May 12th, 2014

SKETCH: Professor Krugman, Where’s the Shark?

Paul Krugman, the Nobel-prize-winning economist is in Oxford until mid-June as the Sanjaya Lall Visiting Professor in Development and Business.

The liberal Princeton/NY Times professor just delivered his inaugural lecture asking the question (the almost-rhetorical question) Do We Face Secular Stagnation?

It follows on from his books The Age of Diminished Expectation, the Return of Depression Economics and articles like Is Capitalism Too Productive? The Myth of Asia’s Miracle and – suggested title – What Are You Laughing At, Can’t You See the State We’re In?

His proposition is that the glory days are behind us, that each recession has been harder to get out of than the last, that we will have extended periods of low-to-no growth, and that under-employment will create “dreary lives” for large numbers of people – because politicians will not listen to him and his $300bn job-creation schemes.

If Labour can get him onto a stage with Ed Miliband, the election will be in the bag. For the Tories.

He talked about the impulses to “austerity” saying that it’s as though governments want to engineer a gratuitous recession in order to have a pre-election year boom, “like the Government has done here” (cosy laughter from the full-to-overflow hall).

Small, bearded, charming, Prof Krugman looks like the oceanographer in Jaws. Remember, that clever fellow, expert in his field, ran up and down the beach warning the pleasure-seekers there was a giant shark out there waiting to devour them.

But the question for Krugman is: Where’s the shark?

Billions of jobs have been created since Krugman started writing, poor people in the Rhondda Valley have luxury goods, Third World life-expectancy is climbing. And even this last recession shows signs of ending, as recessions do.

We bucket along, whatever governments do to us, left or right. We boom, we bust. We live too well, we pay the price, but we still get to keep the flat screen TV.

Now, post-2007, inflation is at last down (Krugman said, just when we need 4 or 5 per cent inflation for full employment).

Savings are improving (but on Krugman’s account, that’s making everything worse on account of the “paradoxes of thrift, toil and flexibility” leading to the “liquidity trap”).

Growth is back (but built on unsustainable private debt).

Politicians won’t create demand (even though printing money is cost-free).

He describes recessions as technical monetary failures – “a magneto problem” that can be solved by politicians throwing the right switch. The resources are there, the models are there, leaders can create demand – it was a mystery why Treasury officials didn’t listen to him.

In this “bizarre world” he said, “virtue is vice and prudence is folly.”

He has also talked about the desire of people to see economics as “a morality play”.

That’s not only true but useful.

You are advising on development economics. You have two moral models to choose between.

Toil, thrift and low taxes on one side – state-created jobs and printing-press money on the other.

You don’t need black and white hats – or even a professor of economics – to know which is better than the other.


105 Comments

  1. 1
    Incapable Vince, deputy Chief Cockroach says:

    Like

    • 31
      Lord Wellard of No Apologies says:

      I saw David Cameron holding a “#Bring back our Girls” card on the BBC this morning. Lazy Git. If you’ve left your daughter down the pub again, go fetch her yourself.

      Liked by 1 person

    • 61
      y hid. wahid. says:

      wa.hid. the religion of peace, do u want a piece of me?
      growing teet says: calcium is in short supply.
      buy milk .
      .
      wa.id ..apparently means The ONE. who cannot be destroyed.
      so consume less cardboard.
      this view has come from afghanistan via tesco,

      Like

  2. 2
    Ah! wonder says:

    Didn’t he once to make Champagne ?

    Like

    • 7
      ahmonika says:

      We need an edit option

      Like

      • 94
        Clumsy git says:

        You’ve already got one. It is marked at the foot of each comment entry page with a button bearing the word “Preview”.

        Give it a try – you never know you might learn to be a bit more careful with your typing.

        Like

    • 12
      Reginald Iolanthe Perrin says:

      Are we getting our just Desserts?

      Like

  3. 3
    Labour's next PPB about Cameron says:

    Like

  4. 4
    Capt Apollo says:

    a die hard Keynesian and economic Pte Frazer crying “we’re dooooooommmmeed” unless we spend spend spend

    Like

    • 21
      Gordon McRuin, muttering in a padded room at CurrrrrrrrrrCudeeeeee Lunatic Asylum says:

      You see?

