The Unbearable Slowness of Understanding

[n2doc]

OK, I’m about to be unfair. But this article about how the Fed is gradually coming to realize that low inflation and a liquidity trap might be a problem fills me with despair.

I mean, we’ve been there for two years:

It was obvious to me, soon after Lehman fell, that this was the big one — that we were well on our way to a lost decade unless decisive action was taken quickly. Yet we’ve spent most of the last two years worried about the wrong things — inflation, crowding out, invisible bond vigilantes.

Even now, we get things like this:

Many economists remain confident that the United States will avoid the stagnation of Japan, largely because of the greater responsiveness of the American political system and Americans’ greater tolerance for capitalism’s creative destruction. Japanese leaders at first denied the severity of their nation’s problems and then spent heavily on job-creating public works projects that only postponed painful but necessary structural changes, economists say.
There are multiple things wrong with that paragraph — but what on earth would give one reason to consider our political system “responsive”? The truth is that we’re responding worse than Japan did.

And yes, I’m depressed about it.

http://krugman.blogs.nytimes.com/2010/10/18/the-unbearable-slowness-of-understanding/

[bemildred]

1. The well-off are still doing fine. Quite well actually.

And they are really not all that bright. All the rest follows.

[jaxx]

2. If he has all the answers why doesn't he run for president?

Krugman seems to sit back and criticize endlessly. Of course, he knows it all with his daily briefings.

[HereSince1628]

3. Answers aren't what lead a person to be elected.

Ambition to be president, desire to be president, whatever you want to call it, are probably much more important.

And those things will in turn lead to the pathways of political connectivity, campaign funds, etc that lead to the Presidency.Krugman doesn't seem to have a desire to do that.

Krugman does seem to have a desire, as the word Professor implies, to profess to people his insights into economic reality as seen from his erudite, if personal, perspective.

[jaxx]

5. It is safer to be a backseat driver, no doubt.

[HereSince1628]

8. I think it's simply a matter of Krugman being Krugman

Krugman is an intellectual. I doubt he wants to be driving in any manner. He seems to want to spend time watching the economic scenery and talking about the trip the bus is taking as seen from his seat.

[jaxx]

11. Sorta like slam em today and whine tomorrow.

That's Krugman to me. Inconsistent.

[HereSince1628]

16. We seem to be talking past each other

I'll see ya on another post sometime.


;-)

[TBF]

6. Under the bus goes Krugman ...

he's not perfect but at least he's willing to talk about the economy and he occasionally gets some of it right.

[TheKentuckian]

12. How about responsible leaders pay attention to those that prove correct even without the benefit of

daily briefings.

Politicians are fundraisers not academics. Being around the scene for a long time or having made a ton of money are looked for when recruiting potential candidates than insight and wisdom.

A marketable character almost always trumps the content of a person's person. Connections much more critical than an ability to connect the dots and see how the pieces fit and work together.

Your "point" registers as nothing but an evasion.

[jaxx]

14. Has he proved correct, or is he writing hind sight?

My point is mine.

[HereSince1628]

17. He's never right, that's how he won a Nobel in economics.

How did the Nobel committee miss that?

[TheKentuckian]

19. Yes, proven correct and commenting on events while the folks proven wrong continue to shape policy

and not just Krugman.

Economically, those responsible for the mess have influence and catbird seats and those who called for different policy and focus are on the outside looking in.

I don't think of Krugman as some prophet or anything but he has been far closer to correct than Summers, Bernake, and Timmeh every step of the way.

We are still stuck in a pro-corporate, pro-globalization, supply side mentality. Krugman might be a pro-globalization, fairly pro-corporate, demand sider but partially right kills all but totally wrong.

All kinds of folks have been critical of policy on the front end and if some people had listened instead of blindly labeling criticism equals Republican and similar logic traps they might avoid arguments that seem like thin skinned and petty nonsense.

[n2doc]

13. So far as I know, no one in the Administration has asked him to join them

There can be only one president. But He or She needs advisors. And whom has Obama chosen to listen to?

I'll take Krugman's advice over Summers' any day of the week and twice on sunday.

[ljm2002]

15. Of course! Anyone who voices their opinions...

...ought to just STFU unless (a) you agree with them or (b) they are running for President.

What could possibly be wrong with such a position?

[Jim__]

4. The Fed is run by bankers, and bankers hate inflation.

They lose money when loans are repaid with inflated dollars; so, inflation tends to be one of their biggest concerns.

Mark Twain said something to the effect that, "You'd be amazed at how difficult it is to get a man to understand something when making his living depends on his not understanding it."

[Jackpine Radical]

7. I think that was Sinclair Lewis, not Twain.

Other than that, you are right on the money (if you'll pardon the expression).

[lostnfound]

9. Very responsive to capital. nt

[Romulox]

10. How can you even talk about "markets" when the taxpayers cover all losses?

That's not a "market", that's a Ponzi scheme, at best. Face it Krugman, we are at the end-stage of Capitalism, which is virtually identical to Feudalism.

[xchrom]

18. Recommend