Um, I think at that point you have to reveal some of your own creds. I mean, the guy teaches at Princeton, writes for the NYT (not a shabby thing in itself) and has a Nobel prize**?
In logic, this is called a fallacious appeal to authority. There is no consensus among experts in the field of economics. If I pull up Ludwig von Mises as my expert, he will completely disagree with Krugman.
I didn't present my credentials because I don't have any meaningful credentials to this subject matter. What I did is make a statement and then provided information to back my statement up.
Like with Kevin, you are welcome to attack what I have written and debunk me based on the content of my post rather than my credentials.
Which are:
I have worked in technology for most of my 32 years in the business world (yes, I started working in technology when I was 18). I worked at Cisco Systems during a big chunk of the 90s and up until 2001. I got to ride the dotcom bubble to its fullest. I made a million, I lost a million. I worked at a couple of smaller tech companies and then I took some time off from 2003 to 2005 and traded stocks and wrote a stock trading/technical analysis (charts) newsletter. I made another million and lost another million. And then I went back to work in technology where I focus on wireless technologies.
Now, if you want to discredit or otherwise dismiss my views based on my resume instead of the content of what I have written, then can I not do the same for you? I mean, have you seen me say "Don't listen to this George guy, all he knows is woodsy the owl"? The answer is no, I have not. I have shown you the respect to address what you write and not your credentials.
If you disagree with what I write, then make your case, don't go for ad hominem or appeals to authority.
On Keynes and the current thinking on stimulus vs. austerity, he's in agreement with the majority of economists -- 3 others of whom I can think of offhand with Nobels themselves. But to call him amateurish is pushing it a little unless you're also working at that level.
Again, I made my case, show me where I am wrong.
It's also true that economics is kinda squishy as a science (compared to, say, physics and math) but it (at least Krugman, Reich, Stiglitz et al) insist that models be predictive in nature and that a basic scientific rigor be applied. What he and others keep calling people on is that the predictions made by those advocating austerity -- here and, especially in Europe -- have been wrong. That's wrong, wrong, wrong. The prediction by PK et al was that austerity would put Europe and the UK back into recession and unemployment would increase. That's what happened and, to the extent I understand it, it's basic Keynes.
There has been no austerity programs in europe. Every attempt has been met with riots. Real austerity isn't cutting a fraction of a percent from the budget. It actually means giving something up.
At no point has he or anyone else said we don't need to deal with so-called entitlements (e.g. SS, medicare). He's only said we don't do it now when we're in a recession. Even the conservative Joe Scarborough now seems to agree the government has to spend now to help the economy.
First, SS and medicare are not entitlements. We are forced to pay into SS and Medicare and we were promised that we would see the benefits in our later years. True entitlement programs, such as seen with the department of health and human services and housing and urban development should be where the cuts are made.
I mean, we can bandy numbers about all day but I cheerfully admit it's way beyond my grade level, poor but honest Forestry major that I am. The reason I like PK so much is he does tend to agree -- and reinforce -- my wild-eyed radical tendencies (Berkeley '73***) but he (and Reich and even Stiglitz) writes with clarity, humor and brilliant irony (hey, "zombie economics" as a term for discredited ideas that keep coming back whatever the evidence against them? Darned clever). They also use facts from usually reliable government sources (GAO, OMB etc).
I do not share your views that a guy with a forestry degree cannot have independent valid views on topics outside of forestry.
I am not going to go point by point on the rest of your post, but I will expound on my case against Krugman.
PK Sez
The interest-rate story is fairly simple. As some of us have been trying to explain for four years and more, the financial crisis and the bursting of the housing bubble created a situation in which almost all of the economy's major players are simultaneously trying to pay down debt by spending less than their income. Since my spending is your income and your spending is my income, this means a deeply depressed economy. It also means low interest rates, because another way to look at our situation is, to put it loosely, that right now everyone wants to save and nobody wants to invest. So we're awash in desired savings with no place to go, and those excess savings are driving down borrowing costs.
He is partially correct. A large part of our population is still trying to recover from the fallout of the housing bubble (another result of government intervention in a market). He correctly state that people are paying down debt by spending less than their income. He then equates this to saving. Paying down debt is not saving. The money that is going into debt service is not idle. When I pay off debt, that money goes to the financial institution that holds the debt and they in turn pay their people and they (the people and the company) can invest. Unless they are paying off other debt. But the money that I use to pay off debt is not savings. And I am asserting that it is so basically wrong that it is amateurish.
But let's go to his assertion that interest rates are low because there are excess savings while also making the assertion that people are trying to pay off debt. People don't save when they are awash in debt. They also don't invest. Again, this is an amateurish mistake that should be common sense to anybody.
Interest rates are low because banks can't get the general population to take their money as loans. Interest rates are lowered as incentive to people to take loans. The banks are essentially dropping the price of money. The reason that people don't want to take on more loans is that they already have a bunch of debt that they are already trying to pay down. So even though loan money is cheap, it is impossible for many people to take on more debt. Again, basic stuff here. A nobel prize winning, princeton teaching, new york times writing, economist should know better.
PK Sez:
Under these conditions, of course, the government should ignore its short-run deficit and ramp up spending to support the economy. Unfortunately, policy makers have been intimidated by those false priests, who have convinced them that they must pursue austerity or face the wrath of the invisible market gods.
There are two ways that the government can ramp up spending. They can tax us more or they can run on deficit spending. Both have negative economic impacts. Obviously, taxing us more means that we have less money to spend in the open market and that hurts the economy. Deficit spending has a longer term affect and it is definitely a slippery slope. The more our government borrows, the more it has to borrow to service our debt interest. Deficit spending over the long term is what brought us the situation in Greece and Spain and Portugal and a bunch of the other Euro nations. Keynesian economic policies work as a short term bandaid, but they have longer term economic ramifications that are negative. In many cases, they prolong the economic hardship. Bush's response to the economic mess that he was handed was not an austrian economic approach. He went with a Keynesian response that brought us a housing/credit bubble that necessarily had to pop.
