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What Would Fed Chairman Krugman Do?

Tyler Durden's picture


Steven Englander of Citi invokes 'String theory' to open the door to multiple universes, and in one of them Paul Krugman is undoubtedly Fed Chairman. Since the EUR is so dormant in this universe it may be interesting to expand our Strategy efforts to other, possibly more interesting, ones.

Start with the assumption that a Paul Krugman Fed would advocate strong fiscal and monetary measures and tolerate a significant run-up in inflation. At the end of the note I attach some links and some quotes which support this Krugman Fed view.

The question is how the USD would respond in this world. The first instinct is to say that the USD would be a lot weaker and that would undoubtedly be the first market reaction. There is enough suspicion about the US fiscal and monetary policy framework that additional fiscal and monetary easing combined with higher inflation are unlikely to allay.

Now consider some of the options – again multiple universes are helpful. The question is whether the ‘no holds bar’ stimulus measures could succeed in reducing unemployment. The Krugman view is that in the presence of excess capacity, fiscal policy is both justified and effective.  He argues that it is effective unconditionally and especially if the Fed is accommodating the fiscal stimulus.

The case for higher inflation is more controversial. Krugman makes the case that higher inflation would erode debt burdens, basically forcing haircuts on creditors.  So the needed balance sheet adjustment and reduction in real debt burdens would be accomplished quickly. And if the headwinds that the US economy faces is related to these balance sheet issues, full employment could be achieved and growth would be restored to trend.

My presumption is that the Krugman Fed would cooperate by financing the fiscal expansion, allowing government spending or (or in a very strange Republican Krugman parallel universe) tax cuts to have a real impact without affecting government debt. He makes a strong distinction between pumping liquidity into the banking system and directly into the real economy. In conventional terms,  this is Financial Repression 101, but inflation is desired, achieved and beneficial.

As a footnote there is an interesting parallel with Keynes’ 1930s argument that higher inflation was then needed to reduce real wages uniformly and efficiently. To a first approximation all workers take the same inflation hit. Efficiency is achieved because worker-by-worker negotiation is avoided.  A similar argument can be made with respect to the current need for creditor haircuts and the issues with one-by-one debt write-downs.

As a second footnote, the difference between Krugman Fed inflation and 1970s stagflation is that the Krugman inflation would have a real effect by reducing the real debt burdens, whereas the 1970s inflation in retrospect was doomed to fail because policymakers were trying to hit an employment target that was unachievable without constantly accelerating inflation.

The Krugman Fed (or maybe its successor Plosser Fed) would presumably revert to a lower inflation path once real debt burdens were cut, and full employment and trend growth achieved.  The low inflation path would be credible once the benefits from higher inflation disappeared. Put another way, what is needed is not permanently higher inflation, but a one-off step-up in wages and home prices relative to debt burdens, so the burdens can be more easily serviced. Once this is accomplished, inflation can return to a low level.

There are two downsides here. One is that the policies might not succeed. Plenty of economies have tried to spend and print their way to prosperity and the track record is not encouraging. In fact, if it worked, everyone would do it.  The argument in its favor is that real debt reduction would help resolve some of the headwinds facing the US economy.

The second negative is the Fed loss of credibility. Even if the Fed were able to convince investors that they would head back to the 2% inflation target, behavior might change because households, governments, corporations – in fact, everyone but savers – would come to see the Fed as the Tooth Fairy who fixes all wrongs.  Savers might demand permanently higher real rates on the view that inflation haircuts had been permanently added to the policy arsenal.

As Krugman points out there is a cost to an extended period of long-term unemployment. The bottom line is that unless you make low inflation a canonical virtue, you have to compare the long-term losses from lower credibility (if they exist) against the long-term gains from moving to full employment quicker (if they exist).

We took a long detour but now arrive at FX.   The potential Krugman Fed outcomes are:

1)    Full court press fiscal and monetary policies succeed, we get back to full employment and the Fed regains its virtue and shifts back to low inflation.


In this case we would see the USD as having a sharp and immediate real and nominal depreciation. This may be viewed as desirable by the Krugman Fed (who would suggest to other central banks with sluggish economies that they similarly inflate if they don’t like the currency outcome.) If the central bank is telling fixed income investors that they will face a significant haircut, foreign investors will likely impose a sharp cut in the price of US assets via the exchange rate.


