Comments on: Krugman vs Summers: The debate http://blogs.reuters.com/felix-salmon/2011/11/15/krugman-vs-summers-the-debate/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: LEEDAP http://blogs.reuters.com/felix-salmon/2011/11/15/krugman-vs-summers-the-debate/comment-page-1/#comment-33217 Fri, 18 Nov 2011 09:38:10 +0000 http://blogs.reuters.com/felix-salmon/?p=11095#comment-33217 @spectre855, you hit the nail on the head. Corporate corruption and person-hood are ridiculous. And while Krugman’s prescription for our economy might work, it is locked in a debate that seems to go nowhere. The political theater isn’t ready for a change because it’s funded by the o.5%. Change may be coming though, with our own Arab Spring– the Occupy movement.

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By: Lulekuqe http://blogs.reuters.com/felix-salmon/2011/11/15/krugman-vs-summers-the-debate/comment-page-1/#comment-33159 Wed, 16 Nov 2011 20:51:15 +0000 http://blogs.reuters.com/felix-salmon/?p=11095#comment-33159 @SteveHamlin: The Oct 2011 Treasury OFS report on TARP shows the current outstanding balance still owed to the Treasury as $124 billion, with an estimated net cost of $37 billion.
Source: http://www.treasury.gov/initiatives/fina ncial-stability/briefing-room/news/Pages   /TARPAnniv.aspx

Incidentally, the TARP money invested in the banks made a handy profit

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By: XRayD http://blogs.reuters.com/felix-salmon/2011/11/15/krugman-vs-summers-the-debate/comment-page-1/#comment-33153 Wed, 16 Nov 2011 18:06:13 +0000 http://blogs.reuters.com/felix-salmon/?p=11095#comment-33153 Suppose we had 30 Country Wides, or AIGs, or GS?

Apple and Steve Jobs made their money by creating products sold at retail. Like Henry Ford and many others.

Not the billion dollar pieces of so-called “AAA” rated paper peddled by the former group!

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By: ostrom808 http://blogs.reuters.com/felix-salmon/2011/11/15/krugman-vs-summers-the-debate/comment-page-1/#comment-33149 Wed, 16 Nov 2011 15:34:28 +0000 http://blogs.reuters.com/felix-salmon/?p=11095#comment-33149 To call Krugman pessimistic is to fail to recognize his entire economic argument., which is, barring heavy injection of guvmint funds into the economy, we are doomed to static high-unemployment and a climate unsuited to both private and commercial recovery. He argues against the status quo of oligarchs criminally gaming the system with impunity.

Are these concepts so hard to grasp? This is as pessimistic as much as saying I am going to die.

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By: Laughingchimp http://blogs.reuters.com/felix-salmon/2011/11/15/krugman-vs-summers-the-debate/comment-page-1/#comment-33148 Wed, 16 Nov 2011 15:12:34 +0000 http://blogs.reuters.com/felix-salmon/?p=11095#comment-33148 Fundamentally Krugman disagreed with Summers on political process, not economics. It seems that Summers has recently moved very close to Krugman’s position on the economics. Summers has more political experience, but his optimism about the political process lacked any specifics about what would happen to trigger political action. The unemployed need higher inflation and more spending but it’s the bankers that own Washington. The bankers are doing just fine at the moment and there’s nothing to suggest that they won’t continue to be just fine in the face of massive unemployment for many more years to come.

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By: Finster http://blogs.reuters.com/felix-salmon/2011/11/15/krugman-vs-summers-the-debate/comment-page-1/#comment-33145 Wed, 16 Nov 2011 14:13:11 +0000 http://blogs.reuters.com/felix-salmon/?p=11095#comment-33145 Too much emphasis is on quantitative measures here. Monetary policy, fiscal policy.

Quality of developement matters. Through a mispricing of credit and risk the U.S. economy for more than a decade has taken on an unsustainable shape though massive malinvestment. This needs to be torn down and rebuilt company by company and job by job.
The result is the great recession and it mirrors the fake boom in size. Looking at potential GDP on a trajectory and measuring the output gap is futile, because it measures an economy that no longer exists and shouldn’t exist!

Schumpeter is on the bridge of this icebreaker and not Keynes and Canada has the better economy to boot to pass this ice age.