      I was write!

      ‘n hen there’s the borrowing

      ‘n the gold

      Like

  5. 5
    Ruth Smeeth PPC says:

    My husband has an ordinary job helping people who lose everything in tornadoes.
    (of which the secret bit doesn’t require a two state solution).

    Like

  6. 6
    David Ward says:

    This piece isn’t even written in coherent English. Clearly you have no understanding of what Krugman is saying.

    Like

  7. 8
    A Canadian in a smart suit says:

    Please George can I issue a Press Statement to knock this intellectual pygmy into touch once and for all ?

    Like

  8. 10
    don't make me laugh says:

    He thinks each recession has been harder to get out of than the last?
    He needs to chat with my granny about what life was like in the 30′s.

    Like

    • 17
      David Ward says:

      The 30s downturn from previous peak was shorter than this one has been so far. This is the longest ever.

      (btw – 20s was actually worse in the UK than 30s, as we stayed on Gold Standard to protect currency and financial interests rather than people’s lives).

      Like

      • 50
        Anonymous says:

        Krugman keeps banging on about Britain’s depression in the 30s in spite of the fact growth for the decade was strong overall. Fundamental error for an economist. We may have come off the gold standard but we operated a balanced budget policy – the opposite of he proposes.

        Liked by 1 person

        • 102
          Anonymous says:

          Well it was great to meet the Nazis in the 30′s.

          This is the problem with reparations -sometimes you can go too far with your demands ( ask the French)

          The US came off the Gold Standard in 72 and they’ve been printing money furiously for years and still are. Check your exchange rate for details.

          Parochialism is lovely but unfortunately there was ( and still is ) a big wide world out there. Interest rates will rise before the Fixed term General Election has begun.

          Damn for the Tories!!!

          Live with it and keep a close eye on your pension.

          Like

      • 52
        Still on Benefit says:

        And what shook the UK out of recession in the 1930s?

        Don’t mention the War!

        Like

        • 66
          Anonymous says:

          The recession was over in 32.

          Like

          • Bill Quango MP says:

            No it wasn’t.

            Like

          • Anonymous says:

            Okay I admit it. I was wrong. It was a year later.

            Like

          • Bill Quango MP says:

            The French were mired in recession from 34 until 40. Only ended when Adolf turned up and beat the crap out them.
            The Americans had a second recession in 37 when they stopped the government funded spending.
            The Japanese were in recession until 36. might have got out of it if not for their warlike tendencies. Huge austerity though. Huge. Old nails were removed from knocked down building for reuse as iron and steel were so scarce.

            Soviets? Well they ended their recession pretty early by killing a few million people. One way to get the jobless figures down

            And UK? We did in the 1930′s pretty much what we have done now. mild austerity for all with some big government cutbacks and steadying the finances until the economy recovers.

            Liked by 1 person

  9. 11
    jgm2 says:

    In this “bizarre world” he said, “virtue is vice and prudence is folly.”

    He’s right about that.

    Look at the Maximum Imbecile’s ‘prudence’. Fucking lunacy if ever I saw it.

    Liked by 2 people

  10. 13
    Bill Quango MP says:

    erm.. the thing about jaws and the Oceanographer Dr Hooper was that ..he was right. There was a big shark out there.

    Like

    • 30
      C O (Ξ7s1) says:

      Maybe a subtle mixed metaphor – considering that under Labour, and particular the Maximum Imbecile, the UK economy unsuccessfully tried to jump the shark.

      Like

      • 63
        Bill Quango MP says:

        perhaps. Anyway, the shark was killed and the Police Chief went about his business again..Until the next time..

        Maybe that’s the lesson? There has always been and always will be boom and bust. Even for sharks.

        Like

    • 90
      Apthorpe says:

      Indeed there is a shark. It’s the lack of productivity, the crippling levels of tax, the inertia of big government and the inability to imagine an econonmy not linked to asset bubbles. Dave the Heathite is no more able to address those issues that Millibean both will continue to mire the majority of the populace in low wages, low growth and low expectation.
      The so called ‘rebalancing’ of the economy has not happened in anything like the scope it needs to avert another bubble bursting.