However, if the policy succeeds, it means that eventually US policy rates can be normalized relatively quickly.  So the acute depreciation could eventually be followed by a USD rebound, especially if other countries were still facing headwinds that their policies had not addressed. It is probably the case that real USD would be stronger in real terms and weaker in nominal terms, but USD in a full-employment, normalized real rate environment would be a very attractive asset.


A major  downside risk is that the initial USD depreciation  generates a round of global capital controls that disrupt both economies and financial markets.


2)    Same as 1) but high inflation is stickier and becomes a permanent or semi-permanent factor.


Same as 1) but the USD rebound is less pronounced (and possibly nonexistent) in nominal terms, as the ongoing inflation discourages both domestic and foreign investment. Long-term higher inflation will probably be a negative for growth, so there would be an additional risk premium on both nominal and real USD.


3)    The policies fail - Weimar Republic


We can contrast with the potential USD outcomes from the current policy regime:

1)    Low inflation, stagnant growth and constant debate on whether additional the banking system will be forcefed additional reserves.


Continued battle between chronic risk of additional stimulus and the headwinds faced by other economies.  Foreign investors would prefer to sell USD in this environment because they see little exit from easy money and easy fiscal policies (a very dampened version of their reaction to the Krugman Fed) but are conscious of the tail risk associated with the EUR and the sensitivity of EM to the global business cycle. So we cycle between episodes of USD buying on safe haven concerns, and selling when risk appetite is restored.


2)    A Bernanke Fed that succeeds in gradually returning to full employment.


Virtue rewarded.  The USD rallies sharply in nominal and real terms as soon as there is any realistic prospect that the Fed will pursue its exit strategy and fiscal imbalances contract.

We leave it to you to weight the probabilities of these outcomes.


Links to recent Paul Krugman posts and selected quotes.

higher expected inflation would aid an economy up against the zero lower bound, because it would help persuade investors and businesses alike that sitting on cash is a bad idea.”

would a rise in inflation to 3 percent or even 4 percent be a terrible thing? On the contrary, it would almost surely help the economy.”

“Modest inflation would, however, reduce that overhang — by eroding the real value of that debt — and help promote the private-sector recovery we need”

“And now the results are in: Keynesians have been completely right, Austerians utterly wrong — at vast human cost.”


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Thu, 04/26/2012 - 15:41 | 2377730 SilverTree
SilverTree's picture




Thu, 04/26/2012 - 15:42 | 2377756 battle axe
battle axe's picture

There is not enough paper on the planet for him to print $$$$, he  would wipe out all the  forests.

Thu, 04/26/2012 - 15:44 | 2377775 SilverTree
SilverTree's picture


Thu, 04/26/2012 - 15:59 | 2377825 resurger
resurger's picture

you owe me Millinillion $103003

Thu, 04/26/2012 - 16:10 | 2377863 MillionDollarBonus_
MillionDollarBonus_'s picture

Dr Paul Krugman is one of the most learned and influential intellectuals of our time. Sure, his views are radical to some. But this is the price one must pay to be virtuous in an ignorant and hateful society that lacks the maturity to think objectively on sensitive topics like "inflation" and "unemployment". I admire Dr Krugman’s stoicism in the face of the appalling verbal abuse he has received from libertarians and rednecks with no sense of courtesy, rationality, ethics or economic knowledge. Paul Krugman, Ben Bernanke, Timothy Geithner and Hank Paulson are modern-day founding fathers and will go down in history as the most successful economic planners of their time. They have succeeded in averting a double dip recession, and creating growth where none thought it possible, and our children will be ashamed that their elders treated these economists with such contempt.

Thu, 04/26/2012 - 16:11 | 2377877 magpie
magpie's picture

Indeed. In History, great men like him enable the institution of gold standards in the first place...

Tue, 05/01/2012 - 12:36 | 2388513 Leopold B. Scotch
Leopold B. Scotch's picture

Modern day founding fathers!!!!!  Toooooooo Rich.

What's the word for milk coming out of your nose from gut busting laughter, at the same time you're shitting yourself in disbelief?

Thu, 04/26/2012 - 16:12 | 2377887 SilverTree
SilverTree's picture



We love to hate you and hate to love you.

Thu, 04/26/2012 - 20:41 | 2378775 BeetleBailey
BeetleBailey's picture

It's hard to resist not liking the turd, ain't it?

