Paul Krugman Awarded Nobel Prize For Economics 425
zogger writes in his journal, "The guy who put together the concept of geographical location combined with cheap transportation leading to 'like trades with like' and the rise of superindustrial trading blocs has won the Nobel economics science prize. He's a bigtime critic of a lot of this administration's policies, and is unabashedly an FDR-economy styled fella. Here is his blog at the NYTimes." Reader yoyoq adds that Krugman's career choice was inspired by reading Asimov's Foundation series at a young age.
Seems like a very cool guy (Score:3, Interesting)
http://www.pbs.org/newshour/video/module.html?mod=0&pkg=13102008&seg=5 [pbs.org]
Would this be the same FDR-economy... (Score:1, Interesting)
that prolonged the Great Depression by 7 years or so?
http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx?RelNum=5409 [ucla.edu]
Brilliant stuff...
We really should have listened to him 3 years ago (Score:5, Interesting)
Safe as Houses [nytimes.com]
A snippet (only 3 paragraphs to fall within fair use):
Whine all you want about the Nobel Committee having a political agenda. Right is right. And Krugman was right.
Re:Would this be the same FDR-economy... (Score:2, Interesting)
Any economist can look at any data and come to any conclusion.
2 UCLA economists' opinion is not a consensus though it's certainly not "proven" that what FDR did helped either.
Interstellar trade (Score:1, Interesting)
Let us not forget his contributions to the field of interstellar trade:
http://www.princeton.edu/~pkrugman/interstellar.pdf
Re:Agenda: It's everywhere! (Score:5, Interesting)
Conservative talk radio is consistent? Actually let's put this in context. [fill in the blank] talk radio is consistent?
One thing that people have to remember is that conservatives more likely than not are not going to win awards. And that liberals will...
Think hard about this. What is a conservative? Somebody who believes in their ideals and fundamentals. Thus they are not thinking about the future, but the past.
On the other hand a liberal challenges the notion of today and looks at what could be.
A conservative today is yesterday's liberal.
Go back in history and look at conservative stances, and liberal stances.
Women rights: Conservative of 2000 would say hey yes why not. Liberal of 1800 would say "hey yes why not." Conservative of 1800 would say, "blasphemy"
So you see, a conservative will always be two or three, or four steps behind the real action...
Krugman wasn't the only one (Score:2, Interesting)
"Whine all you want about the Nobel Committee having a political agenda. Right is right. And Krugman was right"
You act like Krugman was the only one warning us about the housing bubble, when he was one of many, a lot of them being the very people he despises. It's not like Krugman was the first one to go "Hey, this thing is gonna burst".
Re:One more nobel winner anti-reaganmics (Score:2, Interesting)
Like the regulations that prevented the current bubble? Or the dot-com bubble before that? Sure, sure, give us more of those enlightened commandments. ;-)
It's naive of you not to consider government regulations as part of corporations' 'malfeasance' plans. The tax exemption for companies manufacturing child toy arrows on the latest bailout bill, is a small example. While I do not agree with his views on monetary policy, Milton Friedman was right on the money when he said: "When you have big government, big business takes it over.".
The 'hedge' you speak of is currently being stuck up the taxpayer's behind. It's something that came out of a head not unlike this Nobel 'mixed economy' laureate. All for the general public's welfare, of course.
In a free market if you fail you bear the consequences, in Communist US there is the Fed. :-)
True of all "social sciences" (Score:3, Interesting)
Economics, a fine scholarly field, is not a science, as much as some economists would like to pretend with their crude algebra and stats.
This is one of the things that makes Krugman in particular so insufferable about his profession. He places far too much importance on it in relation to it's actual value. Like all social sciences... sociology, psychology, political science... economics is not a hard science. It's a genuine field of study that uses some math and some science to reach conclusions, but also depends upon human behavior, which is not easily quantified, and cannot be quantified with any scientifc certainty or accuracy in many cases.
This doesn't mean the fields are of no importance... they certainly are... but they're not pure science, and I have a hard time with calling some a political "scientist" or a social "scientist".
Re:Fixing Republican Depressions, yet again. (Score:5, Interesting)
We had bubbles and depressions before FDR, but the government had very little power to interfere in the recovery process, and they were typically over in two years or less.
Your assertions don't square against known history. The panic of 1857 was interrupted only by the civil war. The panic of 1873 lasted five years. The panic of 1893 lasted nearly four.
And in all of them, the American governments of the day did indeed try to take various measures to stop them, although they weren't always very effective.
And these panics were far more serious. For people who lost their life savings in a supposedly guaranteed savings account, they could be literally deadly, given that retirees did not have Social Security to fall back on. If you didn't have an extended family who could provide food, you could (and would) starve to death.
Insofar as your attack on FDR and farm price supports, you are clearly not aware that some goods and services (most notably rail transportation) did not substantially fall during that period. The result: it cost more to transport goods to market than you could get by selling them. So your idea that there would be food for all, if only bad old FDR hadn't stopped the market from working, is, to put it mildly, completely unsupported by fact.
I would go on, but given the tenor of your original post, I'm pretty sure any additional logic or fast would be wasted on you. There's a rule about arguing on the internet, and believe me, I'm not retarded.
