Bashing Paul Krugman

I’ve been having difficulty coming up with an idea for a post but one can always fall back to bashing Paul Krugman.  While it’s fair game to disagree with someone I prefer not to put him down. I can’t resist this one.  The guy generates so many words he must have a DBS degree.  (The D stands for doctor.)

There are four areas of disagreement.

First, the stimulus and money creation policies he promotes  were what was needed in the 1930s but are probably not right for current circumstances.  Both of these have been tried and appear not to be working.

Second, if the underlying problem is with the resource base, then increasing economic activity is going to make things worse and possibly bring forward the date of a major economic collapse.

My third concern is that even if we have the resources to prepare for an alien invasion, is that really what we want to do with our time and resources. There are so many things to do in arts, music, crafts and social fields that some of us would find more rewarding.  Also I think each individual  should decide for him/herself what to do rather than have to do what some economist decrees.

A fourth concern is that inflation which he also promotes is a form of theft.

On the other hand Krugman does have some uses.  He gives us something to think about and he has helped me come up with a post for this weblog.

 

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Creating money (quantitative easing) to solve the 1930s problem

It appears that some policy makers are determined to relive the 1930s but this time to get it right.

In the early 1930s the U.S. fed was restricting the amount of money in the economy.  In hindsight we can see that this was the wrong policy.  What was needed was to expand the money supply so people could get on with using the resources which at that time were so abundant. Once more money was created the people went on to fight a major war and then followed up with an unprecedented period of prosperity.

With this in mind central bankers today are trying to create more money with quantitative easing and we are hearing calls to prepare for an alien invasion.

But circumstances are different this time.  We have used up the most easily available of our energy and mineral resources.  Those that are left require a lot of work to extract and this is probably behind our current economic problems.

Rather than trying to create more money and return to economic growth we should be trying to rearrange our economy so that we can cope with negative growth with a minimum of human suffering.

 

 

Paul Krugman’s wish for an alien invasion

Paul Krugman is so frustrated by the lack of support for another round of stimulus spending that he’s now calling for a fake alien invasion of the United States to spur a World War II-style defense buildup.

The above quote is from a Huffington Post news item.

I can see his point but the more I think about it, the less I like it.

The Second World War was  65 years ago.  Since then the people on this planet have used up a lot of resources.  If it is true that current economic problems are caused by declining resources this kind of stimulus spending would bring closer the date of a major human catastrophe – unless we can discover some new easily accessible resources.

If the resources are available we probably won’t need to a fake alien invasion.  There are enough human warriors around to get the real thing going but good.

Aren’t there nicer ways to do stimulus. With all those new weapons around, somebody would find an excuse to try them.  Then we would all be losers.

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