Fri, 04/27/2012 - 08:54 | 2379747 Element
Element's picture

Ambivalence (noun) : mixed feelings or emotions [syn: ambivalency]  The coexistence of opposing attitudes or feelings (such as love and hate) towards a person, object or idea.

Extensive Definition
Ambivalence - a state of having emotions of both positive and negative valence or of having thoughts or actions in contradiction with each other, when they are related to the same object, idea or person (for example, feeling both love and hatred for someone or something). The term is also commonly used to refer to situations where 'mixed feelings' of a more general sort are experienced or where a person experiences uncertainty or indecisiveness concerning something.

Ambivalence in psychoanalysis
In psychoanalytic terminology, however, a more refined definition applies: the term (introduced into the discipline by Bleuler in 1911), refers to an underlying emotional attitude in which the co-existing contradictory impulses (usually love and hate) derive from a common source and are thus held to be interdependent.

Another relevant distinction is that whereas the psychoanalytic notion of 'ambivalence' sees it as engendered by all neurotic conflict, a person's everyday 'mixed feelings' may easily be based on a quite realistic assessment of the imperfect, inconsistent or self-contradictory nature of the thing being considered.


i.e.  not altogether unlike the process of getting a leg-over with the wife.

Thu, 04/26/2012 - 16:17 | 2377902 yogibear
yogibear's picture

Krugman is the Adolf Hiter of Keynesian economics.

Thu, 04/26/2012 - 16:18 | 2377907 Clueless Economist
Clueless Economist's picture

Thanks MDB, I agree completely.

--P. Krugman


NY Times writer



Ivy Leaguer

All-Around douchebag

Thu, 04/26/2012 - 16:27 | 2377944 fuu
fuu's picture

I gave you a +1 only for "All-Around douchebag". Most accurate thing you've ever said Kruggie.

Thu, 04/26/2012 - 16:43 | 2377951 njdoo7
njdoo7's picture

The ignorant and hateful members of society are the ones who worship Krugman.  They also claim those who question krugman have no rationality, ethics, or economic knowledge..because they themselves lack these attributes and cannot hold a legitimate discussion with those who exceptionally practice these attributes.  There is nothing objective about creatively working within the box of keynesian theory (ie: making false assumptions).  Krugman's economic theory got us where we are today, facing the largest economic crisis in human history, and his kind has only suceeded in delaying/prolonging the inevitable. 


When the great keynesian experiment ends in catastrophe, will those hateful worshippers of Krugman scapegoat the failure on non-believers and those who naturally acted in contrast to keynesian assumptions?

Thu, 04/26/2012 - 16:38 | 2377976 Chump
Chump's picture

Dude you're back and nailing it! 

Thu, 04/26/2012 - 17:05 | 2378069 sgt_doom
sgt_doom's picture

I guess you're serious $1MBonus, bus seriously, your the same guys who believe Obama, with his 100% neocon administration, is a democrat, right? ? ?

Krugman, Group of Thirty, phony crat or faux crat, still fools all those rightwingers who claim to be "liberals" or "democrats" easily enough --- except that each and everytime the topic involves massive financial speculation, Krugman ALWAYS comes down on the side of that vile bankster klass!

But that is predicable, after all, as Krugman has long been a member of that Group of Thirty.....

Thu, 04/26/2012 - 18:11 | 2378343 Zero Govt
Zero Govt's picture

MillionDumbBureaucrats  - you just have to see a Doctor... I'm not sure he can do anything for you, it appears way too late for that, but at very least he'll valium your delusionally pickled brain

Thu, 04/26/2012 - 19:53 | 2378650 MeelionDollerBogus
MeelionDollerBogus's picture

Ah, millionfecesbonus... Krugman hasn't been right yet, nor has Bernanke.

We're in a triple-layered recession which hasn't recovered for 20 years with the most recent layer being razorblades of overt fraud and theft, and the previous layer being 3 feet thick of monkey feces of overt insider trading and jobs shipped deliberately outside of domestic territory.

Thu, 04/26/2012 - 20:39 | 2378766 BeetleBailey
BeetleBailey's picture

Seek help. Seriously.

You have lapped water from the toilet far too long, and the combination of toxic waste and fluoride has damaged your once sound mind.

Maybe that's it - you never had one to begin with, and are some auto-bot in the bowels of Obama's Truth or Show me a Link Jonestown of deflect and deny it all.

