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[Y2HH]

I want a green energy bubble. I will directly advocate for an enormous amount of money being wasted on green energy developments, most of which wind up busting. You can quote me on that 10 years from now.

 

Money spent wisely is an investment...what you promote here could turn into a gold mine...

 

Or it can turn into a bunch of nothing if the wrong people are in charge of making the decisions.

 

I don't think that spending on future tech is a bad idea...but if the key word you use, wasted, is what they do instead...then they shouldn't bother.

[Y2HH]

"Concede to my position, then we can all talk about how we agree"

 

I'm not asking you to concede to my position. But you're defending Krugman despite his own words damning him. Yes, he f***ing DID promote it, whether it was to work with some other persons fiscal politics or not. It was a bad policy from the get go. He agreed with the person that originally promoted the idea as the fix. While I understand it was to coincide with Greenspan's policies, backing a bad policy to work with more bad policy is...well, bad policy.

 

This is where you need to take the blinders off. You say he didn't promote this, despite the fact that he did, and that's being blind. So, I repeat...take the blinders off and then we can have a real conversation.

 

And stop making excuses and adding caviots to why he said what he said. He promoted bad fiscal policy for a quick fix, which is what he always does, which is my point about him to begin with.

 

He said it...and I'm not taking it out of context. He advocated the creation of a bubble to fix what was ailing the economy at the time...whether you like it or not.

Edited August 1, 2011 by Y2HH

[Balta1701]

Money spent wisely is an investment...what you promote here could turn into a gold mine...

 

Or it can turn into a bunch of nothing if the wrong people are in charge of making the decisions.

 

I don't think that spending on future tech is a bad idea...but if the key word you use, wasted, is what they do instead...then they shouldn't bother.

2 points.

 

First, if it's a "Bubble", then that will mean by definition that a bunch of speculative dollars are rushing in, most of which will be lost. In the tech bubble, this was a short term bad thing...all our .com's imploded. In the long term, it also set up the infrastructure on which Google and Facebook are running today. The housing bubble left us with a bunch of decaying homes in the middle of no where that no one wants. The tech bubble at least left some solid leftovers. That's what a "Green energy bubble" would be...even if 95% of the investors got burned, the societal results would be solid.

 

Second...right now a "Bubble" would be a really nice thing in getting an enormous amount of idled capital off of the sidelines and invested in something. Even if it's going to be lost in the end and people are going to flee back to bonds again...this would be a short term boon to the economy when it desperately needs one.

[Y2HH]

2 points.

 

First, if it's a "Bubble", then that will mean by definition that a bunch of speculative dollars are rushing in, most of which will be lost. In the tech bubble, this was a short term bad thing...all our .com's imploded. In the long term, it also set up the infrastructure on which Google and Facebook are running today. The housing bubble left us with a bunch of decaying homes in the middle of no where that no one wants. The tech bubble at least left some solid leftovers. That's what a "Green energy bubble" would be...even if 95% of the investors got burned, the societal results would be solid.

 

Second...right now a "Bubble" would be a really nice thing in getting an enormous amount of idled capital off of the sidelines and invested in something. Even if it's going to be lost in the end and people are going to flee back to bonds again...this would be a short term boon to the economy when it desperately needs one.

 

I agree, but the .com bubble's speculation was a bit more out of whack than usual. Yes, any such investments in new technologies are risky, but the problem with the .com bubble and the investment in them is that most of the businesses they invested in really had no business plan. Their entire business plan was to grab any idea out of the air, create a .com around it, get VC money...get some quick paydays and well...that's about as far as their business plans went. There was no sustainability after the fact for most of them.

[StrangeSox]

I'm not asking you to concede to my position. But you're defending Krugman despite his own words damning him. Yes, he f***ing DID promote it, whether it was to work with some other persons fiscal politics or not. It was a bad policy from the get go. He agreed with the person that originally promoted the idea as the fix. While I understand it was to coincide with Greenspan's policies, backing a bad policy to work with more bad policy is...well, bad policy.

