Krugman, Who Is Paid $25,000/Month To Study Inequality, Says "Nobody Wants Us To Become Cuba"

Tyler Durden's picture




 

When it comes to Krugman's views on any particular topic, he may be right and he may be wrong, but whatever his opinion he always has a much to say about it (even if the factual backing is of secondary importance or outright missing). Today, his chosen topic is inequality, and in an interview with Bloomberg's Tom Keene, shown and transcribed below, he certainly says much, encapsulated perhaps by the following gem:

"There's zero evidence that the kind of extreme inequality that we have is good for economic growth. In fact, there's a lot of evidence that it is actually bad for economic growth. Nobody wants us to become Cuba. The question is, do we have to have levels of inequality that are getting close to being the highest levels ever anywhere. We're really starting to set new records here. Is that a good thing for anybody? If you look at our own history, it's not true. The fact of the matter is since inequality began soaring around 1980, the bottom half of America has been pretty much left behind. It has not been a rising tide that raised all boats."

Ah yes, inequality, the same inequality that the Fed - Krugman's favorite monetary stimulus machine, after all it was none other than Krugman who suggested that in order to offset the bursting of the tech bubble the Fed should create the housing bubble - has been creating at an unprecedented pace since it launched QE. Just recall: "The "Massive Gift" That Keeps On Giving: How QE Boosted Inequality To Levels Surpassing The Great Depression."

So while Krugman is right in lamenting the record surge in class divide between the 1% haves and the 99% have nots, you certainly won't find him touching with a ten foot pole the root cause of America's current surge in inequality.

And, tangentially, another thing you won't find him touching, is yesterday's revelation by Gawker that the Nobel laureate is the proud recipient of $25,000 per month from CUNY to... study inequality.

From Gawker:

According to a formal offer letter obtained under New York’s Freedom of Information Law, CUNY intends to pay Krugman $225,000, or $25,000 per month (over two semesters), to “play a modest role in our public events” and “contribute to the build-up” of a new “inequality initiative.” It is not clear, and neither CUNY nor Krugman was able to explain, what “contribute to the build-up” entails.

 

It’s certainly not teaching. “You will not be expected to teach or supervise students,” the letter informs Professor Krugman, who replies: “I admit that I had to read it several times to be clear ... it’s remarkably generous.” (After his first year, Krugman will be required to host a single seminar.)

 

 

CUNY, which is publicly funded, pays adjunct professors approximately $3,000 per course. The annual salaries of tenured (but undistinguished) professors, meanwhile, top out at $116,364, according to the most recent salary schedule negotiated by the university system’s faculty union. And those professors are expected to teach and publish. Even David Petraeus, whom CUNY initially offered $150,000, conducted a weekly 3-hour seminar.

 

Along with the offer letter, CUNY released dozens of emails between Krugman and university officials. “Perhaps I’m being premature or forward,” the Graduate Center’s President, Chase Robinson, tells Krugman in one of them, “but I wanted you to have no doubt that we can provide not just a platform for public interventions and a stimulating academic community­—especially, as you will know, because of our investments in the study of inequality—but also a relatively comfortable perch.”

 

Which is undeniably true: $225,000 is more than quadruple New York City’s median household income.

Surely, and in keeping with this very vocal beliefs, the good professor
will promptly donate the $225,000 in annual income reserved to help the problem of inequality to a needy charty
catering to the poor, at the first opportunity.

Or not. After all, nobody wants us to become like Cuba, eh?

The full Bloomberg interview below:

And the transcript of the key highlights:

Krugman on dangerous slack in Economy:

"If people are unemployed for long enough, they may never get back into the workforce. If investment is depressed long enough, we never build the capacity. So if you think there is a lot of slack or even if you think that there might be a lot of slack in the US economy, then that should be a tremendous preoccupation. We've got to get rid of that. We need to get this economy back to something like full employment. It becomes the most urgent priority we have right now."

Krugman on Japan vs. Europe:

"I have to say, when the Europeans say we're not Japan, I agree. Japan was never in as dire straits as Europe is right now. They never had the mass unemployment. There was never a part of Japan that looked like Spain or Greece does in Europe right now. So their notion that they are somehow doing better than Japan, they are doing worse than Japan ever did."

