"Republicans are pronouncing Obama’s stimulus a failure: “Today’s announcement is an acknowledgement that the Democrats’ trillion-dollar stimulus is not working, and the American people know it,” House Minority Leader John Boehner said in a statement. “When they passed this spending plan, Democrats said it would immediately create jobs, yet nearly four months later unemployment has continued to climb and none of their rosy predictions have come true.”" - Steven Perez from Bookmarklet

*LOL* So quick to judge and so quick to forget! - Rene, Pro Button Pusher

Unemployment is a lagging indicator, but Reaganomics did not appear to slow its rate of growth or reduce absolute numbers. Recovery had other sources. Whereas the rate of unemployment growth has already slowed in response to the Obama stimulus. - George Frink

Why would anyone listen to an economist who didn't see the recession/depression/credit crunch coming ? Wake up America ! - Adrian

If you're referring to Krugman, you couldn't be more wrong. He'd been talking about the recession long before most everyone else would even talk about seeing it coming. - Steven Perez from IM

@Steven Perez what are you taking about ? He was a massive cheerleader for ultra low interest rates and still is ! Americans have to learn that the Dollar as THE world reserve currency backed by oil is the goose that lays the golden eggs. Kill the Dollar and America will not hold together. America works because in return for getting the dollar states like Texas and California subsidise states like North Dakota via federal money. - Adrian

Really? http://www.thenation.com/doc... - Steven Perez from IM

Quote from the article: " The Return was, as things turned out, the last book Krugman published before breaking onto the New York Times op-ed page, from which he has persisted in calls for predictability, simplicity and safety for salaried citizens who have better things to do than maximize their utilities all day long. Krugman championed single-payer healthcare; he hammered away at Dick Armey's tax cuts and Karl Rove's winning creepiness; after the 2004 elections, he almost single-handedly shamed wavering Republican moderates into abandoning their president's proposal to let Aunt Sheila risk chunks of her Social Security on the stock market. Since 2006 he has become a kind of John the Baptist of our Keynesian resurrection, warning as early as a year ago that an Argentine-style crisis was looming because global investors would eventually learn that Americans, too, were unfit to soak up much of their surplus savings, that US financial markets were "characterized less by sophistication than by sophistry." Now he has reissued The Return, which he has shrewdly subtitled and hastily updated--in part, I suppose, to say, "I told you so" (and to make a buck from a different kind of derivative), but mainly to reiterate what he has argued all along: that any financial institution we dare not let fail we also dare not leave unregulated; that a commonwealth must use its powers to spend and invest and especially to promote growth when more or less free markets more or less inevitably let us down. " - Steven Perez from IM

He didn't tell anyone anything ! The Dot Com bubble WAS NOT CAPITALISM. The bailout of LTCM WAS NOT CAPITALISM. Capitalism does not need regulation. All regulation does is create a false sense that risks are lower than they really are. Just ask yourself. America has the most bank regulators in the world. Every bank is full of on site regulators ! Guess what, no banks compete with each other based on, 'we have a high tier 1 ratio, your money is safe'. - Adrian

Are you trying to change the subject from why Krugman's statements are germane to why regulation "doesn't work"? Cuz those are two different subjects. - Steven Perez from IM

'Paul Krugman likes capitalism's innovations but not its crises and thinks that government has a duty to facilitate the former and protect us from the latter'. I assume that Krugman thinks that the government can protect people from crises via low interest rates, high spending and lots of regulation ??? Or am I wrong ? What else can a government do ? - Adrian

The solution is saving and the only way America will save is if there is a real rate of interest. Every dollar saved is NOT WASTED as Krugman believes but is a dollar that banks can lend to businesses for investment. - Adrian

If you believed in Krugmanomics Japan should be the most impoverished country in the world ! Even though it could clear all it's bad debts during a long deflation and zero interest rates. Maybe Japan is magic ? The answer of course is that deflation made money valuable and rare and so people saved. No one could say Dollars are valuable or rare and the rate they are being printed. Wake up you are in a crack-up boom and Krugman is not John the Baptist he is Judas ! - Adrian

And yet, Adrian, he saw the crash coming. Just like Nassim Taleb. Just like Nouriel Roubini. - Steven Perez

think about it. what is K-man saying w/ this post? is he saying that there was a direct correlation between the Reagan tax cuts and unemployment? or is he saying that there are lies, damned lies, and statistics? - MikeAmundsen

What good is seeing a crash coming if you offer no solution because you offer no alternatives. Except maybe World War 3 ? WW2 solved the depression right ??? - Adrian

Right. Because what good are warnings? [/sarcasm] Are you serious? It's not the fault of those doing the warning that their warnings went unheeded. It's the fault of those in power for failing to make the changes necessary to avoid the oncoming disaster. - Steven Perez from IM

The thing that really turned me against Krugman is that he is often having a dig against the Chicago school for 'not believing that unemployment exists' and he does this to a general audience who he knows do not understand academic economic theories. I assume he does it to make himself seem like some kind of wise old man ? - Adrian

You make a lot of assumptions about Krugman. - Steven Perez from IM

What changes ??? Tell me what changes ??? He does NOT WANT CHANGE !!! - Adrian

Whom are you talking about now, Adrian? - Steven Perez

And while we're on this subject, Adrian, I want to see some links to back up your statements, please. - Steven Perez

Because here's the thing, Adrian: Krugman sees the GOP leadership running their mouths about Obama again. He pants them using the one thing they love to hang their hat on - the Reagan tax cut. Now you show up with a lot of heat about Krugman doesn't know what he's talking about. So, I want to know where you're getting this from. Either you have facts to back up what you're saying, or this reaction of yours is a personal dislike for Krugman. Which is it, sir? - Steven Perez

