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Paul Krugman Weighs In

Monday, June 04, 2012

Paul Krugman, op-ed columnist for the New York Times and author most recently of End This Depression Now!, discusses his views of the economy and how to fix it--and the politics of getting it done.

→ Event: Paul Krugman at Union Square Barnes and Noble | Tonight at 7pm | More Info

Comments [55]

Calls'em from Bahrain

NABNYC - can you say, "coo-cco" while rubbing your belly with one hand and adjusting your tin-foil hat with the other; all while hopping on one foot? Because dude, you are way out of touch with reality.

Jun. 06 2012 03:46 AM

What happens to any entity that is bankrupt? Their assets are sold and the proceeds are used to pay their creditors, and those who have claims against them. The insiders are last in line, and generally should get nothing. That is what should have happened when Hank Paulson brought the note to Congress saying "Give us all the money or we'll blow the whole place up." Wall Street should be seen as the terrorist entity that it is.

In fact, Wall Street has done a much better job of destroying the U.S. and killing off its people (as well as destroying much of the world) than bin Laden and al Queda ever dreamed of doing. Wall Street is a predator entity committed to destroying our country by stripping it bare of its assets and its functioning government, leaving its people desperate and begging for food, shelter, work.

After seizing the assets of Wall Street and the Bank, the next thing the government should have done is to liquidate some of their assets, and take ownership of the balance of the entity in the name of the people of this country. You want us to clean up your gambling messes? Also, a claw-back, which is standard in bankruptcy, should have been used to take back from all workers everything in excess of a modest income paid to them during the past 10 years. They plundered their own companies so they would be unable to withstand the consequences of their own risky behavior.

Next: don't cut interest rates to nothing and make huge ongoing subsidies and loans to Wall Street and the banks, while working people are unable to get any interest on their own savings. Charge banks a reasonable interest rate, and set a national usury rate of 10% maximum to be charged on any loan or forbearance.

Finally, pass a full employment law. Anybody who is out of work will be employed the next day by the government at a living wage. We could have used the assets seized from the criminal cartel on Wall Street to fund this program. As more people are employed and spending money, saving, more jobs will be created. Set a goal of 0% unemployment, and halt all foreign labor visas and immigration until we get there.

That's what should have been done.

The question is this: if this is our government, they work for us, are beholden to us, legally obligated only to do what is in the best interest of the citizens, how would they have acted? Not like they did. What the government does is pretend that they work for the corporations and the rich, act in their best interest, and ignore the people of this country. I'd throw them all out of office if it was up to me. Start over.

Jun. 05 2012 12:44 PM
fuva from harlemworld

How could the fallout from the collapse have been better absorbed, specifically? I'd like a representative of the Republican party -- not you -- to publicly and clearly make this case. Of course, Bush and Paulson started the bailing out...And, "go out and get a better job"? The current level of income inequality is not a societal problem? Mitt Romney must state and clearly defend this position publicly too.

Jun. 04 2012 12:17 PM
jawbone

Calls'em, here's a video of Krugman on BBC's Nightline with two conservatives. Two, count'em, two! Good enough odds for you?

http://www.youtube.com/watch?v=_r-AKruzmkk&feature=player_embedded

Jun. 04 2012 12:04 PM
Calls'em from Bahrain

@ Fuva - (1) Mitt is far more of a capitalist than was President Bush, despite his MBA from Harvard. Yes, he went to Harvard, too. (2) Your premise is invalid. The spike in oil and even the collapse of two big investment banks could have been absorbed by our economy with far less damage than what TARP I did and the exacerbated problems that 0bama's sometimes deliberate, sometimes negligent mismanagement caused. Income inequality is your problem, not a societal one. Go out and get a better job. You'll be able to do so when 0bama is out of office. Though, if NYC elects one of these knucklehead Democrat leftists as Mayor, capital will flee NYC, again and so will jobs.

Jun. 04 2012 11:58 AM
fuva from harlemworld

But, CALL'S EM, what will MITT do differently from the prior Republican Administration under which the employment of these policies resulted in the biggest financial and economic crisis since 1929, and untenable levels of income inequality? And this is not even about whether what you advocate is right or wrong (though, I think you're mostly wrong). Again, the question is, what would Mitt do differently? And why shouldn't he have to state this explicitly?

