Gothamist: Paul Krugman Wins Nobel Prize in Economics

Bottomless Chips

Tue, 14 Oct 2008 14:05:59 -0500

@#30: Each instance you cite was not because of JP Morgan or any banker, it was because of government regulation and the moral hazard of government backing. They are akin to Fannie and Freddie; government-backed industries leads to riskier behavior. Back in regards to 1907, which I'm more versed in, it comes down to this: credit cycles by market influence have calmer bursts than Fed created cycles. We could see our currency completely debauched through hyperinflation today. That wasn't the case when it was gold and silver backed; though the value was perceived to be weaker in the panics, gold and silver was still real money. The dollar could be essentially worthless with our current crisis. Would I rather have that or brief periods of recession where excess liquidity is purged--debts liquidated, credit is tightened, and the monetary supply is deflated? Or would I rather have my 401k wiped out and my savings in dollars be worth nothing? I'll choose the former. I was incorrect in saying there are no booms and busts and tried to clarify that with my #26 post. What we're seeing now is different than any of the three panics you mentioned. We're compounding our problem with the only tool they have (inflation) and we'll see a much bigger collapse than 1907.

NannyState

Mon, 13 Oct 2008 22:55:25 -0500

@#26:The Depression of 1877, The Depression of 1892, and the Panic of 1908 all preceded the rise of regulation and the Progressive Movement which a Republican, Theodore Roosevelt championed during his stay in office. After the panic of 1908, it was abundantly clear that the nation could no longer afford to allow its economy to be dominated by the likes of J.P.Morgan and Jay Gould who were monopolizing "liquidity" at that time. So the Federal reserve was established to undergird the banks and oversee monetary policy. If you read your history, you would find that that panic a hundred years ago nearly drove the entire US into insolvency. Nothing drives "Socialistic movements" like Free Market ideologues!

chubbyemu

Mon, 13 Oct 2008 17:23:53 -0500

What I think is funny is that everyone here is talking ling Krugman is the most radical economist out there. He is not. He's politically liberal sure and critical of neo-classical theory as well, but he is in no way as much of crazy-Marxist-radical as some of your are making him out to be. I guess that just shows how black and white people continue to view economics in this country. At any rate, I'm glad to hear he won.

TSOL

Mon, 13 Oct 2008 17:11:26 -0500

Former Enron advisor makes good!

angry_pickle

Mon, 13 Oct 2008 16:53:10 -0500

Slavery and colonialism are NOT modern capitalism. I didn't say they were. But if you need to have slaves or conquer other countries to further your greed, you are free to do so by capitalism. slavery prevents market allocation of labor (This is why slavery produces almost no doctors) Which is why capitalism would divide the population into a spectrum from slaves do to the worst and most painful tasks at the cheapest possible wages at which a man can still stand and not die too soon from starvation (else that would increase prices due to high cost of raising strong slave babies) to non-slaves from where doctors, lawyers, and wine connoisseurs would come from. taxes are directed to maintain the system and the real costs are not paid by the consumer In what economy would taxes not be used to maintain a system? Where would those taxes be used for instead? Even a fat @ss monarchy spends the money to maintain his power over his kingdom. And who pays the "real costs"? Does that mean real costs are paid by producers? In which galaxy does this happen?

Bottomless Chips

Mon, 13 Oct 2008 16:05:16 -0500

Boom and bust economies have been around since the advent of the speculative market economy. I should've been clearer: These types of booms and busts did not occur prior to 1913. A fiat currency encourages speculation and malinvestment to these types of bubbles. You don't get any of that under hard money.

sinisterteashop

Mon, 13 Oct 2008 15:45:52 -0500

I think we're not on the same page on booms and busts. I'm talking about it in the economic sense There's a huge 19th century speculation bubble in America which I can't remember the name of. There's also this a century before in England: http://en.wikipedia.org/wiki/South_Sea_Bubble Boom and bust economies have been around since the advent of the speculative market economy.

Bottomless Chips

Mon, 13 Oct 2008 15:38:59 -0500

#21, okay it was the Dept. of the Interior. My mistake. Secondly, I think we're not on the same page on booms and busts. I'm talking about it in the economic sense: the boom of NASDAQ and the '90s, and the bust that we're seeing now. Thought I've never heard it used that way, I guess it could refer to a scandal booming and busting.

