The Rockin Johnny B

Saturday, November 24, 2012

Paul Krugman, My Economist Hero

To those of you who don't know me and this is the first time you've ever read one of my blogs...hello.  To those of you who have not read a blog of mine and don't know anything about've dodged a bullet.  However, if you have read my posts and you like me STILL, I would like to introduce you to my Hero, Paul Krugman a Nobel Prize winning economist.

Basic Biography: 

Mr. Krugman received his B.A. from Yale University in 1974 and his Ph.D. from MIT in 1977. He has taught at Yale, MIT and Stanford. At MIT he became the Ford International Professor of Economics.

Mr. Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes. His professional reputation rests largely on work in international trade and finance; he is one of the founders of the "new trade theory," a major rethinking of the theory of international trade. In recognition of that work, in 1991 the American Economic Association awarded him its John Bates Clark medal, a prize given every two years to "that economist under forty who is adjudged to have made a significant contribution to economic knowledge." Mr. Krugman's current academic research is focused on economic and currency crises. 

I quote Paul on many of my posts and I have watched him be correct in his economic predictions time after time.  He predicted a Liberal win in the Obama v Romney election.  He said basically, when Paul Ryan was chosen as a VP, the election was lost by the Conservatives.  He has also predicted that the GOP will do one of two things in the future: 1.  Same old, same old which will cost them more losses in the future state legislatures and in the U.S. Congress and Senate, or 2. They will realign the entire GOP and move it more toward the center and moderation which the electorate demands.  Paul says that the biggest losing point in this election was the Right's non-understanding of simple math and the U.S. Census statistics.  They belittled over half of the voting non-whites in the country and over 3/4s of the women in the country and that was the final nail in the GOP's coffin.  Paul says they may not recover in this decade from those errors in judgement.

I'm a nerdy Statistic and Debate Man who took upper division stats in college and created a statistical survey instrument myself, I watch those idiots on Faux News abusing statistics so often I actually cringe every time I turn on their channel.  I've finally quit watching entirely to save my sanity.  They use the most stupid of statistical assumptions to prove their non-factual crap.  "Some people would say....,"  is Faux New's biggie to stun the poor guest and discount his actual and factual items.  "Well, Mr. So-and-so," The interviewer potificates,"  some people would say that what you just said is a pure hypothesis and has no basis in fact."  My God!  Who are those SOME PEOPLE and WHY DO THEY SAY THAT and WHERE ARE THEIR PROOFS?  The person being interviews just looks at the interviewer [Hannity, O'Reilly, etc.] in stunned silence because THERE IS NO ANSWER THEY CAN GIVE without looking like a fool too.  Paul Krugman says Fox News's idea of truth is couched in nonsense.

Let me give you an example of Krugman's common sense:

He is speaking of the present condition of the deficit.

Brad DeLong points us to Howard Davies, who accuses economists of being in denial, and of having had nothing useful to say in the crisis. The first part is definitely true for much of the profession; the second charge is just false. The truth is that basic macroeconomics, the stuff that is still taught in textbooks, has been very, very useful in this crisis. The problem is that half the profession and most policy makers turned their back on this kind of economics.

It’s especially ironic that Davies starts his piece by quoting Jean-Claude Trichet, of all people, complaining that the available tools were of no use. Trichet, some readers may recall, was one of the high priests of expansionary austerity, the assertion that slashing government spending in a depressed economy actually wouldn’t make the depression deeper:
As regards the economy, the idea that austerity measures could trigger stagnation is incorrect."
“Yes. In fact, in these circumstances, everything that helps to increase the confidence of households, firms and investors in the sustainability of public finances is good for the consolidation of growth and job creation.
So standard economics told him that austerity would depress economies; he chose not to believe that, and go with the confidence fairy; and he was wrong, wrong, wrong. How is that a problem with the inadequacy of economics?

Now, what is true is that efficient markets and equilibrium business cycle theory have suffered what should be fatal blows to their credibility — but essentially nobody in that camp is even willing to admit that there is a problem. What that says, however, is that while we obviously need new thinking — we always do! — the biggest problem these days has been the rejection of knowledge we used to have.

Do you see why I like him?  No bull****, just the facts and facts that are easy for anyone to understand.  So, if you see me quoting Paul Krugman, you'll know of whom I quote.

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