The Paul Krugman Thread:

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1101 Fighteer7th Feb 2014 07:10:01 AM from the Time Vortex , Relationship Status: Dancing with Captain Jack Harkness
Geronimo!
Krugman wasn't all that impressive last night, but he always comes across as diffident in front of a camera. One imagines that as his Kryptonite Factor. To his credit, Colbert has learned to treat Paul with kid gloves compared to his usual style.

The important part is that the message got out.
1102 RadicalTaoist13th Mar 2014 02:47:15 AM from the #GUniverse
scratching at .8, just hopin'
Krugman wrote something here:
Think ... about the ever-popular slogan that we should seek equality of opportunity, not equality of outcomes. That may sound good to people with no idea what life is like for tens of millions of Americans; but for those with any reality sense, it’s a cruel joke. Almost 40 percent of American children live in poverty or near-poverty. Do you really think they have the same access to education and jobs as the children of the affluent?
Good stuff! It also inspired a blog post here.
Because education = jobs (as well as income and social mobility, not to mention quality of life), it seems to me preposterous to talk responsibly of any real "equality of opportunity" without also talking about extinguishing this nation's method of financing K-12 education—the property tax. Seldom has such an insidious joke been perpetrated on the Great American Majority, and especially the poor: while upper-middle- to upper-class public schools are showered with loot derived from their affluent physical surroundings, others must make do with the limited resources derived from quite limited "estates," which are limited, in large part, because of earlier-limited educational opportunities.
I would love to see a good economic analysis of the long-term effects of neglecting education.
1103 NativeJovian13th Mar 2014 09:42:20 AM from Orlando, Florida
Io vs Jupiter
Do you really think they have the same access to education and jobs as the children of the affluent?
Well, no, they don't — because we don't have equality of opportunity or equality of outcome. If we had equality of opportunity, then everyone would start at the same level and how far you went in life would be purely the result of your personal ability. A society with complete equality of opportunity would be a strict meritocracy. I don't think that total 100% equality of opportunity is attainable (nor do I think it's desirable — certainly we shouldn't let people starve on the streets or deny them access to health care because they're not economically able to provide for themselves), but we can certainly come much closer than we are now. The fact that the children of the rich have more access to education and jobs is proof that we don't have equality of opportunity, not that equality of opportunity doesn't actually provide equality of opportunity.

Of course, providing equality of opportunity would mean doing lots of wealth redistribution in the first place, so it's not like I'm disagreeing with his point.
1104 Fighteer13th Mar 2014 09:44:23 AM from the Time Vortex , Relationship Status: Dancing with Captain Jack Harkness
Geronimo!
Pretty much, yes. The issue here is not that a fully meritocratic society couldn't work, but that as long as we have fundamental inequalities of food, housing, medical care, education, and even legal protection, there is no possibility for equality of opportunity to exist in the first place.
1105 Greenmantle13th Mar 2014 02:55:47 PM from Greater Wessex, Britannia , Relationship Status: Hiding
Carrying On
And would equality of outcome be a good thing? I suspect not...
"Britannia Rules the Waves (if only)"
1106 Fighteer13th Mar 2014 03:17:41 PM from the Time Vortex , Relationship Status: Dancing with Captain Jack Harkness
Geronimo!
No, that doesn't make sense. You still need some way to motivate people to produce and excel. It's just that living in abject poverty is one hell of a dismotivator.

edited 13th Mar '14 3:18:16 PM by Fighteer

1107 Fighteer14th Mar 2014 07:24:39 AM from the Time Vortex , Relationship Status: Dancing with Captain Jack Harkness
Geronimo!
Krugman posted a micro-review of a new book by Piketty on the relationship of economic growth to dynastic wealth — that is, the ability of people with wealth to accumulate a dominant position in society on the basis of that wealth alone, without producing anything of value.

Long story short, our apparent belief that it is possible to "get ahead" through hard work and innovation may be an aberration in the general trend. Specifically, throughout most of history, most wealth has been inherited (or accumulated through rents), not earned, and it is only in rare cases that society shifts enough to allow the converse to be true.