Krugman on current economic conditions:

"We should be vastly impatient. This has gone on. If you had said in 2007, that more than 6 years after a recession begins, we would still be talking about an economy with high unemployment, sluggish job growth, there hasn't been a single month, that I can remember, where we've created as many jobs as we did during an average year during the Clinton administration. This is crazy. The idea that this should be regarded as an acceptable pace of progress is just really, really wrong."

Krugman on inequality:

"There's zero evidence that the kind of extreme inequality that we have is good for economic growth. In fact, there's a lot of evidence that it is actually bad for economic growth. Nobody wants us to become Cuba. The question is, do we have to have levels of inequality that are getting close to being the highest levels ever anywhere. We're really starting to set new records here. Is that a good thing for anybody? If you look at our own history, it's not true. The fact of the matter is since inequality began soaring around 1980, the bottom half of America has been pretty much left behind. It has not been a rising tide that raised all boats."

Krugman on how income inequality gets solved:

"American history is actually very encouraging because in America, we often had leadership, we had often people from the affluent classes themselves who said this is too much. If we could have modern politicians speaking as forthrightly about the danger of high concentration of wealth as Teddy Roosevelt did in 1910, we would be a long way towards having a good solution to this. I guess I believe that America has a tremendous redemptive capacity, an ability to take a look and say, in the end, what our ideals, what do we want society to look like, an ability to step back. We don't have to become this oligarchy that unfortunately we are drifting towards."

Krugman on whether we are living in a gilded age:

"It's more than that. We're at gilded age level of inequality and beyond. It's a belle epoque as Pikkety says. It's an era not just of great inequality but increasingly of inherited inequality and I think if people understand that they'll say nope, we don't want that to happen and we can do things that are not Draconian, that are not socialist in the American tradition to limit that rise in inequality."

Krugman on Obamacare and Obama:

"At this point, Obamacare looks like it is a success. It's not the program anyone would have designed from scratch but it is a huge improvement for American lives and just having that legacy plus the somewhat weaker but still important legacy of financial reform, Obama is one of our most consequential presidents. You have FDR, LBJ, Ronald Reagan and Barack Obama as presidents who left America quite a different place once they were done."

Krugman on the basic problem with the US Economy:

"The basic problem with the US economy is that there are not enough jobs. And then, given that, employers get to be picky. Who would they want to offer a job? Preferably somebody who already has one or who lost a job only recently so the long-term unemployed get ruled out."

Krugman on whether he has seen long term unemployment like this ever in his career:

"No, we know that there's been nothing like this since the 1930s. This is a completely new thing for almost everybody. People who remember this were children when they saw it…There are many things I'm angry about but that's certainly one of them. We have millions of people who have just been ruled out of the discussion but we can try to do things to make them more employable but we really just need more jobs. So that employers have an incentive to go out and look for qualified people even if they aren't people who already have jobs."

Krugman on proper level of growth that we need to begin solving our labor challenges:

"Well I'm of the belief that we have slack in the economy. Best guess, and we don't know this for sure but I think we still have 5 or 6% slack in the economy and we should be taking it up fast. We should be growing -- we are that deep in the whole that we should be growing several points above the long run growth rate. So we should be having 4 or 5% economic growth at this point. So when we look and we say oh great, we're doing 2.5%, that's just showing how far we've become accustomed to -- how used to really dismal economic conditions."

Krugman on Government and Wall Street:

"Government has shaped the form of markets all the time. There's no law of nature that says that people have to be free to build a new fiber optic cable that allows them to be 3 milliseconds ahead of the rest of the market. This is stuff that certainly could be regulated. There's actually two things. One is, the market being too perfect is actually undermining the work of discovering useful knowledge and the other is, you are spending a lot of your sources on stuff that is of zero social benefit."