It is almost fun skewering you like a piece of lamb ready for the BBQ.

Key word being "almost".

Then again, I'm adding up the time it takes to typographically lampoon your bizarre diatribes of ka ka.

My bill will be in the mail to your loboto-cave shortly. I'm not cheap, so account for that self-flagellating  million dollar bonus, and subtract much of it.


Krugman, Geithner, Helicopter Bennie, and Paulson...Founding Fathers.....LOL.....good one.

Thu, 04/26/2012 - 16:12 | 2377886 AgShaman
AgShaman's picture

Is that code for?....

"Jimmy Crack Corn"

Thu, 04/26/2012 - 15:46 | 2377780 ACP
ACP's picture

Madman Bernanke would simply morph into Krugman and call himself the Criminal Fed Chief Formerly Known as Bernanke.

Thu, 04/26/2012 - 15:39 | 2377732 CH1
CH1's picture

Freeking brilliant!

Appoint Krugman to the Fed and bring that sucker down!

Thu, 04/26/2012 - 15:42 | 2377758 redpill
redpill's picture

Ya know a part of me would like to see it happen just so we can get this crap over with and swiftly proceed to the inevitable demise.

Thu, 04/26/2012 - 15:42 | 2377762 palmereldritch
palmereldritch's picture

  We must have the detonators!

Thu, 04/26/2012 - 15:40 | 2377739 Bam_Man
Bam_Man's picture

Make Krugman Fed Chairman and you can immediately kiss the Dollar's reserve currency status good-bye.

And that will get you plenty of inflation. A lot more than even that maniac has in mind.

Thu, 04/26/2012 - 15:47 | 2377792 bigdumbnugly
bigdumbnugly's picture


first i suppose the weasel would have to change his underwear after finding out he had a real job with real consequences and not one in which he can just give "sage advice" from the sidelines all the time.

after that, yeah, he'd prolly print plenty.

Thu, 04/26/2012 - 16:20 | 2377917 Whoa Dammit
Whoa Dammit's picture


Walk on dollars.

Turn paper into whine.


Thu, 04/26/2012 - 17:01 | 2378053 WonderDawg
WonderDawg's picture

WWKD? He would do what he's told to do by his employers, just like Bernanke does.

Thu, 04/26/2012 - 17:16 | 2378126 Whoa Dammit
Whoa Dammit's picture

Forgot one...

Set up tables for the money changers.

Thu, 04/26/2012 - 15:39 | 2377743 The Alarmist
The Alarmist's picture

I was on another page when I shuddered and felt a dark disturbance in the force.

Thu, 04/26/2012 - 17:03 | 2378060 mendigo
mendigo's picture

Its kind of cool:
Picture Krugman as Fed Chairman; hold that image for a moment.
When you come out of the catatonic despair, you will experience a brief euphoria. Then you may hurl.

Thu, 04/26/2012 - 15:40 | 2377746 Everybodys All ...
Everybodys All American's picture

Republican Krugman? Come on who ever wrote this knows better. That guy is the biggest progressive libtard on the planet.

Thu, 04/26/2012 - 15:42 | 2377747 SheepDog-One
SheepDog-One's picture

FED Chairsatan Krugman would probably immediately do $100 trillion QE. Of course it still wouldnt work, no amount actualy DOES work because its all just diluted currency and we'd be left with $100/gal gas and other horrendous real inflation but he'd still call himself 'right' because stocks would probably be way up. And we all know that stocks are all that matters. Nevermind the only entity who owned and traded stocks would be the FED itself, he'd still claim success. 

Thu, 04/26/2012 - 15:41 | 2377752 q99x2
q99x2's picture

Obviously there is no dealing with these punks. Until some of them are arrested and thrown into jail nothing is going to change.

Revolution this summer coming to a town near you.

Thu, 04/26/2012 - 15:45 | 2377764 Dr. Engali
Dr. Engali's picture

The question should be...What should the Fed chairman Bernank and Paul Krugman do?



Thu, 04/26/2012 - 15:55 | 2377811 SheepDog-One
SheepDog-One's picture

They should tie themselves in a burlap sack and hurl themselves into a lake.

Thu, 04/26/2012 - 15:43 | 2377768 taniquetil
taniquetil's picture

Paul Krugman would no doubt initiate Eternal QE, where anyone could borrow as much money as they wanted at 0% interest.