1108 RadicalTaoist14th Mar 2014 08:09:50 PM from the #GUniverse
scratching at .8, just hopin'
“Every previous revolutionary movement in human history has made the same basic mistake. They’ve all seen power as a static apparatus, as a structure. And it’s not. It’s a dynamic, a flow system with two possible tendencies. Power either accumulates, or it diffuses through the system. In most societies, it’s in accumulative mode, and most revolutionary movements are only really interested in reconstituting the accumulation in a new location. A genuine revolution has to reverse the flow. And no one ever does that, because they’re all too fucking scared of losing their conning tower moment in the historical process. If you tear down one agglutinative power dynamic and put another one in its place, you’ve changed nothing. You’re not going to solve any of that society’s problems, they’ll just reemerge at a new angle. You’ve got to set up the nanotech that will deal with the problems on its own. You’ve got to build the structures that allow for diffusion of power, not re-grouping. Accountability, demodynamic access, systems of constituted rights, education in the use of political infrastructure”
- '''Richard Morgan
1109 Fighteer21st May 2014 01:07:52 PM from the Time Vortex , Relationship Status: Dancing with Captain Jack Harkness
Geronimo!
I have to pull this thread back up to the top, not to discuss economics, but because Paul is also a university professor and sometimes waxes sarcastic about his students' writing.
1110 TheyCallMeTomu21st May 2014 08:28:13 PM , Relationship Status: Wishfully thinking
Totes Moe
I'll admit I loled.

That being said, what's wrong with impact as a verb and the word incentivize? :P

edited 21st May '14 8:28:54 PM by TheyCallMeTomu

1111 Fighteer21st May 2014 08:29:45 PM from the Time Vortex , Relationship Status: Dancing with Captain Jack Harkness
Geronimo!
They are trendy buzzwords that say more about your lack of creativity than your education.
1112 TheyCallMeTomu21st May 2014 09:15:18 PM , Relationship Status: Wishfully thinking
Totes Moe
Blame my economics professors for teaching me buzzwords, then.

Brevity is the soul of wit; is there any more precise a way of saying "creates an incentive towards behavior X" than saying "incentivizes X?" that conveys the same meaning?

Language is a matter of function. If it were something where it's vapid and meaningless fine, but I don't see how "incentivise" is.

Though apparently it's not a real word, so I guess there's that. Stupid red squiggly lines.
1113 Euodiachloris22nd May 2014 03:35:15 AM from England (Oop North) , Relationship Status: Is that a kind of food?
Euo will do!
[up] "Incentive" and "incentivize" are greasy ones where you think you know what they mean. But, it's like "need". When you pin it down... it just keeps trying to wriggle away.

Motivation, after all, is a complex ball with a lot of factors involved. tongue But, this cheery word "incentivize" tries to boil it all down into a single thought and make it look... easy... to shift.

edited 22nd May '14 3:40:27 AM by Euodiachloris

"When all else failed, she tried being reasonable." ~ Pratchett, Johnny and the Bomb
1114 demarquis22nd May 2014 04:28:46 AM from Hell, USA , Relationship Status: Buried in snow, waiting for spring
Who Am I?
That's America. We use our nouns as verbs. Deal.
“Disobedience is the true foundation of liberty. The obedient must be slaves.”
1115 TheyCallMeTomu22nd May 2014 12:03:27 PM , Relationship Status: Wishfully thinking
Totes Moe
The concept of incentives is pretty key to Economics. You can't use the "but what does it MEAN" argument against incentivize unless you're willing to make the argument against the word incentive as well.
1116 PotatoesRock18th Jun 2014 01:16:42 AM , Relationship Status: I-It's not like I like you, or anything!
It's Mashin' Time
Many were increasingly of the opinion that they'd all made a big mistake in coming down from the trees in the first place. - Douglas Adams
1117 Greenmantle18th Jun 2014 01:51:14 AM from Greater Wessex, Britannia , Relationship Status: Hiding
Carrying On
From [up], what could be the effects of the Government(s) paying off/writing off mortgages early?

edited 18th Jun '14 1:51:35 AM by Greenmantle

"Britannia Rules the Waves (if only)"
1118 PotatoesRock18th Jun 2014 02:48:08 AM , Relationship Status: I-It's not like I like you, or anything!
It's Mashin' Time
What I gather the general Neo-Keynesian assumption is by freeing up loans (whether it be student debt or mortgage loans), it should free up household income, which should allow for at least necessities to be paid for, or if you're better off, allow you to buy luxuries you otherwise wouldn't of bought.