Krugman on whether there is a lack of confidence in our financial system because 'the smart guys have too much information':

"I think there's not enough skepticism. Our financial sector has gotten way bigger and more concentrated. It has grown from 4% to 8% of GDP and it is not at all clear what society is gaining from that. I think if anything, the general public is too willing to take Wall Street at face value as actually performing a useful service."

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Thu, 04/17/2014 - 13:39 | 4670099 Fuh Querada
Fuh Querada's picture

CUNY - the last letter begs to be substituted

Thu, 04/17/2014 - 13:42 | 4670107 NotApplicable
NotApplicable's picture

Well, this ruined what was a perfectly good lunch.

Thu, 04/17/2014 - 13:43 | 4670114 fonestar
fonestar's picture

KRUGMAND!!!!!!!!!!!!

Thu, 04/17/2014 - 13:46 | 4670125 nope-1004
nope-1004's picture

"I am too smart to comment or be questioned.  Just trust me."

 

 

Thu, 04/17/2014 - 14:02 | 4670177 Anusocracy
Anusocracy's picture

Pay the asshole in Zimbabwean Dollars.

Thu, 04/17/2014 - 14:36 | 4670320 BTFDemocracy
BTFDemocracy's picture

I got $50 trillion Zimbabwe dollar bill sitting in my back pocket.... like all ZH'ers should.. to show people what inflation means, during argument.

P.S. I got the $50 trillion as unrequested 'extra' when ordering my $100 Trillion Zim bill.. as apology for it being 10 days late in mail; to compensate for inflation.

Thu, 04/17/2014 - 14:52 | 4670395 NoDebt
NoDebt's picture

"Inequality"- Democratic platform #1 in the 2014 elections.

You really think they want him for any other reason?  This is a political appointment by proxy.

Thu, 04/17/2014 - 15:14 | 4670484 James_Cole
James_Cole's picture

Not a fan of the guy but file this under not a big deal. Moderately more than not-famous-at-all folks get at lots of universities for doing an equal non amount of teaching. Not a great indicator of priority spending at universities, but that's part of the shit-a-fying / raping of post secondary ed. 

Oh, he was doing it for something to do with inequality. gahh hisss moaaannnnnn Seriously people, 225k? Get over it. 

Thu, 04/17/2014 - 15:27 | 4670538 Telemakhos
Telemakhos's picture

The funny part is that his salary would hire twelve "contingent labor" instructors ("professors of the practice" or "visiting associate professors" or whatever new label is being attached to no-tenure, low-wage jobs that even Ivy League PhD's, at least the ones whose dissertation advisors were insufficiently well-connected to help them find positions, are now desperate to take in order to sustain the fantasy of remaining on a higher academia career path).  Those would probably be teaching-only positions with no chance of research funding, and in NY you probably couldn't live on that without a second job or, for the lucky, inherited income.  Krugman earns twelve times that amount to do no teaching, just research, most of which leads to high-paying speaking engagements and lucrative book deals, all about "inequality."  This is why Johnny gets a shitty education in today's "higher academia" and why none of his instructors are actually professors, just TAs and recent PhDs with no realistic chance of ever becoming a professor.

Thu, 04/17/2014 - 15:45 | 4670616 New England Patriot
New England Patriot's picture

How can you spend your entire professional life thinking about a school of thought which makes no sense?

Seems like a recipe for a headache.

 

Thu, 04/17/2014 - 19:25 | 4671270 weburke
weburke's picture

cuba, does he not know that castro gets to put medals on the chest of the head of the knights of malta? the queens cousin no less !

Thu, 04/17/2014 - 23:06 | 4671983 knukles
knukles's picture

I'm crushed.  All day I was working, as in gnawing my fingers to the bone, striving to make enough to pay Uncle Sam, only to find a Paul Krugman Article from Hours Past.
So I am Compelled to simply say;

FUCK PAUL KRUGMAN 

Thu, 04/17/2014 - 20:18 | 4671460 TheReplacement
TheReplacement's picture

Those who cannot do, teach.

Thu, 04/17/2014 - 22:49 | 4671944 willwork4food
willwork4food's picture

KRUG. What.a piece.of.shit.

