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Post by agito on Dec 20, 2008 13:24:49 GMT -6
Krugman makes an academic argument that backfires on him pretty explosively (315 comments and counting). Krugman is right. From a strictly economic point of view- you could have 2 holocaust survivors trading roachwings for sexual favors and you would have a functioning economy. I think that's his point though- wish he had elaborated on it some more. We aren't interested in a strictly economic answer to our problems- we are interested in a sociological answer to our economic problems.
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Post by judes on Dec 20, 2008 13:41:26 GMT -6
Yeah ok, so just where do the rich continue to get their riches from then?? Most of their money comes indirectly ( as in the huge transfer of wealth being seen now from the government handouts to the wealthy paid for by the masses) or indirectly from the working stiffs in one way or another. When the masses are obliterated the rich get obliterated too, eventually, even if it's generations of wealth later. It can't be sustained in perpetuity without others to draw wealth from to keep them rich. That is what is happening now, it is unsustainable, even in purely economic modeling it fails.
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Post by waltc on Dec 20, 2008 15:52:03 GMT -6
This is why I hate economists - the bastards don't live in reality but some academic fantasy world.
In theory Kruggie is right though. However NY City couldn't function unless it had a well paid police, fire, maintenance and all the other sorts of people needed to keep a city functional and healthy. And none of them would work for minimum wage either. So Kruggie's bullshit proposition falls flat reality wise.
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Post by graybeard on Dec 20, 2008 19:56:11 GMT -6
$200 dinners and hotels make a lot more menial wage jobs and very few middle class jobs. He's an idiot or a traitor sucking up to the rich.
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Post by db on Dec 20, 2008 19:58:43 GMT -6
Krugman needs to screw his head on straight. He sounds like a RepubliCon stooge.
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Post by unlawflcombatnt on Dec 20, 2008 21:27:39 GMT -6
$200 dinners and hotels make a lot more menial wage jobs and very few middle class jobs. He's an idiot or a traitor sucking up to the rich. He's not only a traitor, he's wrong. It's a well-accepted tenet in economics that the more affluent you are, the less you spend. If all the money went to the rich, there'd be less spending, everything else being equal. And if there's less spending, there'll be less true capital investment (i.e., excluding bonds, securities, and other worthless pieces of paper.) The reason a lot of economists are suggesting that the highest multiplier effect of a stimulus will come from $$ going to unemployment and food stamps, is because those are the poorest people, and are most likely to spend the money as a result. A society could limp a long at a much lower output if all the money went to the rich, like it did in France prior to the French revolution, but the end result is a society that produces far less wealth. And a society that limps along in that manner not only has a very low output, its output doesn't grow. There are far fewer spending-worthy consumers coming into the market. No growth takes place without an increase in aggregate demand, and very little occurs when all the money goes to those at the top, because they spend a smaller fraction of that wealth than those at the bottom. This is exactly what's happening today, and it's exactly why our economy is collapsing.
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Post by agito on Dec 21, 2008 15:14:31 GMT -6
i think krugman made his statement a little tongue in cheek. addressing it more as a weakness of "strict economic theory" than it is a statement of what he believes- but i'm watching his column more attentively now.
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Post by waltc on Dec 21, 2008 22:14:15 GMT -6
I doubt it was tongue in cheek, it is sadly pretty much in sync with his views on employment and free trade. He's all but come out and state that we need to sacrifice our middle-class and manufacturing base in order to uplift other nations with our free trade agreements.
And he deserves the shellacking he got as we've been listening to this sort of crap from the GOP for the last 8 years.
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Post by unlawflcombatnt on Dec 22, 2008 2:08:23 GMT -6
it is sadly pretty much in sync with his views on employment and free trade. He's all but come out and state that we need to sacrifice our middle-class and manufacturing base in order to uplift other nations with our free trade agreements. That's exactly right. I've been reading Krugman for several years, and he just can't get over the fact that free trade is killing us. In an interview following his recent Nobel Prize award, he commented that we just "had to pass NAFTA." We've now got an annualized NAFTA trade deficit of -$150 billion. That's the equivalent of about 2 million jobs. Anyone that can still say we "had to pass NAFTA" has eliminated all their credibility. Amen.
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Post by redwolf on Dec 23, 2008 11:09:47 GMT -6
LOL - How did you come up with that one, Agito?
The person eating the $200 dinner is going to have a problem when he leaves the restaurant and those who can't afford McDonald's are waiting for him on the street.
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Post by agito on Dec 30, 2008 21:38:14 GMT -6
:-)
thanks- glad you appreciated that one! although i should have said "functioning economy." (in quotes) I think the biggest thing left unsaid about the invisible hand is that it doesn't care who survives and who doesn't. All that is necessary for an economy to function is for there to be 2 people, and if the invisible hand feels that is what is necessary-then that is where the invisible hand will take us.
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Post by blueneck on Dec 31, 2008 7:50:59 GMT -6
Exactly - middle to lower income people are much more likely to spend on goods and services than the wealthy. And there are much much more middle and lower class population
I remember back in the day when I worked in a sit down resturant and later as a sack boy in a super market. The obviously more affluent were always the lousiest tippers.
When a former grilfriend and I were running a cleaning and handyman service, the rich were also more likely to try to beat us down on price or try to stiff us altogether
The psychology is simple - people of more humble economics understand how hard people have to work for their money. And there is clearly a selfish and greedy streak that runs through most of the affluent, and even their wannabees like Joe the unlicensed plumber
I bristle at these "productive members of society" arguments in favor of supply side tax cuts. That is such a load of hooey. I 'll venture that a waitress in a busy resturant or a guy on a factory floor works harder for their money than any old rich fart sitting around at the country club, or Paris Hilton
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