Re:The other side..... (Score:4, Interesting)
Well, remember that his books also state that the ruling class is not the right way to go. The robot series ends with Robots and Empire, which states that humanity living without robots is healthier (this is where the Zeroth law comes in, which you obliquely refer to in your last paragraph). The Foundation series ends with Foundation's Edge and Foundation and Earth where the true solution is Galaxia, without the overlords of the First or Second Foundations (a "living death", in the words of Gaia). There is also reference to The End of Eternity, where the overlords of Eternity are brought to an end, since they do more harm than good, preventing humanity from reaching its full potential.
In sum, I would say you overgeneralized.
Re:The other side..... (Score:4, Interesting)
This seems to be a careful attempt to read his books without studying both sides of the issues he presents.
Asimov posits both positive and negative issues resulting from the robot based society he has created - and you obviously went to a great deal of effort to ignore half his writing if you only saw him speaking of some wonderful liberal society rising from it.
Anyone that reads it otherwise, has a fairly obvious axe to grind.
Pug
Re:Agenda: It's everywhere! (Score:5, Interesting)
"The other option is that the nobel committee has a clear bias towards what Americans view as the left,"
No.
The Nobel Prizes are Scandinavian institutions. To Scandinavians, what Americans think is "left" looks like extreme far right wing kookery, and what Americans think is "right" is simply beyond the pale.
Americans have no business talking about the left and the right in terms of their own politics which is extremely right wing, extremely religious and extremely authoritarian compared to the rest of the world's democracies. You guys need to realize that it's you that are out of step and it is your politics that is weird and kooky.
How's that then. You've made the Canadians look normal!! Hang your heads in shame.
Re:Fixing Republican Depressions, yet again. (Score:2, Interesting)
The "Long Depression" was from 1873 to 1896 [wikipedia.org], starting with the collapse of the Vienna Stock Exchange in Europe, and the debts from the Civil War plus the Credit Mobilier scandal in the U.S., and possibly rooted in socioeconomic and political changes wrought by the "Second" Industrial revolution. It demonstrates that there exists a deeper, more fundamental sort of downturn than the sort of readjustment that lasts for a year or two.
If we date the "Great Depression" from October 1929, then by the time FDR started his first term in March of 1933 , we already had a depression that had gone on for almost three and a half years, which would suggest that it was more than a simple business cycle re-adjustment. You can't blame FDR for that.
Re:Deserved (Score:4, Interesting)
Especially interesting is that the work Krugman won his prize for is about global free trade. Like most economists who've seriously studied the issue, Krugman has concluded that free trade is unabashedly a good thing.
But in the current U.S. political climate, free trade is mostly being touted by conservatives and reviled by liberals. So if you're a conservative and you want to claim liberal bias, you have to account for the fact that Krugman got the prize for work you probably agree with. And if you're a protectionist liberal who wants to boast, you're similarly stuck.
And if you're just generally tired of ideologues crowing about victory or whining about bias when neither is deserved, you can enjoy the whole spectacle of people getting tongue tied when someone wins the Nobel prize on (gasp) the strength of his ideas.
We can tell if it worked. IT did. (Score:3, Interesting)
And for the record, we cannot judge if Reagnomics worked because Reagonomics is:
The point of Reagonomics was to increase the amount of goods that people have and can choose to have. The idea was to stimulate production by encouraging investment. To some extent, Reaganomics is the Karl Marx critique of capitalism applied full tilt - overproduction, based on the observation that, if you produce a ton of stuff, competition emerges and prices fall.
Investors can get really rich, but a lot take a beating, thus wealth tends to concentrate. But remember, the name of the game is to get the rich to overproduce. They do, because, they are greedy and want more, and so they invest, and boom. We get the jobs and the benefit of overproduction.
So yeah, in Reaganomics, you get concentrations of wealth but you also get rich people losing everything. You get a very dynamic society where if you get lucky you can get rich very quick or get poor very quick, and, everyone gets tons of stuff.
To map this out to specific policies, these things are the things Reagan does....
--lower the cost of capital
first off, allow private capital formation.. then, lower tax rates, lower capital gains in particular, lower interest rates.
--allow it to move freely
adopt free trade.
For the most part, we've been on that plan since 1980s.
This has completely worked, and I think its a good deal. We've had a lot of gyrations, dislocations, but as a whole, the world is much, much, richer than it was 40 years ago. Just take a look at what's going in China and India and Eastern Europe...or even Europe once they lowered the corp income tax. In the USA people have way more food and way more stuff than they have ever had before. The world is just richer, and despite a hugely expanded population, everyone has more stuff. That's a huge success.
I think its worth it overall, but a lot of people in this election are fed up with constant social tension all the continuous upheavals cause. , and thus they are willing to sacrifice wealth and opportunity for some sort of stability. And, part of that too is because of an aging society and a more womanly male population. There's just less men willing to take risks and most young guys think like women these days.
Re:The other side..... (Score:3, Interesting)
Re:The other side..... (Score:2, Interesting)
> You don't trust wiki or the articles it cites but you DO trust a guy who has devoted his life...