Bottomless Chips

Mon, 13 Oct 2008 15:35:15 -0500

Boom and bust paved the way for the creation of the FDIC. Read your American history or at least wiki it. I may be wrong, but the Teapot Dome Scandal was corruption under Harding's watch, right? By the Dept. of Energy. And Hardin was in the '20s. The Federal Reserve Act was 1913. If I'm correct there, what does this have to do with the line you quoted. Secondly, the FDIC is not a good thing.

jterry121

Mon, 13 Oct 2008 15:19:10 -0500

LMFAO@ The Edge - So having a middle class that spends 90% of its time shopping at malls & sitting on their A$$ watching reality TV shows is what makes a nation powerful.

sinisterteashop

Mon, 13 Oct 2008 15:03:51 -0500

Boom and busts never happened before the Federal Reserve Act. Boom and bust paved the way for the creation of the FDIC. Read your American history or at least wiki it. http://en.wikipedia.org/wiki/Teapot_Dome_scandal

Bottomless Chips

Mon, 13 Oct 2008 14:46:36 -0500

Quidman, I don't know where to begin. You're just spouting rhetoric with no fact except for twisting history. 1. If free market capitalism cannot serve humanity, what can? Please cite an example of socialism or corporatism where it has worked? Africa is full of despotic rulers and imperialist regimes, so they're hardly humane. You won't find any examples in Europe. What about Asia? Nope. None there. 2. I assume you don't understand free market economics and the Austrian school. As things presently stand, few can afford healthcare in this country with the government regulating and subsidizing health care. And we want more regulation and more subsidizing when we already can't afford it? This is really another conversation altogether. 3. The Great Depression was not a failure of capitalism, it was another failure of government. Even Helicopter Ben acknowledges the GD was because of the Fed, which is what Friedman also theorized. Our most basic needs can't be warehoused or otherwise set aside when there is a downturn in the cycle of boom and bust. Boom and busts never happened before the Federal Reserve Act. The Fed created the boom in the 1920s and then the GD of the '30s was the result of government trying to rescue everyone. We're seeing something similar today. America is not free market. You are as much in need of a wakeup call as those guys on the street handing out fliers and waiting for the proletarian revolution. Again, I would say you're in need of the wakeup call. The US is not free-market; it's highly regulated, we socialize costs amongst all of us, and we're all taxed over 3 times (federal, state, local). All of which is highly contradictory to a true free-market. If anything, this is a failure of neo-Keynesian economics. It's time to try the true free-market approach.

The Edge

Mon, 13 Oct 2008 14:36:23 -0500

#17- Not going to happen unless China magically develops a middle class. But you'd know that if you'd actually been there before.

Quidnam

Mon, 13 Oct 2008 14:00:15 -0500

"In 'modern' or 'western' you have regulation, socialization of costs, transfers of wealth, and central economic planning. None of that is congruent with free market capitalism." Bottomless Chips: *Humanity* is not congruent with free market capitalism. You see, we beings of flesh and blood are not completely fungible. Our most basic needs can't be warehoused or otherwise set aside when there is a downturn in the cycle of boom and bust. Moreover, not everyone is willing to play by the rules. If your libertarian wonderland of laissez faire non-interventionism were actually implemented, you would likely find yourself on the wrong side of a mob of unemployed folks without a safety net -- and your privatized security arrangements (and possibly medical bills) would no doubt cost a great deal more than your proportional share of the NYPD. The closest thing to your ideal failed miserably with the Great Depression. The last three decades of your think tanks (AEI, Cato, et al) working overtime to enact an ideological agenda of deregulation and privatization has sown the seeds of our current financial crisis, recession and extreme stratification of wealth. Human society cannot be tenably organized along the extremes of either left or right ideologies. You are as much in need of a wakeup call as those guys on the street handing out fliers and waiting for the proletarian revolution. We need to concern ourselves with pragmatic approaches to public policy and socioeconomic sustainability -- not dogma.

jterry121

Mon, 13 Oct 2008 13:48:22 -0500

Bill O'Reilly just had a stroke LMFAO @ "Communist" still being an Insult. China is the worlds most powerful nation by far. Your kids will all be learning to speak Mandarin, commie haters.