Fri, 04/18/2014 - 06:45 | 4672427 Not Goldman Sachs
Not Goldman Sachs's picture

that's the business model, pretty sheety, just like these phucking ads

Thu, 04/17/2014 - 16:04 | 4670694 A Nanny Moose
A Nanny Moose's picture

Ad Populum. But you are in a sense, correct. Just file this under, Edewkayshun - another gummint program.

Another example of why we should end The State.

Thu, 04/17/2014 - 20:26 | 4671480 TheReplacement
TheReplacement's picture

We can't realistically end the state (if by The State you mean TPTB then yeah).  There are too many genies out of the bottle and they won't go back in.  Our founding fathers recognized the need for organization.  They also defined limits.  What we the people need to do is realize this is our country, not TPTB's and take it back.  We need to strictly enforce the limits of government as set forth in the Constitution.  We need to set forth further limits on government such as term limits across the board, only people are people, only citizens are legal and may stay, no foreign entity may own real estate or associated rights within our borders, yada, yada..   To not do so will lead to our deaths.  We must be the change we are waiting for.  (That's actually a pretty good statement despite the originator's character).

 

Thu, 04/17/2014 - 20:16 | 4671454 TheReplacement
TheReplacement's picture

I don't always agree with James_Cole but when he has a point he has a point.  This instance is just a poster child for what goes on at American universities.  It is disgusting but it is not unusual.  Why are you complaining now about Kruginator when you have not said anything about the whackadoodles teaching in your state or locality?

Specifically about Krugtron, he seems to be calling for more drastic measures while also giving cautious criticism to Obama's handling of the economy.  I think he is starting to set the table for the next chapter and that chapter probably doesn't end with Obama in charge.  I also think he uses certain wording to hedge his bets in case the force that kicks Obama out is not Valerie Jarrett but the citizens of the country.

I also believe his modesty in the correspondence is the definition of fascade.

Thu, 04/17/2014 - 15:01 | 4670417 smlbizman
smlbizman's picture

is that you billy joe

http://www.youtube.com/watch?v=F4fKnWxq7Lo

if you need a smile today this 2 minute clip will give it to you

Thu, 04/17/2014 - 18:17 | 4670642 malek
malek's picture

Often too late to do so.

I put a $50 trillon Zdollar bill in the birthday cards of my close friends children when they turn 9 or 10...
When asked, I explain "yes that is (now: was) real money! But unfortunately you can only buy one chewing gum <or insert favorite small item here> with it."

That gives them something to think about, when they grow up and contemplate over absolute and relative "values."

Thu, 04/17/2014 - 14:03 | 4670179 maskone909
maskone909's picture

this article reminds me i need to go buy some more krugerands

however silver is looking realllllly good rightnow.  maybe some more NTR 10 oz bars instead

Thu, 04/17/2014 - 14:30 | 4670295 Crash Overide
Crash Overide's picture

Krugman is a fucking asshole, someone should kick him in the balls for all the pain he has caused with his keynesian dribble.

Thu, 04/17/2014 - 14:34 | 4670311 stormsailor
stormsailor's picture

that is such an insult to normal everyday assholes

Thu, 04/17/2014 - 16:05 | 4670699 mrdenis
mrdenis's picture

This is such a insult to MY azzhole .....

Thu, 04/17/2014 - 16:11 | 4670715 A Nanny Moose
A Nanny Moose's picture

You presume he has any balls to be kicked. He's a typicial emasculated, smug, neo-liberal academic, economic high priest to the religion of Statism.

Kruggybear is just a useful Appeal to Authority for statists everywhere.

Thu, 04/17/2014 - 20:28 | 4671482 Ifigenia
Ifigenia's picture

This zio-jew Krugman and many others from wall street attack euro in 2010, spreading rumour of it demise. 4 years later, euro is till working and what those zio-jews want? Soros is already preaching QE for Euro zone, just like in Japan or USA under Bernake.

 

What i felt shocked was the media in my country just publishing those vampires nonsenses, it open my eyes that media in my country is controlled by those banksters and their kins.