Thu, 04/26/2012 - 15:56 | 2377816 SheepDog-One
SheepDog-One's picture

Anyone? Or just his elite central bankster friends?

Thu, 04/26/2012 - 15:43 | 2377771 jomama
jomama's picture

who cares, he's a fucking maroon.

Thu, 04/26/2012 - 18:14 | 2378354 Zero Govt
Zero Govt's picture

Yep, totally away with the fairies

Thu, 04/26/2012 - 15:45 | 2377777 t_kAyk
t_kAyk's picture


Thu, 04/26/2012 - 15:46 | 2377788 buzzsaw99
buzzsaw99's picture

Krugman would blow the same people the bernank blows.

Thu, 04/26/2012 - 15:52 | 2377805 Catullus
Catullus's picture

They could always take the Treasury bonds purchased on the secondary market and mark them to zero and remit all interest payments back the Federal Government as Fed "profits". That way the Fed can reduce the interest burden in the Treasury Dept and they can continue to spend spend spend spend.

Krugman's big into the a huge government works project. Like pyramids or giant statues of great heroes in socialistic thought. So we need a giant statue of Carolina Kennedy's vagina built on top of the city of Cleveland, OH.

Also lowering the work week to 25 hours and increasing minimum wage to $20/hr to spread the wealth.

And increased funding for dry humor sitcoms on NBC like Frazier and Mad About You. Come to think of it, a statue of Helen Hunt would also be needed. That will be built in some "red state" city like Corsicana, TX or some shithole in Arkansas.

Thu, 04/26/2012 - 15:53 | 2377809 Clayton Bigsby
Clayton Bigsby's picture

Krugman sucks dicks and barks at the moon.

Thu, 04/26/2012 - 17:10 | 2378088 sgt_doom
sgt_doom's picture

Krugman? ?

Knowledgeable in astronomy? ?

I dunno....that's kinda difficult to accept....

As for the Federal Reserve, is there truly anyone alive, with more than the usual complement of three plus neurons, who still doesn't understand that it's simply a speculation-bubble-machine? ? ?

I mean, with the introduction of the Federal Reserve Act way back when, there was immediate reduction in reserve requirments, etc., etc., etc., key to the present.......

Thu, 04/26/2012 - 15:55 | 2377812 The Swedish Chef
The Swedish Chef's picture

I think he´d talk to whomever is in charge of NASA at the US government to see if they couldn´t provoke that alien invasion.

Thu, 04/26/2012 - 15:56 | 2377817 JW n FL
JW n FL's picture

Home > Your Role > Events

10th Annual Chicago Open Your Heart to the Children Benefit 5/23/2012 - Midwest

(Please note the change in date.)

Join us in celebrating our 10th Annual Hedge Funds Care Midwest Open Your Heart to the Children Benefit!

Wednesday, May 23, 2011

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Chicago, IL 60607

Thu, 04/26/2012 - 15:59 | 2377826 Whoa Dammit
Whoa Dammit's picture

The time to inflate was before the housing market crashed. Too late now.

Krugman is a day late and a dollar superfluous.

Thu, 04/26/2012 - 16:00 | 2377827 midgetrannyporn
midgetrannyporn's picture

The trannies refuse to confirm recent stock market action.

Thu, 04/26/2012 - 16:00 | 2377828 magpie
magpie's picture

Is there a reason to worry about the Bernank's health...making sure...just asking...

Thu, 04/26/2012 - 16:02 | 2377840 AcidRastaHead
AcidRastaHead's picture

Keep that Metaverse door open,  just imagine how much 'liquidity' such a Bernankrugman entity could provide.

Thu, 04/26/2012 - 16:05 | 2377855 Dr. Crime
Dr. Crime's picture

The average term of the the six Fed Chairs in the post-wwII era is 8 years and if you exclude the unfortunate Jimmy Carter appointee, William Miller, who only served for a year, the average tenure is approximately 9 and a half years. Bernake was appointed Feb 1, 2006. If past trends are indicative of future events, he will be Fed Chair till 2015.

Thu, 04/26/2012 - 16:06 | 2377859 bania
bania's picture

The real question is what would Brian Boitano do?

Thu, 04/26/2012 - 16:12 | 2377875 AcidRastaHead
AcidRastaHead's picture

Ha ha, a good question to ask oneself before embarking on any difficult task.

