Tag Archives: economics

“Europe will arguably be lucky if all it experiences is one lost decade.”

That’s the prognosis of economist Paul Krugman, who details how austerity principles have left Europe in a deflationary slump, a slump that should vindicate those have argued that stimulus spending is needed to jumpstart the economy:

The good news is that things don’t look that dire in America, where job creation seems finally to have picked up and the threat of deflation has receded, at least for now. But all it would take is a few bad shocks and/or policy missteps to send us down the same path.

The good news is that Janet Yellen, the Fed chairwoman, understands the danger; she has made it clear that she would rather take the chance of a temporary rise in the inflation rate than risk hitting the brakes too soon, the way the E.C.B. did in 2011. The bad news is that she and her colleagues are under a lot of pressure to do the wrong thing from the too-muchers, who seem to have learned nothing from being wrong year after year, and are still agitating for higher rates.

How Paul Krugman evolved from an elitist economist to a populist critic

The key to understanding Krugman’s feuds is that he is driven by a very particular kind of professional elitism that can cut in two directions. He rose to fame as a public intellectual in 1994 as the author of “Peddling Prosperity,” which was both a popular primer about economic policy and a lacerating attack on what Krugman called “policy entrepreneurs,” his term for non-economists who sold politicians on simplistic but false economic remedies. Krugman reserved his deepest ire for supply-siders on the right, but partially balanced that out with attacks on liberals like Robert Reich. Krugman’s premise was explicitly elitist: He believed economic policy needed to stay in the hands of real economists, not amateurs with spreadsheets.

Krugman’s attack on the credentials of populist liberals like Reich made him nearly as much of a hate figure on the left as the right. A 2001 cover story by Robert Kuttner in the liberal American Prospect called him “the conservative’s ideal liberal.” It was decorated with a cartoon depicting Krugman in the trench coat of a seamy peddler, or perhaps a flasher.

Krugman has since rocketed to higher levels of fame by assailing the phony economics of the Bush administration in the last decade, and then, what he called the “Very Serious People,” who clung to superstitious fears of debt and inflation in the face of overwhelming evidence that the economy needed more demand. Krugman’s first incarnation positioned him as a snobbish defender of the economic elite, and his more recent incarnation, as a populist critic. But they both reflect a very particular kind of veneration for credentialed economic expertise.

Why Paul Krugman Turned Against Nate Silver