It's Official: Paul Krugman Is Right (But He Has Not Won)

It's Official: Paul Krugman Is Right - Business Insider

Henry Blodget at Business Insider has said Krugman has won the argument against austerity. Krugman has not won. Here is the deal. Austerity is useless. So in that sense, Krugman is right. He is right about austerity

But he has not won and here is why: Stimulus if applied incorrectly makes things worse. Stimulus in an age of little regulation of commodity futures speculation will raise, not lower, the cost of living.

Keynesianism worked in the Great Depression because there were regulations limiting commodity speculation. That does not exist today. 

Comments

  1. Absolutely. Any stimulus will simply end up as more bets on bets, or worse, SFH cash-only investor bubbles - unless it's applied correctly, to infrastructure, education and most importantly, high tech manufacturing (not R&D)

    ReplyDelete
  2. Yes, at least in the Great Depression the stimulus was applied to main street.

    ReplyDelete

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