      Like

  11. 14
    Krudeman says:

    STFU and buy my books on Amazon.

    Like

  12. 15
    Punter says:

    He’s sort of like Dr Evan Harris only with more economics jargon. Everything Krugman says is wrong and you’re best doing the complete opposite.

    Oxford’s reputation sinks further.

    Like

    • 27
      ahmonika says:

      I’d prefer to follow Warren Buffett. Wish I had.

      Like

    • 28
      pocket money says:

      ‘Everything he says is wrong and you’re best doing
      the complete opposite”
      Like David Blanchflower?

      Like

      • 36
        jgm2 says:

        That David Blanchflower isn’t laughed out of the room every time he opens his mouth is a total mystery to me.

        But then apparently there are people prepared to pay good money to have the Maximum Imbecile give an after-dinner speech. What fucking madness stalks the planet?

        Were they not paying attention while this incompetent jackass was fucking the UK economy? Were they taken in by his bullshit about it ‘starting in America’ and it ‘all the banks fault’. How can people who are so ignorant of this jackasses track record and so stupid as to be taken in by his lies get their hands on the 50K or whatever the fuck it is to pay to listen to this fucking imbecile?

        It is one of life’s mysteries.

        Liked by 1 person

      • 38
        Guffaws says:

        Aye, didn’t Blanchflower, a keen Labour supporter, predict 5 million people would be out of work?

        That’s up there with some of UKIP’s more florid forecasts.

        Like

        • 72
          Gordon the mental says:

          There wasn’t 5 million unemployed because I saved the world.
          Its all in my book.

          Buy a copy now and see how brilliant I was.

          Like

      • 77
        bergen says:

        Blanchflower is the most reliable economist ever. He is always wrong on everything. It’s quite a gift.

        Like

  13. 16
    David Alexrod says:

    The Fate of Empires:

    The age of pioneers
    The age of conquest
    The age of commerce
    The age of affluence
    The age of intellect
    The age of decadence
    The age of bearded men in dresses
    Collapse

    Like

  14. 18
    Fabians are Evil says:

    Yes but the Fabians will love him and lefties will wank themselves silly over his crazy utterances

    Like

  15. 20
    Winston says:

    I’ve had 3 UKIP leaflets in two weeks delivered to the house. Nothing from the other parties. Have they given up? Do they have any activists on the ground in the Home Counties?

    Like

    • 35
      well says:

      I’ve had a junk mail leaflet from “An Independence From Europe”
      printed to look suspiciously like a UKIP offering.

      Like

  16. 22
    Admit it, some of you find him/her sexy says:

    Like

  17. 23
    Ockham's Razor says:

    And she won the Eurovision Song Contest?

    Like

  18. 26
    barrowboy says:

    Does this sudden stillness from the BoE indicate interest rates rising this week ?!

    Like

  19. 34
    Andrew Neil says:

    Does this Sajaya Lall have have any grand daughter who may require squiring around the dreaming spires?

    Asia is most certainly the future , the trouble for this pipsqueak is that his “chosen” chums will be less likely to listen to such drivel and dance to their tune for a handful ofscheckels

    Here are some Indian ladies hard at work celebrating m impending visit to elceture at the Bombay university of ayrvedic massage

    Like

  20. 40
    LeamingtonLil says:

    Guido is seems you have embarked upon on a new strategy of divide and conquer. You post one article then once it gets going, you start yet another trivial
    topic to breakup the comments.

    Like

    • 82
      Mary fucking Tourette says:

      Guido feels compelled to wear bright yellow checked trousers these days but wishes to assure his readers that the bright red sweater and yellow scarf are merely optional extras and in no way a reflection of his master’s politics.

      Like

  21. 41
    Stewart Lee is an unfunny, smug, talentless cunt says:

    Like

  22. 42
    Helicopter view says:

    Rather than looking at the economies of individual countries, looking at the world in total, the geowing economies of China and elsewhere has offset the recession in the West.