Oh, and one other thing: stop shouting. I'm not across the street. - Steven Perez

Steven is the rock against which angry waves spend themselves. - Todd Hoff

So, when the Stimulus does nothing but devalue the dollar and bloat Govenment; will you call me a visionary? - Robert Hafer

I'll even set up a shrine for you. It will be a very small shrine, since no one will have any money, but it will be a shrine nontheless. - Steven Perez from IM

And since the recession started on Bush's watch, we''l name it the Bush Shrine for Polemic Prognosticators. - Steven Perez from IM

In 5 or 10 years time when inflation is out of control Americans will be desperate and they will not be calling Krugman John the Baptist. You can't stop inflation by complaining about Bush or Reagan. All you can do is raise interest rates high, like 20% ! Krugman will not tell you this ! - Adrian

And yet, still no citations. - Steven Perez from IM

tell me what you want ? I can give you hundreds of links that offer real solutions to America's problems ? - Adrian

http://fee.org/ - Adrian

http://www.lewrockwell.com/ - Adrian

http://mises.org/ - Adrian

LOL! +1 to Todd Hoff - MikeAmundsen

Try to stay focused, Adrian. Specifics examples on how Krugman is wrong, and try to keep it germane to the original conversation pertaining to the article, if you can. - Steven Perez from IM

Notice how India's banks didn't get sucked into this mess. Why? Because they are well regulated. Greenspan also wasn't a fan of regulation . . . until a few months ago when he realized that his "hey, the banks can police themselves when it comes to derivatives" argument was a complete pile of crap. Policemen DO serve a purpose in this world. - Peter Ghosh

Ok Krugman and all Keynesian believe in axiomatic truths e.g. unemployment exists or bleeding people cures illness. This is not science. There is no such thing as an axiomatic truth in science that can not be tested because it is the bed rock of your thought process and thus a negative test result would indicate not that your 'truth' was wrong but rather that the test is invalid. Economics is a science, if it is not then it is no better than western medicine was for the 1000 years before the mid 19th century. - Adrian

@Adrian: i find the deductive model of the Austrian school lacking quite a bit. I understand about the notion of truth, data, and human nature. However, most of what I've seen from the Austrian POV take the position that, when dealing with the topic of economics, inductive reasoning is always bad. I just don't see that this is the case. I can see how *conclusions* drawn from inductive reasoning can be faulty, but is not an outcome reserved for those prone to using the scientific method when dealing with economics or human behavior. - MikeAmundsen

Keysians have been given full control of economies in the past and it has ended very badly e.g. tanzania in 60s. It didn't work in the UK or US in the 70s and extreme monetarism was needed to cure inflation. Why not refuse to start the inflation in the first place ? Japan does seem to limp along some how with out it ! Deflation creates innovation and that is where wealth comes from, not the printing press: http://japanesestuff.net/toilets... - Adrian

deflation spaceship: http://www.space.com/images... - Adrian

deflation train: http://www.vagabondish.com/wp-cont... - Adrian

deflation robot: http://www.smh.com.au/ffximag... - Adrian

inflation person: http://itola.com/wp-cont... - Adrian

inflation car: http://chinatrade.foreignpolic... - Adrian

@Adrian: is that list of failures meant as a reply to my comment about the deductive model of the Austrian School? - MikeAmundsen

inflation versus deflation internet speed: http://graphics8.nytimes.com/images... - Adrian

But Japan IS a failure ! Paul Krugman told me so. It's an axiomatic truth. I've tested it ! - Adrian

The Japanese are starving to death while the American's are having an inflation party: http://www.vat19.com/blog... - Adrian

The foundation of economics must be praxiology. Either people are behaving in a good way or a bad way. People try to help themselves and their families. If they are making the wrong choices, e.g. not saving then some very large external agent must be at work. That external agent is Keynesian government. It's a great party till you have to pay your bill and the government's. Either you pay via higher taxes or higher inflation. If you pay with inflation you will get poorer. - Adrian

Inflation is the only way to get a homeless man to pay his fair share of the tax burden ! Why should Bill Gates have to carry the can all on his own ? - Adrian

@Adrian: i think we're talking across each other. the study of human conduct as a basis of economics has no bearing whether inductive or deductive methods are paramount. and this is the very point i put to you. isn't it true that the Austrian school claims inductive reasoning will always be faulty when applied to economics and/or human behavior? - MikeAmundsen

Adrian: so your problem with Krugman is that he subscribes to Keynesian theory? Because that still doesn't explain how the post he made is not factual. - Steven Perez from IM

Go Steven Perez!! I'm cheering you on :D Make sense, talk reality, post links, give'em hell Yay - comix aka martha

I think what Adrian is trying to say is that everything is much more complex than we think we know and that we should leave everything to his capable hands, because clearly he knows the true path out of this mess ... - Rene, Pro Button Pusher

stick a fork in this topic, Adrian has left the room. - Russellreno

In 2002 Krugman - aka John the Baptist didn't think the fed could engineer a housing bubble - To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble. Judging by Mr. Greenspan's remarkably cheerful recent testimony, he still thinks he can pull that off. But the Fed chairman's crystal ball has been cloudy lately; remember how he urged Congress to cut taxes to head off the risk of excessive budget surpluses? And a sober look at recent data is not encouraging. http://www.nytimes.com/2002... - Adrian