 

This is where you need to take the blinders off. You say he didn't promote this, despite the fact that he did, and that's being blind. So, I repeat...take the blinders off and then we can have a real conversation.

 

And stop making excuses and adding caviots to why he said what he said. He promoted bad fiscal policy for a quick fix, which is what he always does, which is my point about him to begin with.

 

He said it...and I'm not taking it out of context. He advocated the creation of a bubble to fix what was ailing the economy at the time...whether you like it or not.

 

Are you familiar with the concept of a "quotemine"?

[Y2HH]

Are you familiar with the concept of a "quotemine"?

 

I already said I didn't quote him out of context. But thank you for playing. He said what he said, and you are free to agree with his continued promotion of short term fix after short term fix to what is a glaringly a long term problem.

 

I just do not agree with his policy of doing so.

[StrangeSox]

Noting something does not mean promoting or advocating it. The fact that he uses a pejorative to describe it and implies that it'll simply lead to another bust should make that pretty clear, but I guess its those blinders you've got on.

 

Also, he was right. We had a housing bubble that brought us out of this recession only to explode into the current one.

[Y2HH]

Noting something does not mean promoting or advocating it. The fact that he uses a pejorative to describe it and implies that it'll simply lead to another bust should make that pretty clear, but I guess its those blinders you've got on.

 

Also, he was right. We had a housing bubble that brought us out of this recession only to explode into the current one.

 

I already said his short term fixes were right/and they work, and that they're great for providing short term results...of course if you bothered actually reading my posts as closely as you read Krugman's, you'd have seen that.

 

And he didn't just note it, he agreed with it. And again, I was using it to show his historic penchant for promoting very short sighted fiscal policy. It's what he did then, and it's what he's doing now. I've stated that case pretty clearly now. See, I remember a lot about Krugman and the policy he promoted back then because I was interested back then, of course that was the only example I took the time to find. Believe me there were more. You were at frat parties, because you were what, 19?

 

We can consider this conversation closed now, as it's clearly not moving forward.

Edited August 1, 2011 by Y2HH

[StrangeSox]

I've already posted a link to Arnold King, who's an adjunct scholar of the CATO institute and thus not an "ultraleft" liberal, defending Krugman on this issue.

 

In 2002, he passed along a joke that the economy needed a housing bubble. Krugman is controversial, so the post generated comments on this blog and elsewhere, some of which are overly "gotcha" in character.

 

Some points I would make:

 

1. Krugman was mainly expressing pessimism. He was not cheerfully advocating a housing bubble, but instead he was glumly saying that the only way he could see to get out of the recession would be for such a bubble to occur.

 

2. In the event, we had a housing bubble and we got out of the recession. To me, this raises the question of whether a distorted recovery is better than an undistorted recession. That question might be asked in the context of fiscal stimulus as well--at what point do the distortions of the stimulus outweigh getting out of a recession?

 

3. I personally do not think that Greenspan caused the housing bubble. I do not believe that monetary policy and short-term interest rates are as all-powerful as many economists do. What I was writing in August of 2002 was this.

 

4. Paul Krugman and Brad DeLong thought that Greenspan kept rates too high in 2002. This makes them poorly positioned to criticize Greenspan now for keeping rates too low. I am pretty sure that Brad is guilty of this hypocrisy. I believe that Paul is not.

[uPDATE: Brad denies committing this hypocrisy, and he is right. He has stood by his views that interest rates in 2001 and 2002 were, if anything, too high. I stand corrected.]

 

5. The main reason I put Paul's quote on my blog was because I am compiling a history of the events that caused financial crisis. I have a paragraph that says:

 

the current crisis led to a sharp recession that could not be mitigated with monetary expansion. This suggests that in hindsight more should have been done to prevent the housing bubble from expanding as much as it did. This in turn suggests that the monetary easing that took place from 2001-2003 was excessive. However, at the time, the sluggish growth in employment (the 2001-2003 period was commonly referred to as a "jobless recovery") was thought to justify the monetary expansion and low levels of interest rates.

