Despite the resurgence of Keynesian economics and the popularity of Nobel Prize winner Paul...

Despite the resurgence of Keynesian economics and the popularity of Nobel Prize winner Paul Krugman, MarketWatch's Howard Gold sees some chinks in his armor. Gold makes the following counter-argument: Much of today’s unemployment is actually structural, the European crisis shows that countries’ long-term debt really does matter and Keynesian economics track record is more hyperbole than substantive reality.

Comments (22)
  • into dark shadows
    , contributor
    Comments (460) | Send Message
    Popularity of Paul Krugman?
    Surely you jest!


    Don't call me Shirley!


    Krugman is a hack who has only one idea.
    Conquer our debt problem with,


    Yeah, that's the ticket!
    Ticket right off the cliff...
    15 Jun 2012, 07:10 PM Reply Like
  • montanamark
    , contributor
    Comments (1455) | Send Message
    i think they mean "popular" from the perspective of SA editors


    what a revealing day
    15 Jun 2012, 07:35 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11169) | Send Message
    I defy anyone to post a link or a quote where Krugman discusses PAYING OFF debt.


    He has NEVER offered a solution to debt...only solutions to austerity and fiscal prudence.
    15 Jun 2012, 07:12 PM Reply Like
  • DougRk
    , contributor
    Comments (1899) | Send Message
    Lost in the discussion of monetary policy is the elephant in the room: regulation and a predatory legal system. I don't care what pumping is done, the climate in the US and most Western nations is hostile to and hampers business with paperwork, lawsuits, threats, dictates, rules, etc.
    15 Jun 2012, 07:18 PM Reply Like
  • montanamark
    , contributor
    Comments (1455) | Send Message
    oh that elephant; i thought maybe you were referring to the unprecedented, unconstitutional power grab by our king giving amnesty to illegal aliens who might vote for him. Just last year he admitted he did not have the legal authority to do that. Deafening silence by the obama media except for their outrage that a reporter would dare to ask a question.
    15 Jun 2012, 08:15 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1911) | Send Message
    right, all the regulation that lead to the housing crisis in the first place right? oh give me a f*cking break....deregulation in the financial markets (pointing at you Mr. Clinton for the repeal of the Glass-Steagall Act as a starter) has caused more issues than regulation ever has.
    15 Jun 2012, 11:50 PM Reply Like
  • DougRk
    , contributor
    Comments (1899) | Send Message
    @idk, the world is not all finance. I'm talking meat and potato industry.


    For example: "Upon taking office, Hamburg promised an aggressive effort to enforce the FDA’s stringent manufacturing standards. In 2010, Hamburg’s officials issued 673 warning letters to drugmakers and other companies: a 42 percent increase from 2009. In 2011, the agency issued 1,720 warning letters: a further increase of 156 percent.


    The impact of Hamburg’s enforcement actions was swift and dramatic. Of America’s five largest manufacturers of generic injectable drugs—APP, Hospira, Teva, Bedford, and Sandoz—the latter four were effectively forced to simultaneously take significant production off-line in order to deal with FDA warnings. As a result, their production of generic injectables declined by 30 percent, contributing to a massive shortage. “Pharmaceutical companies, despite running available production lines around the clock, are now forced to decide which drugs to continue producing and which to stop producing, and whether to cease production temporarily or permanently,”



    Repeat that regulatory zeal over countless industries and you have a US unable to efficiently do anything. We just muddle along.
    16 Jun 2012, 02:40 AM Reply Like
  • noob
    , contributor
    Comments (393) | Send Message
    It doesn't really matter what evidence there is that Keynesian Economics doesn't work, let alone is harmful. The politicians love it.


    Keynes gave them an excuse to debase money without limit - allowing politicians to buy whatever votes they needed, as needed.


    And economists soon learned that if they keep chanting Keynesian Economics the Government will sponsor all kinds of grants and research projects - keeping these economists well paid for decades to come. Who wants to hire a economist that tells them they have to take actions likely to end their political career overnight when they can hire one who sanctions their slightest whims?


    Government, with the help of this framework of economics, has gone so far to the extreme that few people consider doing anything without government sponsorship or funding. When you hear someone talking about "something needs to be done" the following words are "by the government". And there are hundreds of talk shows making a living on this chatter.