Jun. 04 2012 11:43 AM
Calls'em from Bahrain

Brian - you used to have thoughtful debates or at least one expert after another to discuss important topics. Now 95 times out of 100 you have a liberal or leftist on the air and offer no contrast, context or balance to what that person spews out. Brian, if I were you I wouldn't have anyone on who won't debate someone from the other side and who won't take lots of calls from your very intelligent listeners.

The American economy can improve in mere months if we lowered corporate tax and brought capital into the country instead of watching it flee. We need to lower spending, which must and someday soon will include lowering the salaries, benefits and even pensions of government workers and ending the redundancies in the size of government work forces. We need to stop printing money, which has marginally helped our exports, but has killed our imports including the price of oil; which has driven up energy and food costs to unbearable levels. We need to exploit our natural resources in North America, resources that far out weigh those in the Arab dictatorship that hold us hostage and re need to reduce senseless over regulation. These are but a few of many things that can be to turn the economy around.

Boom - we will grow again and the unemployment rate will drop from 8.2% (probably 15-18% in reality) to 3-5% in one year. 0bama is one and done. His policies have wrecked this nation. He took a bad situation and made it far worse. PK is a fraud and a mere spokesman, propagandist and apologist for this failed regime, no matter how “fair & balanced” he professes to be. His award has about as much value as 0bama's "Peace Prize;" i.e., none at all except that both got a boat load of money for doing nothing.

Jun. 04 2012 11:32 AM

NEWS FLASH!

Ron Paul is a colossal MORON!

Jun. 04 2012 11:01 AM
Steve from Queens NY

Two things
Is the study of economics more a science or art?
I try to be as objective as possible when judging someone intellect and always wonder why does Mr. Krugman always seems to be smartest guy in the room. Keep up the good work even though it's landing on deaf ears on this daft American people.

Jun. 04 2012 10:50 AM
John from NYC

Reagarding the point from Robert from Brooklyn on some companies delaying hiring to prevent the President from positive news on employment, he brings up a point for another discussion some day. Not sure what guest can be called to speak to this possibility.

Jun. 04 2012 10:50 AM
ylime from Mott Have, Bronx, NY

Hearing Paul Krugman is like a balm applied to the weary soul. I wish his voice was acted upon by the powers that be. When I read PK's editorials and hear him, I feel the same kind of emotion that initially sprung up in me from the Occupy Wall Street movement: hope.

Jun. 04 2012 10:50 AM

hjs11211~

Don't hold your breath...

Jun. 04 2012 10:47 AM
fuva from harlemworld

Krugman's hesitancy to publicly debate someone from the Austrian School is well-founded. Economic discourse tends to quickly lose the lay audience, because most economists/ analysts/ etc. (unlike Krugman) speak in ways that obfuscate instead of elucidate. Sometimes I think this is intentional; they get over by confusing...Any debate would need to be well-planned and arranged, with some agreement in advance about use of language, terminology and responding to points made, etc. Otherwise, the wittier, faster talker could get over...Actually, all public discourse about economics and other complex topics could use this kind of order.

Jun. 04 2012 10:43 AM

JoeCorrao
tell us how then.

Jun. 04 2012 10:43 AM

Tiesha from Bronx~

Speaking of "crackpots"...

Jun. 04 2012 10:42 AM
Sheldon from Brooklyn

Tiesha, yes - you CANNOT spend you way to prosperity but you cannot cut spending (during a deep recession) to prosperity either.

Debt is not necessarily the worst thing in the world (for a large, dynamic economy like ours) - STRUCTURAL DEFICIT SPENDING IS, as even you have said "we've been spending beyond our means for DECADES." Why do you want to stop it NOW, during a recession?

I'm glad our debt is owned by the Chinese - that means they lose sleep at night, not us.

Jun. 04 2012 10:42 AM

PK is absolutelt wrong about how the great depression ended...he is wrong.