 

The Krugman quote can help to support that paragraph. I can pick other quotes, obviously, but the one about needing a housing bubble is particularly poignant.

[Y2HH]

I've already posted a link to Arnold King, who's an adjunct scholar of the CATO institute and thus not an "ultraleft" liberal, defending Krugman on this issue.

 

 

 

The Krugman quote can help to support that paragraph. I can pick other quotes, obviously, but the one about needing a housing bubble is particularly poignant.

 

What you posted here points back to my original argument -- which you continue to argue against -- that Krugman has a history of promoting short term fiscal fixes to long term problems.

 

He was doing it then, and he's doing it now.

 

His current solution to this mess is to borrow more and spend more...and short term, once again, this would work.

 

That is, until our children have to start paying it back.

 

I don't want the government, or people like Krugman passing this crappy ass idea off as a good one. I'm tired of pushing our debts onto our sons and daughters because this is a snowball rolling down a hill. Every short term fix we implement, which Krugman promotes, makes the snowball a little bit bigger and a little bit faster.

 

We aren't going to borrow our way out of this and I understand that you and Krugman think we can.

Edited August 1, 2011 by Y2HH

[StrangeSox]

promoting

 

You keep using that word. I do not think it means what you think it means.

 

Anyway, since you can't admit you were wrong (here's Krugman in 2002 saying that a housing bubble would be bad!), what's your prescription for fiscal policy right now?

 

edit: lol at an article that explicitly explains how Krugman wasn't actually promoting a bubble backing up your argument that he was.

Edited August 1, 2011 by StrangeSox

[southsider2k5]

The current Federal government is about $3 trillion or so right? So to get to $150 trillion in 10 years the government needs to average spending that is 5x what it currently is?

 

Man, you are expecting some insane inflation. On the bright side, the national debt will drop from 100% of GDP to like 5% of GDP. We could pay it off in 15 minutes.

 

I was using your comparison of GDP to government spending and debt.

[Y2HH]

You keep using that word. I do not think it means what you think it means.

 

Anyway, since you can't admit you were wrong (here's Krugman in 2002 saying that a housing bubble would be bad!), what's your prescription for fiscal policy right now?

 

edit: lol at an article that explicitly explains how Krugman wasn't actually promoting a bubble backing up your argument that he was.

 

Here is the disconnect. And there are a lot of problems with this conversation because of how much Krugman flips his policy decisions between presidential changes, not to mention he has the right to change his mind over time, or as times change, as we all do.

 

I understand what you are saying, and I understand what Krugman was saying at the time. I remember it, because I was invested the stock market back then, and thus my interest in trying to understand what was going on at the time. Krugman basically backed the idea of risking a housing bubble because it was the only way out of what we were in under Greenspan. This touches on what you said about Krugman talking about the bubble in relation to Greenspan's policies. While I'll concede he didn't directly promote the bubble himself, he did in response to what was going on at the time...he was basically saying that risking the bubble is better than not to get where we need to get. I disagree with his position here, as I usually do when anyone brings up a risky short term solution to a long term problem.

 

In that article you posted, he advocates lowering interest rates and says our budget has long term strength in case they don't lower the rates enough. In other articles he directly blames those same low rates for helping create the bubble you claim he's against. It's pretty unfair to discuss this, even in relation to Krugman, because over time, a person that writes that much will inevitably contradict themselves...especially as times change, etc. And he openly admits in that article he's had to backtrack on some of his original thoughts.

 

This argument turned into Krugman's writing over time, and it wasn't really about Krugman writing over time, but his penchant for advocating short term solutions over and over again, which is what he's doing now...and how his ideology infects what he says (at the time he says it).

