Secondary Sources: Economic Fear, Challenging Krugman, Global Debt
A roundup of economic news from around the Web.
- Economic Fear: The latest Washington Post/ABC News poll shows fears about the economy and job losses remain widespread. “Painful personal experiences over the past year continue to dampen the outlook of many Americans. About two-thirds of those polled say they have been hurt financially by the recession, with extensive reports that job losses and pay reductions are hitting home. Most call the economic situation a source of stress in their lives, and that anxiety also stems from apprehension of what may lie ahead for their families. Nearly six in 10 Americans are now concerned about job or pay losses in the coming months, little changed since February, and there has been no increase in the percentage who see the federal government’s stimulus efforts as having an impact, even as the pace of layoffs has eased in recent months. And there is lukewarm public confidence that the government is enacting measures to stave off another financial crisis.”
- Challenging Krugman: The University of Chicago’s John Cochrane responds to Paul Krugman’s opus on economics. “Nobody ever asserted that an increase in government spending cannot, under any circumstances, increase employment. This is unsupportable by any serious review of professional writings, and Krugman knows it. (My own are perfectly clear on lots of possibilities for an answer that is not zero.) But thinking through this sort of thing and explaining it is much harder than just tarring your enemies with out-of-context quotes, ethical innuendo, or silly cartoons. In fact, I propose that Krugman himself doesnt really believe the Keynesian logic for that stimulus. I doubt he would follow that logic to its inevitable conclusions. Stimulus must have some other attraction to him. If you believe the Keynesian argument for stimulus, you should think Bernie Madoff is a hero. He took money from people who were saving it, and gave it to people who most assuredly were going to spend it. Each dollar so transferred, in Krugmans world, generates an additional dollar and a half of national income. The analogy is even closer. Madoff didnt just take money from his savers, he essentially borrowed it from them, giving them phony accounts with promises of great profits to come. This looks a lot like government debt. If you believe the Keynesian argument for stimulus, you dont care how the money is spent. All this puffery about infrastructure, monitoring, wise investment, jobs created and so on is pointless. Keynes thought the government should pay people to dig ditches and fill them up. If you believe in Keynesian stimulus, you dont even care if the government spending money is stolen. Actually, that would be better. Thieves have notoriously high propensities to consume.” Krugman responds.
- Global Debt Clock: The Economist has a really cool new feature that tracks public debt across the world.
Compiled by Phil Izzo
Tuesday, September 15, 2009 1:54:57 PM – Link
User Comments:
The effect that Achilles could never catch up with a tortoise that had the start of him in spite of the fact that he traveled ten times as fast as the tortoise. By the time Achilles had covered the distance that separates him from the tortoise, the tortoise had gone one tenth of that distance ahead of him; when Achilles has covered that tenth, the tortoise has covered a hundredth, and so on to infinity.
(Achilles is the stimulus, the tortoise – unemployment).
Is that the way to look at the problem?
Sincerely,
Pavel Shvaibovich.
Click here to unsubscribe from WSJ.com: Real Time Economics. Sent using Reblinks.