    Where is the person who says, "if you feel something needs to be done then you better get busy."?
    15 Jun 2012, 07:18 PM Reply Like
  • winningtrader
    , contributor
    Comments (2459) | Send Message
    The Keynesian economists are just mouthpieces for politicians. Being a Keynesian economist means one thing only - you just confirm that what politicians are doing is the right thing and that these same politicians should borrow and spend more on their pet projects. These so called scientists (what a perversion of the word) are just salespeople for the ''great ideas'' that politicians have on how to spend other people's money.
    16 Jun 2012, 03:50 AM Reply Like
  • tradewin
    , contributor
    Comments (653) | Send Message
    someone here at SA mentioned that before. Something to the effect that throwing money at the problem is politically palatable. Didn't read the piece about Howard Gold except for the comment here, but he is right about the structural unemployment problem though. Frictional unemployment is much easier to deal with. Employers are looking for specific qualifications.
    15 Jun 2012, 07:43 PM Reply Like
  • rick flair
    , contributor
    Comments (369) | Send Message
    i've said this before , stop mentioning and printing thier names....its like crack to a junky, all your doing is enabling thier ugly tribal fixation, to see tand hear thier name, like a retarded bird.....just use a slur or something....sheesh when will people get it? all they care about is mentioning and talking and linking to each others names, the subject is COMPLETELY ireelevant, as is the opinion or lack of one...
    15 Jun 2012, 07:58 PM Reply Like
  • machiavelli
    , contributor
    Comments (723) | Send Message
    Yeah, where was the red tape that held back the $quadrillion of bogus derivatives trades? that is the kind of questions Krugman asks. you folks with your pedantic sound bites. Haha! I am going to love coming on here to troll fools after the Nov election. ^_^
    15 Jun 2012, 08:08 PM Reply Like
  • megaballs
    , contributor
    Comments (45) | Send Message
    When I graduated college in 1990 I was sure Keynesian Economics was thoroughly disputed and a relic of the past. How odd these years have been
    15 Jun 2012, 08:11 PM Reply Like
  • montanamark
    , contributor
    Comments (1455) | Send Message
    people love to be told there are no consequences to their profligate
    15 Jun 2012, 08:30 PM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
    Lets be fair to Keynes. He didn't write about states that were massively in debt spending more money to create growth. He wrote about states assuming they were operating from a prudent baseline.


    Our government is broke. Its plain and simple. And no one knows what Keynes would write today regarding the situation. He wrote explicitly about temporary government spending to spur growth - and wrote explicity about pulling that spending in and changing fiscal policy going forward once growth was taking in.
    15 Jun 2012, 08:40 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9903) | Send Message
    Exactly. Governments don't follow Keynes anyway. They just continually spend and create more debt. If they actually followed Keynes we would not have the mess we have today. Krugman is not a Keynesian, but rather is just an irresponsible propoganda pundit who always advocates more spending and more debt yet never has any recommendations on how or when to reduce spending and reduce debt.
    15 Jun 2012, 10:35 PM Reply Like
  • Jolly_Rancher
    , contributor
    Comments (625) | Send Message
    Krugman correctly says: "What Keynesian economics?" The fact is that total government employment has plummeted and is still falling. After the initial stimulus in 2009, total government spending is flat. The initial government stimulus was largely tax cut continuance which isn't exactly stimulus. Tax cuts don't have a great long term record anyway as economic stimulants. More problem arises from huge government debt resulting from banker bailouts. Krugman is right and getting righter. The federal government is all about bailing out banks and businesses with electronic money and dubious trade agreements rather than any true Keynesian spending.
    15 Jun 2012, 08:43 PM Reply Like
  • noob
    , contributor
    Comments (393) | Send Message
    I disagree with your assessment.


    I think Government made every effort to do everything it could consistent with Keynesian Economics and Hayek's "The Road to Serfdom" with the original crisis hit.


    And the people responded by ousting a majority of those politicians, creating a deadlocked government that is incapable of doing anything -- which is probably for the best considering.


    Unfortunately, until and unless there is an effort to unwind the Government we have no choice but to fall out of our current status in the world followed by a general collapse of society.
    15 Jun 2012, 09:43 PM Reply Like
  • bob adamson
    , contributor
    Comments (4560) | Send Message
    I was struck by the suggestion that the Euro zone crisis disproves the Keynesian take on economics. Keynes was a consistent opponent of the gold standard because it fatally constricted the range of monetary and fiscal policy alternatives open to a national government faced with an economic crisis. Others have observed that for Ireland, Greece, Portugal, Spain etc. the existence of the Euro as a national currency has the unintended affect of placing each of these countries in a very analogous constricted monetary and fiscal policy box. Further, the neo-liberal (i.e. liberal in the doctinare free market European sense) policies that Germany and other more favoured EU member States insist upon further constrict the size of this box in much the same way that orthodox clasic tight money and fiscal austerity policies followed in the UK in the 1920s hobbled its post WW I recovery (a matter against which Keynes argued strenuously throughout the 1920s and 30s.)


    In short, the Euro zone crisis has many causes but it's a bit rich to lay the blame on Keynes.
    16 Jun 2012, 02:33 AM Reply Like
  • remurraymd
    , contributor
    Comments (2274) | Send Message
    "Entitlements" in the 1960s got us where we are today
    Polticians do not get re-elected on "Austerity"
    Because that means those on the "Dole"
    Would get cut back or cut off.
    Legs up not hands out for us
    Job creation from tax reduction for us
    Corporate tax should be reduced to the lowest in the world
    to enhance "Re-shoring" 14% sounds about right to juice everything
    16 Jun 2012, 08:12 AM Reply Like
  • rick flair
    , contributor
    Comments (369) | Send Message
    if the 'media' haha made a point of not mentioning or printing these peoples names, it'd dry up i nseconds...they'd have to take thier tribal fixation somewhere else, hopefully back to thier homeland, where they could prattle and titter at each other like monkeys in tree....
    16 Jun 2012, 01:50 PM Reply Like
  • Thomas Kelly
    , contributor
    Comments (20) | Send Message
    The notion that Keynes espoused the idea that debt does matter is utterly false. In fact Keynes was well aware that debt does matter and he advocated running a surplus during a time of economic growth for this reason. The idea that our policies right now are following the Keynesian model is intellectual dishonesty.
    17 Jun 2012, 08:24 AM Reply Like
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