Thu, 04/17/2014 - 13:42 | 4670110 caustixoid
caustixoid's picture

Indeed.  "Sad little fuck settles into cun_".

Enjoy him getting questioned on the hypocrisy.  He gets pretty testy when called out.

Thu, 04/17/2014 - 16:13 | 4670730 A Nanny Moose
A Nanny Moose's picture

Seems the acronym was short an "N"

Thu, 04/17/2014 - 14:00 | 4670171 caShOnlY
caShOnlY's picture

fuck you KRUGTURD!!

Thu, 04/17/2014 - 13:41 | 4670105 JohnFrodo
JohnFrodo's picture

One of the most brilliant Economists of his time only charges $25,000 a month. He is a true Kensyian.

Thu, 04/17/2014 - 13:46 | 4670127 Confused
Confused's picture

The pay he receives is rather ironic, considering the focus of the study, as it is roughly half (or more than half) the average American salary for people who are actually productive

 

 

Thu, 04/17/2014 - 14:03 | 4670181 fonzannoon
fonzannoon's picture

Anyone else out there noticing today that agricultural and energy is ripping (even) higher, the 10yr is selling off much more than PIIG bonds and yet gold is s a dud? The inflationary winds are blowing pretty damn hard right out in the open lately. Werid.

Thu, 04/17/2014 - 14:10 | 4670206 Grande Tetons
Grande Tetons's picture

Coffee up 7 percent.  A shitty coffee at Starbucks will cost 6 bucks next week. 

Thu, 04/17/2014 - 14:13 | 4670222 fonzannoon
fonzannoon's picture

I wish Tyler would stop humping Ukraine's leg for 5 minutes and pay attention to what is going on in these commodity markets and the U.S 10yr. 

The ballsack on this dude Yellen to claim that inflation is under 2%.....amazing

Thu, 04/17/2014 - 14:19 | 4670250 Grande Tetons
Grande Tetons's picture

Even Johnny lunchbucket is calling bullshit.  He has no idea of the Fed's 2 percent target or who the fuck this Yellen guy is...but he knows he is paying more to survive and earning the same or less. 

The cheap Ipad and plasma TV will not cut it for much longer. 

Thu, 04/17/2014 - 14:21 | 4670261 fonzannoon
fonzannoon's picture

agreed, but is Johnny's lunchbucket going to start shorting treasuries and dumping his bond funds and send the long end parabolic? Or is he going to just kick the lunchbucket? Interesting from this mornings market wrap btw.

In Japan, there is again some focus on the Government Pension Investment Fund, after the head of the GPIF advisory panel advocated that the fund should sell down longer dated JGBs and increase its allocation to equities in the coming months. 

Thu, 04/17/2014 - 14:28 | 4670288 Grande Tetons
Grande Tetons's picture

Japan shuuld be interesting..they have..in a half assed way..telegrpahed a surprise increase to their balance sheet.  

No sarc. I am thinking of dropping a couple of grand on ass wipe and coffee.  

Wanna wipe your ass? You gottah go through me first. 

Have a good one. I am outtah here. 

Thu, 04/17/2014 - 13:43 | 4670106 LawsofPhysics
LawsofPhysics's picture

And so the hypocrisy is complete.  The "academic" who is against wealth ineqality constant promotes a monetary system whereby a chosen few print money and hand it out to their friends...

 

Again, execute these useless fucking paper-pushers, nothing changes otherwise.

Unlike the French revolution, we have an excellent digital and paper trail of their crimes...

let us be entertained!!!

Thu, 04/17/2014 - 13:57 | 4670162 magnetosphere
magnetosphere's picture

careful what you wish for.  maximilien robespierre was guillotined

Thu, 04/17/2014 - 16:22 | 4670697 LawsofPhysics
LawsofPhysics's picture

No risk, no reward.

 

The issue is about bullshit, as in stop bullshitting me.  If you have a corrupt and chaotic society, at least you know what to prepare for and as strange as it sounds, that imparts a certain stability.

Don't piss down my back and tell me it's raining or keep changing the rules for me, but not yourself. 