    So, worldwide, there has not been a recession. It’s just that globalisation (improved communications and transport) means that some of the porrer parts of the world are starting to catch up with the West.

    Krugman needs to look at the big picture.

    Liked by 1 person

  23. 46
    aren't they all duckie? says:

    He’s what the phrase, “self regarding little prick”, was invented for.

    Like

  24. 47
    Can you tell whose career is over yet? says:

    The woman remembers being woken by “clicking of a camera” and Rolf was taking pictures of her.

    Rolf told the victim years after the holiday “that bikini always turned him on”.

    Like

  25. 48
    Andrew Neil says:

    I am venturing into Indian TV (wry smile)

    My first task will be to lay the foudations for a screamingly camp music fest
    Asian Vision
    Here are next years winners

    Rremember folks you read it here first

    Like

  26. 53
    The Knights that say says:

    Knee+gar

    Like

  27. 57
    ahmonika says:

    ex Rolf trial this am

    ” Mother told me, never trust a man with a beard”

    Like

    • 62
      Hatty HaPerson says:

      Ugh!!!!!!

      You wouldn’t catch me with a man – any man!

      Their hands go everywhere – and there’s only one thing they want from a girl!

      And then there’s all that mess to clear up!

      Ugh!!!!

      Like

    • 88
      Hirsute rules says:

      …..Wot about a woman wiv a beard?

      Like

  28. 60
    Socialist Mathermaiks, Innit says:

    Whenever I see Krugman on television, he looks like someone who’s managed to temporarily evade his guards and slip out of his strait jacket again. That’s why he talks so quickly — he knows he’ll soon be returned to the ward.

    Like

    • 68
      Bill Quango MP says:

      He looks like actor Charles Dance playing Tywin Lannister.

      For those without Game of Thrones knowledge Tywin is head of the richest kingdom on earth. Their wealth is legendary. They can buy continents if necessary.

      But that wealth has just run out.

      Like

    • 70
      Andrew Neil says:

      Hopefully a camp

      Like

  29. 64
    Anonymous says:

    Like

  30. 67
    Andrew Neil says:

    Happy days in the Ukraine

    Never been a fan of die juden myself

    Like

  31. 73
    The next fascists will be the enit-fascists says:

    Shush UKIP spokesperson, let the UAF person finish his point and have most of the airtime.

    Isn’t this a fascist statement “We are opposed to fascism”?

    Why the f*ck do I bother with that left wing shite called Daily Politics.

    Like

  32. 75
    Andrew Neil says:

    Like

    • 89
      rinky stingpiece says:

      I would…

      Like

      • 91
        rinky stingpiece says:

        It is certainly true that there’s no such thing as “white” – this is an American concept.

        There is no such thing as race, only ethnicity; and it is our indigenous, autochthonous ethnicity and identity that is under threat of becoming a minority in our own home.

        Like

      • 100
        SIZE 15 CARBON FOOTPRINT says:

        What gang of vile treacherous scum cheering on the genocide of their own people there are no words in any language to describe this utterly filthy crowd of verminous excrement !!!!!

        Like

  33. 79
    Socialism is theft says:

    Given the £1.3trillion national debt (and rising) and high consumer debt, maybe he is right that the future is not exactly rosy. And when interest rates rise so too will the debt repayments we have to make. The only solution is to reduce debt through real cuts in government spending.

    Liked by 1 person

  34. 84
    One says:

    He has also talked about the desire of people to see economics as “a morality play”.

    IMO it’s a high falutin’ excuse for gambling.

    Like

  35. 86
    U. Knott-Foolmey says:

    Guido’s good at gossip, but no economist.

    Any fule can see that the link between GDP growth and a rise in individual prosperity has in reality been broken in the UK, certainly. Which is precisely what Krugman was saying would happen.

    The breakage in that link is politically seismic – it essentially breaks the contract between government and people. It’s just no one’s really noticed yet. They will.