Thu, 04/26/2012 - 16:22 | 2377926 Clueless Economist
Clueless Economist's picture

Ewwww...I really do NOT want to know what BB does in the privacy of his bedroom

Thu, 04/26/2012 - 17:14 | 2378116 Piranhanoia
Piranhanoia's picture

figures,  you beat me to it!  +1

Thu, 04/26/2012 - 16:06 | 2377861 ebworthen
ebworthen's picture

Krugman = potato with a beard.

Thu, 04/26/2012 - 18:04 | 2378309 Problem Is
Problem Is's picture


A potato is bald...

The Bernank = Potato with a beard...

Krugman = Chia Pet Potato with a beard...

Thu, 04/26/2012 - 20:45 | 2378784 BeetleBailey
BeetleBailey's picture

Krugman is Bernanke's "beard" and visa versa

Thu, 04/26/2012 - 16:10 | 2377870 fuu
Thu, 04/26/2012 - 16:11 | 2377880 The Proletariat
The Proletariat's picture

The physical combat part of WWIII would immediately start and alien abductions would increase...

Thu, 04/26/2012 - 16:15 | 2377893 Unprepared
Unprepared's picture

I think I won't be able to sleep tonight now that I envisioned Krukeman running the Fed.

Thu, 04/26/2012 - 16:16 | 2377897 Shameful
Shameful's picture

The answer is simple, Krugman would solve all the problems with one brilliant stroke!  He could easily employ all the unemployed as Jr. Money Printers (TM), even working out of their homes (they are squatting in) with their own printing presses (on loan).  Pay a % back to the Fed for licensing, another % to the Fed Gov to buy treasuries and the rest can be spent into the economy aka buying imports.  Bam!  Employment situation solved, liquidity problem solved, GDP skyrockets!  And according to Krugman inflation is no problem, and debt can stretch into infinity so this will not radically increase prices as there will be such a huge demand for dollars when America's GPD tears off the chart like a rocket.

Sure we all know what the real results would be, but I could see him doing something this crazed.

Thu, 04/26/2012 - 16:45 | 2377996 SheepDog-One
SheepDog-One's picture

What are these 'problems' ou speak of? Stocks ripping up 1% at least daily, theres no bad news anywhere about anything.

Thu, 04/26/2012 - 16:57 | 2378040 AccreditedEYE
AccreditedEYE's picture

LMAO! Nice. Between this and the Death Star comment...I can't decide which I like more.

Thu, 04/26/2012 - 16:19 | 2377913 rlouis
rlouis's picture

A Chair Krugman would do whatever the bosses told him to do.  

Thu, 04/26/2012 - 18:01 | 2378303 Problem Is
Problem Is's picture

-1... The Bernank didn't like that one... 

+1... I did...

Thu, 04/26/2012 - 16:25 | 2377936 Frastric
Frastric's picture

Fed chairman Krugman would level every American city to simulate some kind of disaster, under his Keynesian believes, due to his misunderstanding that all that rebuilding will restart the economy...

Thu, 04/26/2012 - 16:29 | 2377948 khakuda
khakuda's picture

This all begs the question of why any non-government creditor would ever loan money at a reasonably low rate for forseeable future.  If you are not going to get interest AND get screwed on the nominal return of principle AND by inflation, the credit drunken world will cease to exist.  The only way of continuing the farce is to print money.  In what world is it ok to steal from the people doing the work and adding value and giving it to the people living beyond their means.

Thu, 04/26/2012 - 16:38 | 2377975 the not so migh...
the not so mighty maximiza's picture

His PhD is like no other.

Thu, 04/26/2012 - 16:44 | 2377994 SheepDog-One
SheepDog-One's picture

What would Krugman do? About what? Theres no problem anywhere with anything we're in total economic heaven now, stocks very near all-time highs. No reason to do anything.

Thu, 04/26/2012 - 16:48 | 2378008 magpie
magpie's picture

A new five or four year plan always sounds good to some people.

Thu, 04/26/2012 - 16:48 | 2378009 Pairadimes
Pairadimes's picture

Thanks. It took me 15 minutes to clean the Diet Coke off of my laptop.


Wile E. Krugman, Supergenius!

Thu, 04/26/2012 - 16:51 | 2378022 Soda Popinski
Soda Popinski's picture

Half man, half Bern, half Krug.  That would make for quite a monster.  I'd sell some of my gold and go long on printer cartridge stocks. 