Jun. 04 2012 10:41 AM
Taher from Croton on Hudson

Not long ago I was at the Asia Society, which had a debate between the Keynesian followers and the Hayek types, the “Austrian” economist.
The “Austrians” came off like a bunch of idiots, divorced from reality and as shell for the 1%. They simple dodged everything and throw up non-sense. Many are regular guests on FOX PROPOGANDA NEWS.

Jun. 04 2012 10:41 AM
John from NYC

Does Professor Krugman have any response to the over-the-top article in last Sunday's NYPost? Not sure if this can be categorized as a book review or not

http://www.nypost.com/p/news/opinion/opedcolumnists/krug_attacks_cv5ld2kSZ5DFnNMQcxt8aJ

Jun. 04 2012 10:39 AM
joe

Dr Krugman, thank you for speaking truth to power.

Jun. 04 2012 10:38 AM
Janet Blaustein from NJ

Why isn't gov't going after fraud....from the IRS/Supposed Social Welfare organizations to the Justice Dept. failure to go after the really big bankers whose practices created huge mortgage problems? And politicians who refuse to make hard non-partisan economic decisions.....Is it that Everyone is scared to death of losing the admiration and support of Big Money? And has that exact one thing paralyzed our entire system???????

Jun. 04 2012 10:37 AM

Re: misesman
If the government is not a person, how can it be myopic? Also, that means corporations are not poeple either!

Jun. 04 2012 10:35 AM
Dorothy from Manhattan

Yeah, Brian. Let's put a couple of economists on CNN. EVERYBODY will watch it. Right? You sound very naive. It's more likely you just repeated something said by a producer, so that's the guy that ought to stand in the corner.

Jun. 04 2012 10:34 AM
Robert from Brooklyn from Brooklyn, NY

Has anyone considered whether business interests, generally opposed to Obama and pro-Republican, might delay hiring until after the elections for political reasons rather than pragmatic business deceisions, to help keep the President's "stats" looking bad?

Jun. 04 2012 10:33 AM

People go to the Von Mises site to read more about Austrian Economics.

Jun. 04 2012 10:32 AM
Sven from Poughkeepsie

I would like to hear Prof. Krugman address an earlier caller's claim that gas prices have risen in the last 10 years or so primarily due to policies that devalue the dollar (as opposed to, say, increased world demand). As one who finds this claim laughable, I am struck by the notion that this view may appear intuitive to folks who don't stay abreast of actual exchange rates, and may in turn cement opposition to federal deficits.

Jun. 04 2012 10:32 AM
Kim from Cobble Hill, Brooklyn

I'd like to know how Paul Krugman feels about Simpson-Bowles. I think President Obama will embrace it later in his campaign to send a positive sign to the market and stimulate optimism and support from the independents. Thanks. Kim

Jun. 04 2012 10:31 AM

There has been inflation Dr Krugman...debate Peter Schiff or Tom Woods. You are the dumbest smart guy going.

Jun. 04 2012 10:31 AM
Jeff Park Slope

I am not sure that we should be talking about what we need to do to create jobs. I think we should be talking about what we need to do to create wealth. To do otherwise is just to shift jobs from one area to another, that is why the Keynesian multiplier is about 1 or less than one. Bastiat wrote about this 200 years ago. You cannot "stimulate" the economy by breaking windows in order to create work for glaziers. This will just reduce spending in other areas. It doesn't create wealth. Government spending does little to create wealth, at least directly. It is a mirage. It is my understanding that even Keynes became convinced of the weakness of his theory eventually.

Jun. 04 2012 10:30 AM
President Bartlet from the white house

Mr. Krugman we need you!

Seriously why isn't Mr. Krugman in the administration?

Jun. 04 2012 10:29 AM
Len Maniace from Jackson Heights

Isn't cutting spending during a depression, a little like deciding you must immediately begin a water conservation program while half the city is burning down?

Plus, aren't recessions/depressions a good time to do infrastructure work? Wouldn't infrastructure projects be on sale now because we have all these idle contractors, workers, equipment companies, and suppliers of steel and concrete?