    Like

    • 98

      GDP measures economic activity, which means that the activities of the parasite Public Sector is conflated with wealth creation by the Private Sector. Add on the horrendous amount pissed away on debt socialisation, e.g. making the taxpayer cough up for bloody bird mincers and medical Research Centres that should be paid for by Pharma multinationals, AND the useless war-mongering EU, and it’s no wonder that rising GDP is disconnected from the well-being of the Nation.

      Like

      • 101
        U. Knott-Foolmey says:

        Take a look at the figures for GDP and take a look at the figures for percentage of GDP spent on the public sector. You’ll find there’s a high degree of correlation – poor countires have wafer thin public sectors.

        It’s pretty obvious that good governance contributes to wealth creation. Governments do things like supply or facilitate an effective transport and energy infrastructure. They educate the younger generation. They heal sick workers.

        The building of the UK motorway system was a government project – it vastly improved the efficiency of the UK private sector.

        The most prosperous and successful major industrial economy in Europe is Germany – and they love “Bird mincers”.

        The EU doesn’t really cost the UK that much – £3.5 billion net contribution is about £100 per household. It’s really more a rule making and free trade club…so far. The Afghan war alone has cost us about the same per annum.

        The real reasons for the disconnect are that we have given up on equality, and encouraged mass immigration with the related huge population growth, that placing huge strains on our physical and welfare infrastructure.

        We need to restrain the rich, and pursue more egalitarian policies, while halting mass immigration, substituting a sensible limited immigration policy, after leaving the EU.

        Like

        • 104
          An Engineer says:

          Sadly, the “bird-mincers” fail to generate enough energy in their lifetimes to ever offset the vast amount of carbon expended to construct, transport, and erect them. They are just there as a highly visible symbol of the last government’s bogus “green” credentials.

          Did you know that they have to be supplied with energy to keep them turning in periods of low wind, or else they seize up? The bigger offshore ones have diesel engines inside them for this purpose! The smaller ones use their generator as a motor, thereby actually consuming electricity!

          They are a monument to all the bogus “green” nonsense promulgated by the “Common Purpose” caucus….

          Like

  36. 87
    rinky stingpiece says:

    Nothing new there… try looking at the Price-to-Earning ratio graph since 1973 oil shock, and tell me it doesn’t look like a divergent fugoid, a la control avionic engineering. The current interest rates are disguising the trough we should be in.

    Liked by 1 person

  37. 92

    “Remember, that clever fellow, expert in his field, ran up and down the beach warning the pleasure-seekers there was a giant shark out there waiting to devour them.”

    Wasn’t the point of “Jaws” that there was a giant shark out there waiting to devour them?

    Like

  38. 96
    Doom McLaden says:

    Recovery? What recovery? This is all smoke and mirrors. Tonnes of foreign blood money pouring into London as a safe haven does not a recovery make.
    The entire western banking system is about to collapse, did you not get the memo? (or is it all trending tweets these days?)
    Ms Miley Cyrus -through the medium of dance- twerked the message to us a few months ago. She said when the US dollar is no longer accepted by the Chinese and Russians as the reserve currency, the over-leveraged dollar banking system will be no more.
    When the CIA and their Blackwater friends tried to destabilise Ukraine, CHina-Russia accelerated their special relationship. America has to now go to war to bankrupt Russia, or their empire is over. Barak Obanana and JoKe are going to sit on their hands, they don’t know the script; so no recovery for our little old aircraft carrier puppy-dog off the french coast, cash out all your savings and buy gold.

    Like

  39. 99
    Hmmm says:

    And here is the imbecilic Krugman advocating that a global effort to build defences against an imaginary alien invasion would somehow make people better off.

    Krugman would lose an argument with a typical GCSE student.

    Like

  40. 103
    Clown Shoes says:

    “You are advising on development economics. You have two moral models to choose between.”

    You are advising on building a fighter jet. You have two translations of The Odyssey to choose between.

    *facepalm*

    Like

  41. 105

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    how can i subscribe for a weblog web site? The account aided me a acceptable deal.
    I have been a little bit familiar of this your broadcast provided bright transparent concept

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    Like


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