Krugman

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The End Of Meaningful Work: A World Of Machines And Social Alienation





Many activists are clamoring for a higher minimum wage. That's an admirable goal, but is that where the worst problem is? Even at the abysmally low wages of the present moment, we still have 938,000 people being turned away from McDonald's because there aren't enough McJobs. The real problem is the lack of meaningful work. In a world of machines and social alienation, meaningful work is as scarce as water in the drought-stricken California Central Valley.

 
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This Is What Keynesian "Success" Looks Like: Soaring Part-Time Jobs, Record Low Real Wages





If that's "success", we would hate to see what Keynesian failure looks like.

 
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"The People" Vs. Piketty





We have rich people, poor people, right-wing economists, left-wing economists and even revolutionaries, all contesting Piketty’s argument. It seems we the People do have a point against him. But will it prevail? We’re not optimistic on this one. It is far more likely that Piketty's ideas will gain traction rather than fade away. Why? Because it gives politicians and their Keynesian consorts yet another framework and justification as to why the state should be the key allocator of resources in society.

 
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Will Austerity Be The Straw That Breaks The EU & The UK?





How this will not end badly and ugly is hard to see. As we quoted in an earlier article, the number of foodbanks in Britain went from 66 to 421 in the first 5 years of Cameron rule. How many more need to be added before people start setting cities on fire? Or even just: how much more needs to happen before the Scots have had enough? Very much like the Greeks, the Scots unambiguously voted down austerity. And in very much the same fashion, they face an entity that claims to be more powerful and insists on forcing more austerity down their throats anyway. It seems inevitable that at some point these larger entities will start to crack and break down into smaller pieces. As empires always do. Now, the EU was of course never an empire, there’s just tons of bureaucrats dreaming of that, and Britain is a long-decayed empire.

 
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Socialists, Central Banks & Credit Is Not Capital





As with all good socialists, central banks have locked the global economy onto but a single path without any possibility of choice. The purpose of all this intrusive nature through finance is actually to dethrone the defining quality that makes capitalism so useful in society’s advance – dynamic destruction. Despite the radical alteration as to what is taught in “business” schools, credit is not capital and it will never be. No amount of math will make it so, but the longer it remains operative the greater the potential we all end up with something even worse.

 
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The War On Cash: Transparently Totalitarian





"The War on Cash is the attempt by governments to phase cash out of their economies. Governments hate cash because they hate the financial privacy cash makes possible. And they prefer that you keep your money in a bank to help prop up an unsound fractional reserve banking system." As Ron Paul warned, “The cashless society is the IRS’s dream: total knowledge of, and control over, the finances of every single American.”

 
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Japan Retail Sales Plunge Most Ever On Base Effect, Widespread Economic Weakness





Overnight we got the latest proof that there is nothing worse for an economy than to be run by a bunch of central planning academics who get "advice" from Paul Krugman. The reason: Japan's retail sales which crashed by 9.7% Y/Y, the biggest annual drop in history. To be sure, the biggest reason for the annual drop was the base effect with the surge in demand last March ahead of the April 2014 consumption tax hike, but the drop was bigger than what consensus had expected, as expectations were for a -7.3% drop. And confirming that things are getting worse on a sequential basis as well, was the 1.9% drop in sales in March compared to a 0.7% increase in February. In fact, as the chart belows show, on an indexed basis, the March retail sales print was one of the worst since last year's tax hike.

 
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Stop The Presses: Nobel-Prize Winning Economist Slams QE





"An alternate, more sophisticated approach to explaining why QE may not work to stimulate aggregate consumption is, perhaps, because the demographic mix of the U.S. (and most parts of the developed world) has shifted toward older people. Unlike 30 or 40 years ago, the enormous baby boomer generation, and even retirees, are much wealthier (including human capital) than in the past, and they are wealthier than current generations earlier in their life cycle.  So the wealth effect does not lead to an increase in consumption and, potentially, has the opposite outcome."

- Robert Merton

 
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Did Greece Just Launch Capital Controls: "Mandatory Cash Transfer" Decreed Due To "Extremely Urgent Need"





We warned last week that capital controls were inevitable and it apears the first steps have been taken (very quietly):

*GREECE ISSUES DECREE: LOCAL GOVTS OBLIGED TO TRANSFER DEPOSIT RESERVES AT CENTRAL BANK

So, following the pension fund raid, the Greek government is now centralizing all Greek cash citing an extremely urgent and unforeseen need.". One wonders if this is Krugman's "advice."

 
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Central Bankers Next Test Of Omnipotence May Be Coming





Here we are, just barely into our first earnings season without the incessantly added fuel provided by QE and the markets are stumbling. At times on Friday the indexes were hovering near the possibility of posting 2% losses going into the weekend. In today’s media mindset of “everything is awesome.” That’s near – unthinkable. No Fed speaker saved the day; no HFT-induced ramp came to the rescue... Maybe it’s because all ammo (and there has been no silver bullet more powerful of late than a Central Banker press conference) is being reserved for a much larger crisis looming on the horizon (i.e. Greece and all its tenuous implications calling for an “All hands on printing presses deck, battle stations” response).

 
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The Science-Fictional Foundation Under Paul Krugman - Part 2





In his recidivist attacks on the gold standard Prof. Krugman tediously resurrects and refutes straw man arguments drawn from marginal thinkers. Prof. Krugman sets his phaser on stun and points it at the ghost of Ayn Rand rather than tangling with his peers. But boiled to its essence, Krugman's sciencefictiononomics is a tug of war between believers in mathematical modeling and believers in common sense. One also can cast this as a war between elitists (i.e believers in the ability of an elite to manage society’s affairs better than can the society itself) and populists (i.e. believers in the ability of society to manage its own affairs better than an elite can do so for it).

 
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The Science-Fictional Foundation Under Paul Krugman - Part 1





Although rarely cast as such this is a “War of the Worldviews” in the political and policy sector. This war is about the nature of reality. This war, not mere partisanship, is an underlying cause of political gridlock, at least for economic policy. Paul Krugman long ago left the twilight zone of Neo-Keynesianism to boldly go where no man has gone before. There isn’t a better “sciencefictionomist” than Prof. Krugman. That said, a coin has two sides. Sciencefictionomics has far from won its war on common sense.

 
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IMF Says Bernanke Is Wrong On Secular Stagnation





In a new study, the IMF asks whether there's a global slump in real private investment (spoiler alert: yes there is and it's broad-based and endemic in advanced economies) and also suggests that productivity growth across the globe is likely to remain constrained for the foreseeable future.

 
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Guest Post: Russia's Central Bank Governor Is Way Smarter Than Ours





It wouldn’t be a first, but it would certainly be a – bigger – shock. That is to say, the Bank of England hijacked the head of Canada’s central bank some time ago, but, while unexpected enough, that would pale in comparison to the US hiring the present razor sharp and fiercely independent Governor of the Russian central bank, Elvira Sakhipzadovna Nabiullina. It would still seem to be a mighty fine idea, though. Not that we think it will happen. Yellen is obviously neither; she’s a cog in a machine that huffs and puffs and pumps and dumps to make sure her overlords in the blissful world of US finance make ever more profit no matter how bad things get in American society.

 
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Japan Admits Fabricating 2014 Wage Growth Data





At this point calling Japan a failed Keynesian banana republic is an insult to banana republics everywhere.

 
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