Thu, 04/17/2014 - 16:32 | 4670802 A Nanny Moose
A Nanny Moose's picture

Says the one who, interpreted the comments of another ZH'er as calling for bloody revolution just last night, derided the other ZH'er for it.

You can do whatever you like, so long as you do not fire the first shot. That would violate the nonaggression principle. I might suggest that refusal to participate is more appropriate.

 

Thu, 04/17/2014 - 13:43 | 4670111 Skin666
Skin666's picture

Ahhhhhhhhhhhh Champagne Socialists! The ultimate hypocrites

Thu, 04/17/2014 - 13:43 | 4670112 icanhasbailout
icanhasbailout's picture

Always flush after you Krugman.

Thu, 04/17/2014 - 13:46 | 4670128 Grande Tetons
Grande Tetons's picture

Do not forget to wipe your Bernanke. 

Thu, 04/17/2014 - 13:50 | 4670138 SilverIsKing
SilverIsKing's picture

You don't need to wipe your Bernanke if you took a Golden Yellen.  In that case, you just need to shake your Holder.

Thu, 04/17/2014 - 17:58 | 4671018 maskone909
maskone909's picture

haha damn u guys can put a smile on my face.... the same thing that will make you laugh will make you cry

Thu, 04/17/2014 - 13:44 | 4670115 Spitzer
Spitzer's picture

Please... Just don't even...

 

Thu, 04/17/2014 - 13:44 | 4670116 kevinearick
kevinearick's picture

Wasting Assets in Zombieland

That’s it, park the truck in the back forty, watch it rust, and book it as an inflating asset.

Securitization is writing a bad check to cover the last bad check; that’s it.

Does Putin have a 100% approval rating yet? Why can’t poor Mr. Lee seem to fix those elevators, no matter how much money he throws at them? Do you want to be the elderly and disabled?

Here in the hinterland, where best big city practice is most obvious, the real estate agency scoops up the property for next to nothing, kicks the tenants out, and brings in its contractors, who ‘work’ for six months doing 2 weeks of work, booking it as an asset draw on a wasting asset, which cannot be rented because the rent is now too high, unless it goes into the so-subsidized public housing stock, bad checks all around. Keep up the good work. Rental demand is high the slumlords say, as you walk by all their dead inventory.

What did the Clintons actually accomplish with those free trade agreements, other than expensive make-work for themselves? What exactly are the critters in big cities, where all the votes are counted, accomplishing?

Do you suppose there is some relationship between the behavior of Africans and the inability of empires to subdue them profitably?

Your product is not as valuable as your skill, which is not as valuable as your talent, which is not as valuable as your DNA.

Electricity is time, and time is electricity, heat transport between switches. The speed of light is a limit of the instrument, not of the universe.

You might want to re-think a bait and swap war against the 1%, which does not book its gains in stupid bad checks. Build your army just as big as you like. Separation of power is and always has been a myth. A judge is a politician in a robe; that’s it.

Keep writing bad checks, faster and faster, wondering why no one with any talent shows up for the game. Real Estate is like the Wheel of Fortune, in that the real value of the prize is not worth the arbitrary tax against it.

NPV depends upon the ongoing assumption, which depends upon having children, productive children in particular. Wages at 2X rent works out great for single people parading around in civil marriages, until it doesn’t. The computers just make it easier to boil the frog.

Manhattan is a government grant, something for nothing. Magicians.

Thu, 04/17/2014 - 13:57 | 4670164 NotApplicable
NotApplicable's picture

"The basic problem with the US economy is that there are not enough jobs."

Gee, ya think? Maybe someone needs to point out to him that captialism starts with the word "capital?" Kind of hard to have any sustainable demand given the impossibility of saving in ZIRP World.

I'd like to think that the whole world sees through his blatantly idiotic bullshit. Then I go read comments on other websites and think...

Is it beer-thirty yet?

Thu, 04/17/2014 - 14:01 | 4670174 PiratePiggy
PiratePiggy's picture

How do we solve that problem? What is the magic a mix of more illegal aliens combined with a higher minumum wage seasoned with more money printing that gets the job done?   lol

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