 

If he's advocating a housing bubble would be bad, then he shouldn't be advocating the lowering of interest rates...because as he says now, borrowing while interest rates are low is what people/businesses/governments SHOULD do. And he's right, so long as they can pay it back. The problem is, I don't believe we can pay it back...as I don't believe we've made ANY actual debt payments in the last 2 decades...I could be wrong on this, because I haven't looked it up. But I wouldn't be surprised to find out debt did nothing but rise the last 20 years while we did nothing but pay interest on loans. As we all know, making interest only payments is no way to get out of debt.

 

In the end, I just don't like how he allows his politics to creep into his economic policies. And as I see it, they do...but I could be wrong.

Edited August 1, 2011 by Y2HH

[Jenksismyhero]

So, is it just me or did pretty much everyone in this default debate get screwed? This thing they passed is pretty worthless after all this time. Less than a trillion in cuts, over a decade, starting in 2014. Some panel that's gonna come up with 2 trillion more by November. And all the "cuts" aren't really "cuts" but are decisions not to spend money they already thought they were going to spend.

 

Pretty f***ing typical. God I hate our government.

[Cknolls]

Well, he's a Nobel laureate and his textbook is widely used, so I dunno how accurate your statement here is.

 

 

Stop the presses, a liberal college professor has his textbooks used by other liberal college professors.

[StrangeSox]

Stop the presses, a liberal college professor has his textbooks used by other liberal college professors.

 

That'd still make him widely-respected.

[Y2HH]

That'd still make him widely-respected.

 

By that rational, so is Limbaugh.

[farmteam]

By that rational, so is Limbaugh.

 

Eh, I think it's safe to say Limbaugh will never win a Nobel. I'd also say there's a difference between listening to a talk-show and making a large-scale purchasing decision.

[Y2HH]

Eh, I think it's safe to say Limbaugh will never win a Nobel. I'd also say there's a difference between listening to a talk-show and making a large-scale purchasing decision.

 

I didn't say he'd win a Nobel, which they seem to be giving out like candy these days anyway, so it's possible. Regardless of that, he's still well respected by a lot of people, whether you like/agree with them or not.

 

Is the Nobel in Economics a true Nobel, anyway? Isn't it something else they say is equal to a Nobel? Meh, doesn't matter. There was a time I respected the coveted prize much more than I do now...it seems to have become more of a political statement in winning one than it is to be a stalwart in your respected subject matter. But I'm sure this is subject to a whole other argument/thread where politics will surely leak into the argument from both sides solidifying my argument in the first place.

 

That said, I think he's as much of an idiot (actually moreso) than Krugman.

Edited August 2, 2011 by Y2HH

[Balta1701]

No it's actually not a true Nobel, but it gets honored with them at the same event. It really is odd.

[Balta1701]

Jpmorgan team estimates this deal will knock 1.5 percentage points off of 2012 GDP.

 

Of course, that's a decent argument that it won't do nearly as much damage as I think.

[Y2HH]

Jpmorgan team estimates this deal will knock 1.5 percentage points off of 2012 GDP.

 

Of course, that's a decent argument that it won't do nearly as much damage as I think.

 

It looks like a big deal now, but I bet people hardly remember it happened in 5 years.

[Balta1701]

It looks like a big deal now, but I bet people hardly remember it happened in 5 years.

Yeah, they'll be too angry at the fact were still at 9% unemployment.

[Y2HH]

Yeah, they'll be too angry at the fact were still at 9% unemployment.

 

Bold prediction...

 

We may be at 18%, or we may be at 2% in that amount of time...who knows.

[mr_genius]

Jpmorgan team estimates this deal will knock 1.5 percentage points off of 2012 GDP.

 

Of course, that's a decent argument that it won't do nearly as much damage as I think.

 

GDP is going down anyways. mix in a whole bunch of corporate layoffs... not a good situation.