Basically reduction of debt should increase demand and potentially consumption, thus improving economic performance.

I'm not sure as to the counterargument, but I suspect the counterargument is it shoots confidence in the foot and makes the financial sector less likely to lend for anything.

Which strikes me as odd, as unless you have a moral objection to being paid by the government, any money is good money.

Though I think part of the financial sector's objection to such payments right now is so many loans are underwater, they'd be paid pennies on the dollars spent for the loans/mortgages in the first place, thus netting losses.
Many were increasingly of the opinion that they'd all made a big mistake in coming down from the trees in the first place. - Douglas Adams
1119 Fighteer18th Jun 2014 06:24:15 AM from the Time Vortex , Relationship Status: Dancing with Captain Jack Harkness
Geronimo!
You'd think that would be the primary argument, but no — amazingly the financial sector seems not to mind the idea of having debts (which might be at high risk for defaulting) paid off by the government instead of the debtor. Even if they're yelling about it behind closed doors, they've realized that it wouldn't make them look that good to the public.

Instead, the argument against debt relief is centered around "moral hazard": the idea that bailing out consumer debtors encourages them to take future risks — to be irresponsible with their money. That this concept was disregarded when the banks themselves got bailed out is quietly ignored.

edited 18th Jun '14 7:11:29 AM by Fighteer

1120 demarquis18th Jun 2014 07:17:35 AM from Hell, USA , Relationship Status: Buried in snow, waiting for spring
Who Am I?
The real reason, of course, is that they dont want the lower classes (or ethnic minorities) to be able to access tax money. The conservatives see that as redistribution of wealth, which they are against on principle.
“Disobedience is the true foundation of liberty. The obedient must be slaves.”
1121 Greenmantle18th Jun 2014 07:30:35 AM from Greater Wessex, Britannia , Relationship Status: Hiding
Carrying On
[up][up] I suspect the Banks don't care who pays off the debt, as long as it is paid off.

edited 18th Jun '14 7:30:46 AM by Greenmantle

"Britannia Rules the Waves (if only)"
1122 Fighteer18th Jun 2014 07:31:35 AM from the Time Vortex , Relationship Status: Dancing with Captain Jack Harkness
Geronimo!
What the banks desperately want to avoid is setting a precedent that consumers can be relieved by the government of bad loans without going through a process of default and/or bankruptcy. This poisons their ability to set any onerous terms and conditions they want and expect that the consumer will be beholden to them.

It threatens their power as absolute masters of their universe.

edited 18th Jun '14 7:32:40 AM by Fighteer

1123 TheyCallMeTomu18th Jun 2014 11:33:55 AM , Relationship Status: Wishfully thinking
Totes Moe
One thing against debt relief:

If there's one person buying up EVERYTHING, that one person has more bargaining power. Firms can prop themselves up with "book value" of assets; from an accounting standpoint, selling debts to the government makes the firm's books look worse.

So there are sooooome reasons why said firms might not want debt relief.
1124 Fighteer18th Jun 2014 11:38:41 AM from the Time Vortex , Relationship Status: Dancing with Captain Jack Harkness
Geronimo!
There are two primary reasons to be concerned with "book value" of assets: stock price/market valuation and the ability to borrow using your assets as collateral. Doing the latter (in complex ways, but it comes out to the same thing) is what crashed the markets in 2008.
1125 TheyCallMeTomu18th Jun 2014 12:05:53 PM , Relationship Status: Wishfully thinking
Totes Moe
I'm not saying they're RIGHT to oppose debt relief!

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