Nope, Wikipedia is broken by design. But it probably has enough right in this case to say Luskin proabably has more of a life than just his running feud with Krugman.
> You're right, the current economic crisis clearly proves that bankers, presidents with MBAs, and
> other people who have actually done "things" know economics much better than nobel laureates.
Yup. The current crisis is a result of marxism, not a failure of capitalism. The "President with an MBA" warned of the danger Freddie and Fannie posed to our economy repeatedly and loudly. Hell, even the 'ol Arkansas Horndog tried to reign em in. The normally Democrat loving McCainiac signed onto an effort to stop the ACORN inspired madness going on. Freddie and Fannie are government creatures having nothing at all to do with a free market economy. And since this bailout didn't disolve Freddie and Fannie we will be repeating this crisis in a decade.
> Also, "marxist" as an insult? Really? Get with the times, the cold war is over.
No it isn't over. Reagan defeated the Soviet Union but he didn't get a chance to finish the War. The War isn't over until we face up to and defeat the 5th column still working it's way through American Society spreading rot and ruin behind it. ACORN, most of academia, most of the higher echlons of the Democrat Party most certainly including (just listing the ones most responsible for this crisis as examples) but not limited to: Barack Obama, Charlie Rangel[sp], Barney Frank, Chris Dodd. All these people knew they were creating a disaster and didn't care.
Try this if you really want to be scared:
Barack Obama and the Strategy of Manufactured Crisis [americanthinker.com]
> "These are the same forward thinking people who awarded Al Gore a prize for his
> important work raising awareness of the dangers of global warming."
He made a documentary. And a bad one full of factual errors at that. For that he gets a Nobel Peace Prize? President Reagan defeated the Soviet Union with but a word, freeing millions from slavery and tyranny without a single shot fired. Al Gore => Ronald Reagan? On Peace? We obviously aren't on the same planet.
Re:The other side..... (Score:3, Interesting)
> but I'm doubtfull that Fannie Mae is an example of marxism.
But it is. Most people knew nothing about Freddie and Fannie until a few weeks ago. They are old New Deal relics that won't die. They were created to help the 'poor' get a home loan. Right before they blew up they were involved with almost half of home loans. Now either that is a hell of a mission creep or half of America is in poverty. What they were doing is buying up paper from banks and packaging them as 'mortgage backed securities' and reselling them. The magic they were performing was due to their being government enterprises, thus the securities were government backed and nobody bothered to look at the underlying assets since Uncle Sugar was supposed to cover the bet.
I won't repeat all of what others have said better in other places but basically Freddie and Fannie distorted the entire market with their antics. Because they accounted for so much of the market their rules came to dominate even transactions that didn't eventually get sold to them. And increasingly Freddie, Fannie and the Democrats in Congress[1] were pushing the notion to give anybody who wanted one a home loan, after all Freddie and Fannie would buy the loan from ya, sprinkle some taxpayer insurance on it and resell it as a Mortgage Backed Security and everybody wins. Right up until everybody lost when Freddie and Fannie went under and people quickly realized even Uncle Sugar couldn't possibly cover all the bets.
> Even if it is, it's my understanding that it was private banks which gleefully picked up
> the home loans, for some reason assuming it was a good investment. Correct me if I'm wrong,
> but isn't the lesson here, if anything, that private enterprise and government enterprises
> don't always interface well?
Remember the part about the securities being government backed? They were supposed to be as safe an investment as treasury bills so of course everybody was happy to buy them. But I couldn't say it better when you note government enterprises and private enterprise don't work well. They don't and that is what conservatives have been saying since the New Deal. The solution here is obvious but politically impossible; wind down Freddie and Fannie. Yes this will mean people who used to get NINJA loans will remain renters, this is life. If we leave em around this situation will recur in 10-20 years as Democrats decide votors have forgotten this time.
> It seems unjustified to me to say it was the government half of the equation that was the
> entire problem, not at all greed and carelessness on the other side.
Granted that individuals should have either known or consulted someone with a clue before signing a balloon mortgage, bankers should have had sense enough to know this scam would eventually burst and raised holy hell... assuming any MSM outlet would give them airtime even if they bought it.... But the root cause was Freddie and Fannie encouraging banks to give loans to anyone regardless of creditworthiness and to then sell them the paper.
> I also don't know much about the previous depression, but I was under the (quite possibly mistaken)
> impression it was because of a lack of government controls.
Yes there was some pretty obvious problems in regulation. A Free Market does need regulation to ensure transparency and protect investors against fraud. Even Libertarians are generally in favor of the Government maintaining the Rule of Law. But it was FDR's New Deal experimentation that made the Depression Great. Go look at the historical record. The Depression threw the whole world into a major slump but while everyone else recovered it took a World War to finally snap the US out of it.
> Anyway, for most of us, "marxist" is not an insult
Because you live in academia where the reality of marxism is carefully suppressed. Marx's ideas have lead to prison states and mass graves each and every time they have been allowed to be fully implemented. Zero ex
Re:We really should have listened to him 3 years a (Score:4, Interesting)
The most interesting paragraph from the Krugman article is this one: