American Madness

Intelligent Criticism in the Service of a Better Nation

Krugman takedown of the day

Posted by Josh Friedlander | 3 Comments

“Krugman is playing the standard disingenuous game of pretending that rising prices are inflation, rather than the result of inflation. The Fed has been expanding the money supply like crazy for decades by holding interest rates down, and faced with the latest bursting bubble, they decided to inflate some more, just as they did in the dot com crisis and the latin american debt crisis.

“Krugman is no economist; an economist is in the business of examining why people do what they do in the market. Krugman, like Keynes before him, is in the business of inventing absurd rationalizations for power-grabbing and deceit.”
Some Guy, California in response to The Big Inflation Scare.


3 Responses to “Krugman takedown of the day”

  1. Eric
    May 30th, 2009 @

    Krugman’s blog on NYT is titled “The Conscience of a Liberal.”

    By extension of this comment, one could then say the conscience of a liberal is to invent absurd rationalizations for power-grabbing and deceit.

  2. michelle
    May 31st, 2009 @

    So its Krugman–not Bush, Cheney, Dick Fuld, and the others on Wall St. and Washington who got us into the mess we’re now into–who are into grabbing power? come on, guys. get a grip. He’s not in the Obama administration – and he’s giving them grief all the time.

    By the way, here’s how the Fed works. When prices go up, it clamps down on the money supply through the tools it has. When they go down (housing, stocks, etc.) it opens the spigots. It is reactive, but in being so, it can certainly create bubbles.

    Most of them are in the brains of American people.

  3. Eric
    May 31st, 2009 @

    Michelle, you are correct. Krugman has been critical of the Obama administration. When the stiumulus bill passed, Krugman was critical that it was not enough.

    Krugman’s central thread through his blog and op-ed submission is that government is the solution. But if this the central thesis you build your argument on, it leaves no room for the impact the market will have to react to government policy. That’s the argument against his latest article. As an economist, Krugman should better explain the root cause of inflation (increase in the money supply) not the traits of inflation (rising prices). Rather he starts out by saying there is no inflation because prices and wages are low, but ignores the fact that the US peso is about to be wacked with a serious round of inflation when all that money the Treasury department pours into the economy starts a’ flowin’. With pressure on banks to make mortgages, government money pouring into “shovel ready” local projects, and now the government about to be used sales carmen-in-chief, inflation is coming. Big time.

    Arguing that ramped up government speding will not cause inflationary is wrongheaded, just as saying deficits don’t matter is wrong headed, which was the conservative mantra for most of the 80s. As an economist, a NOBLE PRIZE WINNING ECONOMIST (Josh, can we make this text flash?), Krugman should know better.

    PS – you need to put down the Bush/Cheney pitchfork. That ship has sailed.

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