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Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

14 Responses to “The Economic Argument Is Over — And Paul Krugman Won”

  1. Manofsteel11 says:

    Mr. Ritholtz, are you also of the opinion that the United States and our allies have prevailed?

    The gentlemen argue about the tragic sequester, the exact (theoretical) level of debt to GDP which leads to macro crisis and corruption, etc. but seem to miss the long-term perspective offered by Mr. Krugman – spend trillions and hope equality and productivity will follow rather than war and unprecedented systemic risk.
    Have we fixed the economy or is the economy dependent now on its fix?

  2. MayorQuimby says:

    When the Fed can safely sell its assets and stop QE, Keynsians can celebrate. Until then we are still in the uptrend of a leverage cycle and we could be far worse off than 2008 when it completes. No, I’m not betting on that happening but anyone who thinks our gvmt can simply send what it wants and print itself out of the mess ad infinitum is delusional.

  3. Bob is still unemployed   says:

    Mr. Krugman won because he dealt in facts and rational disucssion, and not in made up ideas, baseless assertions, and possibly intentionally misdirected spreadsheets.

  4. eliz says:

    Ugh. Neither austerity, nor unbridled government spending is the solution, at least given my priorities (which are NOT materialism, conspicuous consumption, a rising stock market (gambling), blowing asset bubbles, a phantom economy — but, rather, less stress and greater well-being (from which the word wealth derives)). I think the aim should be “the good life” for the 99%. Instead we have both Democrats and Republicans feeding at the troughs of the 1%.

    We need a balance – BOTH fiscal and social responsibility.

    * Government should be aimed toward being more efficient and effective – i.e. accountable > each and every agency, contractor and employee.
    * End subsidies and welfare for the rich and for big business, big pharma, big banks, big lenders.
    * Undo the policies that facilitate shipping of jobs and businesses overseas.
    * Have social programs to ensure people (not corporations) have basic needs: food, shelter, wellness care, transportation, education.

    Yes. A dream.

  5. Frilton Miedman says:

    MQ, Are you aware of the difference between Keynesian and Monetarist?

    Fed policy (Monetarist) is the main driver of market growth for lack of Fiscal, this has been Krugman’s critique for four years now.

    Keynesians have little to celebrate for the fact that so little has been done fiscally, consumers only have more buying power because of lower mortgage & debt payments.

    As for your mention of excess leverage & 2008, it was the securitization of fraudulently rated subprime/liar loans that caused the problem, banks shredding Dodd-Frank is what ensures a repeat.

    Oh, and the debunking of Reinhart/Rogoff is a big bonus for Keynesians, who may well find themselves celebrating at some future point….once Keynesianism is actually tried.

  6. romerjt says:

    “The Misconception: When your beliefs are challenged with facts, you alter your opinions and incorporate the new information into your thinking.

    The Truth: When your deepest convictions are challenged by contradictory evidence, your beliefs get stronger. (David McRaney the Blowback Effect)

    Paul Ryan and the Reps – Let the blowback begin

  7. wally says:

    “Until then we are still in the uptrend of a leverage cycle…”

    Unless the austerian Germans manage to drag the whole world back into recession, which they seem to be mightily attempting to do.

  8. san_fran_sam says:

    Krugman may have won the academic battle. but the Republicans have still won the political war. Congress and the masses have still made the choice of one between less austerity and more austerity.

    the difference will be that they will no longer refer to the R-R 90% threshhold. In fact, they will behave as if they had never heard of it or talked about.

    Congressman Jones:”That the Reinhart-Rogoff paper was wrong or not is irrelevant. This country can not live beyond its means…..”

  9. ConscienceofaConservative says:

    I think Greg Mankiw had a good comment to make on this whole incident. He points out that everyone makes mistakes, that policy should not and is not based on a single study, that the coding error has gotten more attention than it deserves with people on the other side piling on, and taking advantage to pound their views.

    I’m don’t believe that this discredits the notion that high debt levels hurt growth, but does bring into question the notion that 90% has special meaning with hell breaking loose if the 90% barrier is breached, and as Mankiw also noted the world is more continuous than that.

    I’m also reminded of the global warming debate. Some of the researcheers had studies that were discredited based on errors, ommissions etc, but those arguing for global warming still believe the idea valid, despite studies being challenged.

    • Biffah Bacon says:

      Two fundamental flaws here-first to assume that Mankiw isn’t part of the same policy push (Petersen Institute, Olin Scaife Bradley Koch Rockefeller Ford foundations, think tanks) that produced the fraudulent RR paper. Why not add old Holtz-Eakin in there? Plenty of people on that Petersen gravy train will try and sell the same policy products because it makes money for their bosses. Now is a good time to stop being a sucker and do the research.

      Next, there is no conflict about climate science. The climate is warming and it is too late to stop significant, costly and life threatening changes to the climate system. Scientists err on the side of caution and the evidence quickly seems to be leaning towards a more radical regime shift than less. There is a great deal of money in denial, far greater than any government grant agency can provide for climate science, and if there was even a question you could bet (and win) that people would be lining up for Koch Olin Bradley Scaife Ford Rockefeller etc. grants to work the angles. The program is the same one used for tobacco, lead in gas, gmo food and other profitable products that socialize their harms. There is simply no question anymore; the only question is what industries are going to have to change based on the actions we choose to take in response.

  10. DeDude says:

    “uptrend of a leverage cycle” ?????

    I believe that when you look at total debt (Private+Corporate+Government) we are currently in a downtrend from a very highly leveraged point. It may be that government is increasing debt, but that is simply a sign of deferred taxation – and a good choice to buffer the problems from excessive de-leveraging in the private sector. Whether the debt can/should be stored at the Fed to neutralize its effects on interest rates or allowed out in the private sector is not an issue of leverage. It is simply a determination by the Fed of where it want the rates to be – and it can/will continue that as long as it decide the economy is better served that way.

  11. mad97123 says:

    Time for Krugman to hang out his “Mission Accomplished” banner….