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By: Goldcap http://blogs.reuters.com/felix-salmon/2011/11/15/krugman-vs-summers-the-debate/comment-page-1/#comment-33144 Wed, 16 Nov 2011 13:55:26 +0000 http://blogs.reuters.com/felix-salmon/?p=11095#comment-33144 This article does read like an insiders guide to conventional opinions about economic discourse. I can’t say I’ve ever thought of Felix (who I’m sure isn’t reading these comments) Salmon as a particularily insightful analyst (see his almost useless “EU Situation” Youtube Video with the toys as an example, but as per many of the comments above, it seems to boil down to:

1) Krugman is right, but shrill, (and outside consensus!) so loses the debate
2) Summers is wrong, but convincing, so wins the debate
3) Keynesianism is “leftist”
4) Pessimism is bad, and anything that leads to pessimism can therefore be ignored.

It’s this sort of shallow facile discussion that makes me wonder why Salmon bothers to write an article at all. Maybe it was late, and he was just tired. Sad Salmon.

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By: maynardGkeynes http://blogs.reuters.com/felix-salmon/2011/11/15/krugman-vs-summers-the-debate/comment-page-1/#comment-33139 Wed, 16 Nov 2011 06:36:22 +0000 http://blogs.reuters.com/felix-salmon/?p=11095#comment-33139 I never thought we would reach this point, but Krugman now looks fatter than Larry.

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By: heyitsthatguy http://blogs.reuters.com/felix-salmon/2011/11/15/krugman-vs-summers-the-debate/comment-page-1/#comment-33138 Wed, 16 Nov 2011 05:04:46 +0000 http://blogs.reuters.com/felix-salmon/?p=11095#comment-33138 does felix read the comments? in any case, i don’t think i’ve ever read one of these threads that have ever gone so consistently against him. (and i agree)

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By: billyblog http://blogs.reuters.com/felix-salmon/2011/11/15/krugman-vs-summers-the-debate/comment-page-1/#comment-33136 Wed, 16 Nov 2011 04:16:50 +0000 http://blogs.reuters.com/felix-salmon/?p=11095#comment-33136 Amen Greycap at Nov 15, 8:03 AM. Felix really did misspeak on this one.

Krugman was very clear that he was pessimistic about the gridlocked politics or, more precisely, the scorched earth politics of the Republicans which has been overwhelmingly obstructionist about anything that might pass for rational and/or even moderate.

Summers had no specific rejoinder to this. Replay the debate. He simply offered generalized bromides about possibilities for change with nary a reference to what has been happening politically on the ground — and is likely to continue happening.

Thus, Bremmer at one point stated what is probably going to be the case when he said the Republicans will take the Senate, retain the house, and possibly gain the presidency. Krugman said “maybe not,” but you could tell he was expressing more hope than conviction.

So the questions to Summers should be:

1. Assume that in 2012 the Republicans take the Senate, retain the House, and Mitt Romney is our next President. Do you really believe that this political outcome has any reasonable probability of making economic matters better for the body politic as a whole, as distinguished from Bremmer’s 1%? You don’t really think that Greg Mankiw will have his way over the Tea Party crowd in Congress, do you?

2. Or, assume that Obama is reelected, the Republicans take the Senate (even with less than 60)and retain the House. Tell us concretely why this materially increases the probability for economic improvement for the 99%, as opposed to most of us languishing through 4 more years of Japan-style stagnation.

And, Larry, please uncross your fingers and answer these questions with a straight face.

So much for Summers being more attuned to “probability distributions” as Felix stated. For unless Felix had in mind pure Monte Carlo simulations — which are suspect even in anything other than purely theoretical economics, let alone politics — pretty much the opposite was the case: i.e., Krugman and Summers were basically in agreement — perhaps too optimistically — that if they could have their similar Keynesean ways with the economics, there was a reasonably high probability that things would work out.

But as to politics, yes, Krugman was pessimistic, but arguably realistic, i.e., the probabilities are overwhelmingly on his side. Summers, somewhat disingenuously, to put the matter charitably, completely ducked this aspect of the debate, and it is somewhere between puzzling and laughable that Felix seems, in however a garbled fashion, to have suggested otherwise.

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