Thu, 04/26/2012 - 16:52 | 2378025 Clowns to the l...
Clowns to the left_ jokers to the right's picture

On the one hand, the words "Fed Chairman Krugman" made me cringe and appreciate the Bernank for the first time ever. On the other hand, this crap would have been over by now because there wouldn't be enough printer ink in the world to keep up with Kruggy.

My biggest issue would be an appropriate nickname for him to replace Helicopter Ben. C-141 Starlifter Paul just doesn't have the ring that it should. Airbus Paul?

Thu, 04/26/2012 - 16:54 | 2378031 magpie
magpie's picture

Paul "The Spruce Goose" Krugman

Thu, 04/26/2012 - 18:35 | 2378340 Esculent 69
Esculent 69's picture

My first act as chairsatan Krugman will be to let the aliens "escape" from area 51 to start a war against the alien invasion that will commence as to stimulate the econmy and get us on the right track. Oh yeah, while we were fighting the aliens we suddenly had a new currency because the dollar somehow collapsed and  somehow your purchasing power evaporated by 70% + and there is no more toilet paper at walmart because we crusified them like the EPA did to the Oil and gas industry. Consumer protection and all don't ya know. At least the one's that didn't go along with our FINAL SOLUTION!!!  

Enjoy your tyranny and any complaints will be sent to a FEMA Camp somewhere in Montana. Please file complaint in person so as to "comfront" your complaints with the utmost care and concern.

I am Man-Pig-Ferret.  I'm off. Woooooooossssssssshhhhh

Thu, 04/26/2012 - 17:13 | 2378110 Debugas
Debugas's picture

at least Krugman identified the problems correctly - many years of excessive credit to support demand, now we see competitive currency devaluations again in an attempt to support foreign demand (to keep exports going).

the problem with Krugman is he did not offer any solutions :(

and the solution as i see it - START WRITING OFF DEBTS

Thu, 04/26/2012 - 17:13 | 2378114 Piranhanoia
Piranhanoia's picture

The headline fits with South Park's question;  "What would Brian Boitano do".    Time for a musical interlude?

Thu, 04/26/2012 - 17:27 | 2378171 sschu
sschu's picture

I recall somewhat my classes in finance from the early 1980s and the pernicious effects of inflation on company balance sheets and income statements and how inflation distorts this important information, especially things like quick ratio, etc.  IIRC, inflation so changed companies financial data that healthy, thriving companies actually saw their stock prices decline significantly in this high inflation environment.

How can this be?  I thought Krugman had thought about/factored in all these pieces to his QE fo-eva thesis.


Thu, 04/26/2012 - 17:45 | 2378243 chistletoe
chistletoe's picture

has Krugman been tested yet for spongiform encephalopathy?

Thu, 04/26/2012 - 17:59 | 2378290 Problem Is
Problem Is's picture

Same thing...

Krugman is just The Bernank with a toupee...

Thu, 04/26/2012 - 18:21 | 2378389 nmewn
nmewn's picture

It really does take different perceptions of reality.

Thanks for posting ;-)

Thu, 04/26/2012 - 18:57 | 2378502 Muppet Pimp
Muppet Pimp's picture

We already know what would happen and it starts with a J.  Krugman still thinks if only Japan had taken on more debt to solve their debt problem they would be better off.  Krugman has gotten exactly what he asked for and look where we are.  Jebus!

In 2002 he called for Greenspan to create a housing bubble:

How did that turn out PK?  My guess is in retrospect PK says it just wasn't a big enough bubble or water is not wet enough or some other such nonsense.

Why are people still listening to this bumbling idiot? 

Oh, thats right.  The ones who matter aren't thank god.  Krugman serves the far left from an Ivory tower at NYT and attempts to indoctrinate at Princeton.  Something tells me one or both of those gigs will be up soon.





Thu, 04/26/2012 - 20:31 | 2378749 grunk
grunk's picture

He'd change the toilet paper in the Fed bathroom to quadruple sheets with the possibility of thicker brands if the shit gets too bad.

Thu, 04/26/2012 - 21:56 | 2378954 Hugh Jorgan
Hugh Jorgan's picture

Krugman is a douchenozzle-and is far from an economist.  I would actually pay an admission fee to see his execution-up to lets say, $250(USD). 

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