Krugman

Loretta Lynch And The Government War On Free Speech

A government that believes it can run our lives, run the economy, and run the world will inevitably come to believe it can, and should, have the power to silence its critics. Eliminating the welfare-warfare state is the key to protecting our free speech, and other liberties, from an authoritarian government.

Life And Times During The Great Depression

I thought the Depression was going to go on forever. For six or seven years, it didn’t look as though things were getting better. The people in Washington DC said they were, but ask the man on the road? He was hungry and his clothes were ragged and he didn’t have a job. He didn’t think things were picking up.”

Why This Sucker Is Going Down - The Case Of Japan's Busted Bond Market

The world financial system is booby-trapped with unprecedented anomalies, deformations and contradictions. It’s not remotely stable or safe at any speed, and most certainly not at the rate at which today’s robo-machines and fast money traders pivot, whirl, reverse and retrace. Indeed, every day there are new ructions in the casino that warn investors to get out of harm’s way with all deliberate speed. And last night’s eruption in the Japanese bond market was a doozy.

"There Is No Clear Way Out" - Richard Koo Says "The Price For QE Has Yet To Be Paid"

Recently, for example, the markets took a tumble when the Fed moved to normalize monetary policy. The US central bank responded by delaying the normalization process, which stabilized the markets, but eventually fears of falling behind the curve on inflation will force it to resume the process. That will lead to renewed market turmoil in a cycle that has the potential to repeat itself endlessly.

Keynes: How A Witch Doctor Convinced The World He's A Neurosurgeon

In the Middle Ages, no matter what ailed you, the doctor had one cure: attaching leeches to your body. Today, modern medicine has discredited leeches as a cure-all. We look back on it and laugh. “How could we have been so stupid?" Some things haven’t changed much. The average person is still willing to blindly accept conventional thinking—maybe even more so than he was in the past. Today, he hears the financial equivalent of “more leeches!” and agrees. Conventional wisdom and economic “experts” continually prescribe treatments that we will no doubt look back on and say, “How could we have been so stupid?”

Stephen Roach: "Central Banking Has Lost Its Way, Is In Crisis"

In what could well be a final act of desperation, central banks are abdicating effective control of the economies they have been entrusted to manage. First came zero interest rates, then quantitative easing, and now negative interest rates – one futile attempt begetting another. Just as the first two gambits failed to gain meaningful economic traction in chronically weak recoveries, the shift to negative rates will only compound the risks of financial instability and set the stage for the next crisis.

The Four Horsemen Of Economic Apocalypse Are Here

"...the economic patient is riddled with cancer - central banks are applying a defibrillator, but there's only so much electricity the patient can take before it becomes a burnt-out corpse."

As "Plan A" Fails, This Is What The Fed's "Plan B" Would Look Like

As you might have noticed, the Fed made a policy mistake in December. We could delve deeply into the specifics, but quite frankly it all boils down to this: Yellen hiked right into a recession. With the pressure mounting, and with Janet Yellen having failed (miserably) to reassure the market with her testimony on Capitol Hill earlier this month, what’s in the cards for the Fed if the situation (both in financial markets and in the real economy) continues to deteriorate?

Helicopter Money Arrives: Switzerland To Hand Out $2500 Monthly To All Citizens

With Citi's chief economist proclaiming "only helicopter money can save the world now," and the Bank of England pre-empting paradropping money concerns, it appears that Australia's largest investment bank's forecast that money-drops were 12-18 months away was too conservative. While The Finns consider a "basic monthly income" for the entire population, Swiss residents are to vote on a countrywide referendum about a radical plan to pay every single adult a guaranteed income of around $2500 per month, with authorities insisting that people will still want to find a job.

Brazil's Easy-Money Problem

Brazil’s current crisis is nothing but an outcome of government’s meddling with the market. The scenario of the country’s economy is indeed scary, but we have reason to believe that Brazil’s intellectual situation is going through a new and promising change. It may be true, as Lord Keynes said, that “in the long run we are all dead,” but if we are to get out of this terrible crisis, to prosper and to enjoy a constant improvement in our standard of living, “it is high time to transform the country’s state capitalism into a free market system.”

Capital Controls Are Coming

The carnage always comes by surprise, often on an otherwise ordinary Saturday morning... The government declares a surprise bank holiday. It shuts all the banks. It imposes capital controls to stop citizens from taking their money out of the country. At that point, the government is free to help itself to as much of the country’s wealth as it wants. It’s an all-you-can-steal buffet. This story has recently played out in Greece, Cyprus, Argentina, and Iceland. And those are only a few recent examples. It’s happened in scores of other countries throughout history. And we think it’s inevitable in the U.S.