Jun. 04 2012 10:29 AM
Jay from NYC

Is the constriction of the economy a result of shrewd political maneuvering by Republicans to continue the recession/depression until they take control of the White House? Much of the debate and slow progress on everything from the Highway bill to not accepting stimulus funds seems foolish.

Jun. 04 2012 10:29 AM
jaawbone

I don't know where to direct this, but a woman just read an ad for an exhibit by Monet.

But she pronounced it Mon-ee, last syllable rhyming with "see."

I didn't realize what artist she was talking about until I, iirc, she said something about "Monee's garden." Then I glommed on to it being the famous Impressionist, Monet.

Please correct! This in WNYC, fer cyrin' out loud!

Jun. 04 2012 10:29 AM
Amy from Manhattan

One of the callers didn't seem to realize that the president can't set the Fed's policies. What can be done about the widespread perception that *everything* that happens in the country can be blamed on/credited to the president?

Jun. 04 2012 10:27 AM
Tiesha from Bronx

Sheldon, that should tell you something. You can't spend your way to prosperity. WHen we spend our way to 200% debt, all foreign based where does that leave us? We've been spending beyond our means for decades, we should be living in nirvana by now. We spend a trillion more per year tham we take in *we were complaining when that was 200billion not so long ago) plus we are printing money and pegging interest rates at basically zero. And guess what, we are seeing only 2% growth (and most of that is not real, i.e. inflation). Keynesian economics works only to a point, which we are far beyond. The long term damage from continuing down that road. could take decades to repair.

Jun. 04 2012 10:27 AM
The Truth from Becky

Brian, stop with the "trillion dollar deficit" comments, you didn't say a darn thing about it when bush was in office, don't continue to harp on it now...you are smart enough to know it is going to take more than 4 years to reverse the damage from the previous administration that all repubs seem to have amnesia about.

Jun. 04 2012 10:26 AM

I can tell you one reason Christie is an economic and educational phony: Because he has the power to get local BOE's to stop hiring and firing based on politics and he hasn't and he won't. If he really cared about education (and he only cares about charters and vouchers) he would.

Jun. 04 2012 10:26 AM
amalgam from NYC by day, NJ by night

@ Mr. von Mises -

Even though I think it was rather poorly planned and executed, the initial "Stimulus" was the only thing that saved the global economy from depression. The government is not a "Person" - just like corporations are not people - and "People" (viz. private individuals) make the VAST majority of all economic decisions, yet the "People" who comprise the govt. are sometimes the only entity _in the short term_ that can pick up the "production-consumption" when the capabilities of the private sector cannot or WILL not be met.

We can further argue whether there should be stimulus used now or not (I suspect I know your position), but to intimate that stimulus should never be used is a recipe for complete and longterm economic shutdown in times of crisis.

Plus, my Gov., Chris Christie has always been a phony when it comes to economics. He's a showman, pure and simple.

Jun. 04 2012 10:26 AM
Tom Thornton from Westchester, NY

Mr. Krugman, are some public employees overpaid? Why do we need to fund more municipalities where many public employees are making more than the average family income of the areas where they work? Why do we need to fund pensions that are far richer than anybody in the private sector can ever expect?

Jun. 04 2012 10:24 AM
Henry from Manhattan

Paul Krugman is talking about college graduates not getting decent jobs in the current markets, but wouldn’t conservatives just dismiss the insistence of a college-educated workforce. “No one ‘needs’ to go to collage” they would claim.

Wouldn’t conservative libertarians just talk about free markets, and if the economy needs Starbucks barristers more so that white collar workers, than so be it.

Jun. 04 2012 10:24 AM
Sheldon from Brooklyn

Tiesha - so what's your point? Is Japan, a country that has been in an economic malaise the last 15 years, your golden child because, according to you they supposedly finance their own debt?

Jun. 04 2012 10:23 AM
Melanie from Brooklyn

I find it interesting that Brian decides to throw hard questions only at some guests. Others like this one he lets simply spew talking points. Not really the best way to get a real discussion.

Jun. 04 2012 10:22 AM
Tim from Ridgewood

If government spending can help stimulate the economy and create jobs, what government spending plans do you believe will generate the greatest returns and create the most jobs for dollar invested?

