from the conversion from fossil fuels to clean, sustainable energy will be the greatest this planet has ever seen.

 

[bueno]

Amy Goodman gets half an hour with "Ron" Paul "Kruger" Krugman.

Krugman is brilliant.

A guy that believes in maximum government spending, maximum Fed intervention, and doesn't see any merit in auditing the Fed is hailed by the establishment as the genius economist of our time.seems legit

Yeah, it's legit. Guy is globally recognized as being one of the top minds in his field. But of course since he disagrees with you, start the wild gov't conspiracy theories.

I don't doubt that Krugman actually believes what he's saying, I just think he's wrong. What wild conspiracy theories have I talked about on these boards?

The one in the post I quoted, where you seem to be insinuating that the establishment has conspired to anoint an undeserving economist as a Nobel Prize winner.Are you an economist Ho3k?

Soft science models are difficult to defend. Nobel prizes for economics are almost as insignificant as the Nobel Peace Prize.

 

[bueno]

I agree 100%. And I think your last point (converting to renewable energy sources) is the reason for the most optimism. We're on the cusp of essentially solving one of life's biggest problems, forever. The boom we'll get from the conversion from fossil fuels to clean, sustainable energy will be the greatest this planet has ever seen.

You seriously believe that?

 

[RCon]

I agree 100%. And I think your last point (converting to renewable energy sources) is the reason for the most optimism. We're on the cusp of essentially solving one of life's biggest problems, forever. The boom we'll get from the conversion from fossil fuels to clean, sustainable energy will be the greatest this planet has ever seen.

You seriously believe that?

Are you asking him whether he believes that it is one of life's biggest problems, or that we're on the cusp of solving it?

 

[Don Quixote]

Krugman wrote this piece.

President of Estonia takes to Twitter to respond:

Let's write about something we know nothing about & be smug, overbearing & patronizing: after all, they're just wogs

Guess a Nobel in trade means you can pontificate on fiscal matters & declare my country a "wasteland". Must be a Princeton vs Columbia thing

But yes, what do we know? We're just dumb & silly East Europeans. Unenlightened. Someday we too will understand. Nostra culpa.

Let's ##### on East Europeans: their English is bad, won't respond & actually do what they've agreed to & reelect govts that are responsible.

 

[Slapdash]

Krugman wrote this piece.

President of Estonia takes to Twitter to respond:

Let's write about something we know nothing about & be smug, overbearing & patronizing: after all, they're just wogs

Guess a Nobel in trade means you can pontificate on fiscal matters & declare my country a "wasteland". Must be a Princeton vs Columbia thing

But yes, what do we know? We're just dumb & silly East Europeans. Unenlightened. Someday we too will understand. Nostra culpa.

Let's ##### on East Europeans: their English is bad, won't respond & actually do what they've agreed to & reelect govts that are responsible.

President of Estonia needs to learn to hide his butthurt better.

 

[pettifogger]

http://krugman.blogs.nytimes.com/2012/06/05/two-self-promotional-videos/

This is from last week on Krugman's European tour.

You can tell it is a British talk show because the comments are much more extended, rather than sound bite/talking points boiled down to 20 seconds each from hired "strategists." And, the background wallpaper appears to depict the ghosts of ancient Greek philosophers. (Maybe it's a night picture of the Elgin Marbles, stolen from the face of the Parthenon, which sit in the British Museum currently.)

Anyway, I like how Krugman (in my view anyway) basically destroys the "We should run the government like we run our household" argument, repeating what's in his column pasted a few posts above, and turns the false moralizing "what about the debt we leave to our children" argument back on them. The Tory MP is left to argue that recent graduates, finding the job market barren, should just start their own businesses. (Or as Mitt Romney recently argued, they can just borrow money from their parents.)