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| quote: | Originally posted by Capitalizt
This dumbass called for extremely low interest rates from the FED to spur the housing market even when prices had already risen tremendously to all time highs. What amazing foresight..Considering all of the awesome benefits that would be experienced a mere 7 years after following his advice (Short Sales, Foreclosures, unemployment, and bailouts of almost every government connected entity), yes..I think he does qualify as a dumbass.
P.S. If you want to come back with the "but he got a nobel prize" argument, bear in mind that the guy who developed the mathematical models for the derivatives/credit default swaps that compounded this mess also received one..and we know how well his ideas worked out. |
Haha... too bad Lebez isn't here to defend... he has a serious man crush on Krugman. Krugman's one of the most fundamentally dishonest economists I've ever seen. Look at these 2 examples from just yesterday on the same Op-ed! First example pointed out by Cornell Law professor William Jacobson. Second example explained by King Banaian.
Krugman's Op-ed on Republicans "punishing the jobless":
| quote: | | By the heartless, I mean Republicans who have made the cynical calculation that blocking anything President Obama tries to do — including, or perhaps especially, anything that might alleviate the nation’s economic pain — improves their chances in the midterm elections. |
As professor Jacobson explains, "The only problem is that Krugman ignores that Republicans were in favor of extending benefits by taking the money from elsewhere in the budget, including unused stimulus funds. It was the Democrats who balked at this solution, insisting on running up more debt. So the entire premise of Krugman calling Republicans heartless amounts to nothing more than a fiscal policy dispute. Why aren’t Democrats heartless for not going along with the Republican proposal?"
And then this: "Next, Krugman terms 'clueless' people like Sharron Angle who have mentioned that the welfare state, including unemployment benefits, can create a disincentive for people to take jobs they otherwise would not take. Krugman admits that this is a real phenomenon:
| quote: | | Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits aren’t quite as desperate as workers without benefits, and are likely to be slightly more choosy about accepting new jobs. The operative word here is “slightly”: recent economic research suggests that the effect of unemployment benefits on worker behavior is much weaker than was previously believed. Still, it’s a real effect when the economy is doing well. |
Jacobson: "Krugman says this phenomenon is irrelevant in a bad economy, but once again he ignores that Republicans were willing to extend benefits if the benefits were paid for in the budget, not paid for with more money borrowed from China. So who is the clueless one?
Last, Krugman views unemployment benefits as immediately stimulative in the economy, because the money will be spent. That’s a fair point, which is why it makes sense to use stimulus funds for this purpose, rather than propping up bloated state governments and union contracts. So Krugman’s point actually defeats his point."
http://legalinsurrection.blogspot.c...lueless-or.html
2 different quotes on the same subject
First, from his economic princples textbook: | quote: | | …public policy designd to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. Most economically advanced countries provide benefits to laid-off workers as a way to tide them over until they find a new job. In the United States, these benefits typically replace only a small fraction of worker’s income and expire after 26 weeks. In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits are widely believed to be one of the main causes of “Eurosclerosis,” the persistent high unemployment that affects a number of European economies. |
Again, from his op-ed yesterday:
| quote: | Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits aren’t quite as desperate as workers without benefits, and are likely to be slightly more choosy about accepting new jobs. The operative word here is “slightly”: recent economic research suggests that the effect of unemployment benefits on worker behavior is much weaker than was previously believed. Still, it’s a real effect when the economy is doing well.
But it’s an effect that is completely irrelevant to our current situation. When the economy is booming, and lack of sufficient willing workers is limiting growth, generous unemployment benefits may keep employment lower than it would have been otherwise. |
http://www.nytimes.com/2010/07/05/o...=rssnyt&emc=rss
It goes into detail about the paper Krugman cites, and that's too tedious to read... but basically his point is this: “Slightly” does not appear in the first quote. A hint to non-academic economic readers: When you see someone say “recent economic research says that …” you can bet they are trying to slide by what the bulk of research before that said. That is, they may be cherrypicking. So I do not understand why Krugman the textbook writer would argue unemployment benefits is a significant explanation for Eurosclerosis while Krugman the op-ed writer would encourage us to adopt those European policies. Nothing changed in the results. They applied for the U.S. in good times and bad (or, at least, they haven’t shown a significantly different result in periods of slack demand, contra Krugman’s assertion.) One of those passages is misleading the reader. Which is it?
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