Jun. 04 2012 10:20 AM
Kathryn Kirk from brooklyn, ny

What if wealthy political donors contributed money to job creation rather than to particular candidates. Would this, could this, influence employment figures?

Jun. 04 2012 10:20 AM
tiesha from Bronx

Japan's debt is self financed - ours is not. We either borrow from abroad or print money here. If rates even just go back to historical norms we are bankrupt as a nation. The interest payments will be larger than all social programs combined. BTW, have you ever known government to cut spending in good times? That is laughable.

Jun. 04 2012 10:16 AM
Amy from Manhattan

Finally someone in public life says it: the Republicans keep accusing Obama of not getting anything done, when they're the ones keeping him from getting anything done. Why aren't the Democrats pointing this out? And that so much of the stimulus consisted of tax cuts (which Romney will never mention, I'm sure)?

Jun. 04 2012 10:16 AM
Henry from Manhattan

All very good Paul Krugman.

But my father, who is a conservative living in Staten Island, would just say, “Obama is ruining the country with Keynesian economics that have been proven not to work.” Oh, and something about Socialism.

Half of the country thinks and votes like he does so I’m not sure where that gets us.

Jun. 04 2012 10:14 AM
Sheldon from Brooklyn

"austerity" will always be a failure in deep recessions. Republican quacks will never get that.

Jun. 04 2012 10:10 AM

Stimulus represents a misallocation of capital and a distortion of economic activity. The government is not a person. Only people make decisions about their buying and selling preferences. People drive economic activity because they are the ones with an interest in production and consumption. The government has a myopic view of how capital is best used for production.

Krugman continues to use aggregated data to define economic activity which is really human behavior.

Jun. 04 2012 10:09 AM
Tiesha from Bronx

ugh... not this crackpot again. we've heard it all before. no new ideas here.
same columns. same interviews, please. At some point you can run up debt until you cant. Rates are low until the moment they are not, as we've seen this change can happen in an instant... then you are left in ruins.

Jun. 04 2012 10:09 AM
cwebba1 from Astoria

On the Oct 20th Charlie Rose program, Ray Dalio said that we are in a period of world-wide economic retraction. He said that managing the retraction should be orderly and included new spending as part of the strategy to impose order to retraction. Ray Dalio specified that any new spending must have a pay-off. charlierose.com/view/interview/11957

Does Paul Krugman agree and what forms of new spending does he propose that would have a big pay-off in the longer term?

Jun. 04 2012 09:32 AM
Pete from Branford CT

I'd like to know what Dr. Krugman thinks of this idea from fairsharetaxes.org:

The favored tax treatment for investments and the wealth concentration that results leads to the demand for investments exceeding the supply of worthy investments ... Any attempt at regulation is overwhelmed by "supply and demand" market forces ... The price of investments MUST rise "artificially" and unsustainably, especially if working consumers are relatively overtaxed ... Investment bubble ... Burst bubble ... Recession ... Every 6-8 years all but the wealthiest are at risk of losing their jobs, their homes, their opportunity to educate their kids, and their retirement savings ... and the government loses more tax revenue.

Jun. 04 2012 09:24 AM
cwebba1 from Astoria

Assuming Paul Krugman's assessment of economic conditions are correct, what strategies does he propose to move the House of Representatives, the body that determines spending, into action?

Jun. 04 2012 09:24 AM

Mr. Krugman's reputation proceeds him:

" . . . Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults. . . ."
http://www.nytimes.com/2005/05/22/weekinreview/22okrent.html?_r=1&pagewanted=all

For something more substantive, you might want to try a little Hayek -
( Here's the punchline if you don't like the music:
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." )
http://www.youtube.com/watch?v=d0nERTFo-Sk

Krugman v. Paul
http://www.youtube.com/watch?feature=player_embedded&v=WEoGKpnutyA#!

Jun. 04 2012 09:21 AM
Martin Chuzzlewit from Manhattan

What are his latest thoughts about the survivability of the EU and the euro?

Jun. 04 2012 08:15 AM

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