Friday, February 3, 2012

More Crow for Krugman to Eat

The pace of growth in the services sector rose 56.8 in January, its highest level in almost a year, according to the Institute for Supply Management. Keynesian economists were way off and had expected the index to only hold steady at 53.0, according to a Reuters poll.

Factory orders also climbed by 1.1 percent in December. It is the second month in a row of growth, according to the Commerce Department.

The hardcore Keynesian Paul "under depression conditions — which is what we have now" Krugman had no clue.

7 comments:

  1. What I don't understand is that if Keynesians agree that easy money can create a bubble - why don't they agree with the boom-bust cycle described by the Austrians?

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    1. because they're paid to believe it.

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    2. Agree. Ron Paul needs to get on stage and explain what's happening, because the clueless advisors of Obama and Romney have no idea.

      Obama said jobs bill or depression in July. He must be wondering what the hell happened.

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    3. I think in general, the Keynesian position is that inflation is needed for growth. With no inflation, or even worse, deflation, money isn't moving through the economy quickly enough to fund consumption, which leads to higher employment. They discourage saving and investment, and focus on consumption. If you just create more money and give it to the consumers, you see an instant boost in consumption. If you put the right people in charge of pulling the right levers and pushing the right buttons, you can maintain that growth without creating a bubble.

      I'm not a Keynesian, so this might be completely incorrect.

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    4. Thanks Brian, that looks like a decent explanation. So what we needed was just the right people pulling the right levers, this way engineering the economy in aggregate back to the bubble output level, so that the aristocrat Keynes and his banker friends could make back the money he and they lost in the 1929 crash. And then wrap it under the socialist banner.

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  2. It's a very funny question. The boom can come from moneetary expansion, but they bust comes from...capitalism?

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  3. Krugman has been humiliated yet again! Does this guy ever get any prediction right?

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