Re: Krugman's Love Letter to Markets, not to Enron

["Harry L. Cook" <hlc710@xxxxxxxxxxx>]

Whatever people  can manufacture to criticize about Krugman, he is one of the very
few economists of stature who has a platform and is making good use of it to inform
people what is going on in this administration.


                                                                        Harry L.Cook

"Henry C.K. Liu" wrote:

> Clifford Poirot wrote:
>
> > I think the important thing about Krugman is to criticize him for what he
> > deserves to be criticized for. For some strange reason he has emerged as the
> > whipping boy of the right. Perhaps because of his pseudo-Keynesianism and
> > identification with Al Gore, Bill Clinton and Lawrence Summers.
> >
> > If you actually read most of his work, it is clear that by and large, he is
> > a fairly conventional mainstream economist, who occasionally says something
> > interesting or non-mainstream, and tries to tie it to Keynes.
> >
> > Galbraith he is not. Not even close.
> >
> > But he has succeeded in making a sort of luke warm centrism intellectually
> > attractive, selling the idea that government policy can be effective. From
> > the perspective of the right, that is the unpardonable sin.
> >
> > >From the perspective of Post-Keynesians, Krugman's "sin" was not in taking
> > money from large corporation, but in praising the entire system of
> > deregulation.
> >
>
> I agree. That is why it is ludicrous for Krugman to defend his serving on the
> Enron Advisory Board with his love letter to markets.  It is defending a
> superficial sin with a cardinal sin.
>
> Keynes's 'The General Theory of Employment, Interest and Money' (1936) showed
> that Adam Smith's classical model - founded on the virtues of thrift and
> balanced budgets, laissez faire capitalism and free trade - was a 'special' case
> and only applied in times of full employment.  Keenness' model portrayed the
> market as a car without a driver or a destination, allowing the slightest bumps
> in the road to push the economy off the road at any time and not necessarily
> heading toward common good. He showed that the economy needed an activist
> government to steer it on the road of full employment.   The fundamental flaw of
> market fundamentalism is that it is valid only under full employment, while the
> measures taken in the name of market fundamentalism directly increase
> unemployment, making market theories inoperative.
>
> Actually, most economist are very intelligent.  When reading their writings,
> from Keenness to Hayek, Galbraith to Freidman, if the reader does not challenge
> basic ideological assupmtions, the logic tends to be flawless, or at least
> defensible within narrow limits.  Thus the arguement that a particular economist
> may be wrong headed, but still has a lot to say is rather irrelevant.  We do not
> read economics for amusement, though the undrtaking can be amusing, but for
> understanding to solve real. pressing problems.  Heading in the right direction
> is the whole game.
>
> Krugman's record has not been prescient, although he is intelligent enough and
> ideologically neutral enough to shift positions before the obvious. He was not
> first to warn about the Asian financial crisis as he likes to claim, although he
> was the first that Citibank listened to.  People before him were simply
> dismissed as cranks.
>
> There is a whole gang of social scientists at MIT, ranging from economics to
> arms control and foreign policy, who claim to be "scientific" in approach, but
> in reality merely give intellectual anchor to the latest national interest fad.
> Unlike the Chicago boys, ot the Harvard boys or the Stanford boys who are
> ideologically defined, the MIT boys pride themselves as being ideologically
> neutral, but in fact their ideology is power.
>
> Henry C.K. Liu