Bottomless Chips

Mon, 13 Oct 2008 12:59:35 -0500

I assume you were being sarcastic. I seriously wonder about people who put their faith into modern capitalism .. a system that only existed for the past 300 years. 300 tiny years and in those tiny years, caused the enslavement and exploitation of numerous non-European countries, that has seen economic disaster of numerous countries, that has seen the destruction of the physical earth at an alarming rate for the sake of capitalistic advancement. And I see how crap and propoganda fed into your head as a kid is just so difficult to clean out. I personally don't know all the details of Marxism and I strongly suspect his views aren't the only alternatives to capitalism, but the knee-jerk crying whenever socialistic elements appear is ridiculous. So you admit to not knowing the details, yet you authoritatively claim that capitalism is a 300 year old sham? 1. The environment: Who has worse pollution than the US? Ding! Socialist or formerly socialist countries. True capitalism has stringent property rights laws. 2. Enslavement and exploitation: #15 said everything I needed to say, but to add on, true capitalism pays you a true wage for what your labor's worth. So those doing tough, but rather unskilled jobs may be making paltry sums. However, more people are working and making money than a system where you have a minimum wage. 3. Faith in modern capitalism: Modern capitalism is kind of a phony term; my friend calls it "western-capitalism" which is also a weird term. Neither is true capitalism. In "modern" or "western" you have regulation, socialization of costs, transfers of wealth, and central economic planning. None of that is congruent with free market capitalism.

ANGRYGOD11

Mon, 13 Oct 2008 12:45:19 -0500

Slavery and colonialism are NOT modern capitalism. The markets are rigged to favor the "mother" country, slavery prevents market allocation of labor (This is why slavery produces almost no doctors), taxes are directed to maintain the system and the real costs are not paid by the consumer. It would be nice if people who blather about Marx or economics knew a little bit of what they were talking about.

jpeditor

Mon, 13 Oct 2008 12:27:15 -0500

" caused the enslavement and exploitation of numerous non-European countries," You are referring to Islam and communism...

JacqueMehoff

Mon, 13 Oct 2008 12:20:13 -0500

oh that's marx, then I'm down with teh marx. damn skippy, you bet and whatever terms you wasps love to use.

ides_of_march

Mon, 13 Oct 2008 12:16:38 -0500

"I luv marx. yeah for the red team." What exactly is the appeal? Is it the food shortages, enforced famine, denial of basic liberties, the punishment of the productive and the rewarding of the lazy, dictatorship of the proletariat or the drab clothing?

angry_pickle

Mon, 13 Oct 2008 12:15:49 -0500

Score another one for Marx. I assume you were being sarcastic. I seriously wonder about people who put their faith into modern capitalism .. a system that only existed for the past 300 years. 300 tiny years and in those tiny years, caused the enslavement and exploitation of numerous non-European countries, that has seen economic disaster of numerous countries, that has seen the destruction of the physical earth at an alarming rate for the sake of capitalistic advancement. And I see how crap and propoganda fed into your head as a kid is just so difficult to clean out. I personally don't know all the details of Marxism and I strongly suspect his views aren't the only alternatives to capitalism, but the knee-jerk crying whenever socialistic elements appear is ridiculous.

r1b2

Mon, 13 Oct 2008 11:58:10 -0500

BTW, not a day goes by that Marx isn't supported in the news.

r1b2

Mon, 13 Oct 2008 11:57:38 -0500

Krugman is a wonderful professor with keen insights who also happens to be a very good writer. His arguments are sound AND a pleasure to read. Congratulations.

JacqueMehoff

Mon, 13 Oct 2008 11:54:32 -0500

I luv marx. yeah for the red team.

ides_of_march

Mon, 13 Oct 2008 11:51:30 -0500

Score another one for Marx.

Think twice

Mon, 13 Oct 2008 11:16:53 -0500

He put out a NY Times Op-Ed just yesterday (before he was awarded).

Politburo

Mon, 13 Oct 2008 11:11:54 -0500

glenn - Friedman and Stigler have also been awarded the prize (it's technically not a Nobel), but let's not let facts get in the way of your 2 minute hate..

Rfive

Mon, 13 Oct 2008 11:11:38 -0500

one of the better reasons to read (but not buy) the times...

glennQNYC

Mon, 13 Oct 2008 11:03:04 -0500

The Nobel commies grant a "self-proclaimed liberal" an award... And this is news?

Jen Chung

Mon, 13 Oct 2008 11:01:58 -0500

I was recently looking at Krugman's "The Great Unraveling"--his book of collected columns--and his 1998 Fortune article about the Asian economic crisis of the late 1990s is eerie: "All those irresponsible loans created a boom in real estate and stock markets, which made the balance sheets of banks and their clients look much healthier than they were."

Peter

Mon, 13 Oct 2008 10:59:11 -0500

He also predicted the housing crash before most other economists.