[lbo-talk] Kruman, China and secular stagnation

Eugene Coyle e.coyle at me.com
Mon Aug 24 21:56:40 PDT 2015

Krugman's August 24, 2015 column in NYTimes --


In clinging to his simple Keynesianism -- Krugman seems bewildered. He's embraced Bernanke's idea of a "global savings glut" sloshing around the world making waves like Governor Christie cannonballing into a swimming pool. At least he's anti-austerity but he says in a pathetic insertion: "Population growth is slowing worldwide, ... " -- an excuse popular in the 1930s when nothing else served.

And, the end of the same sentence: " ... and for all the hype about the latest technology, it doesn’t seem to be creating either surging productivity or a lot of demand for business investment."

Why would business rush to add the latest labor-reducing technology when they can get all the labor wanted very cheaply?

Krugman has defined the framework of secular stagnation and refuses to say the name.

Again, Krugman advocates more public spending on good things like infrastructure, borrowing cheaply to do it. Fine for all that but it is sad that the NYTimes Nobelist hasn't got a clue about WHY this is happening. Nor have I seen anything on "the left" that explains what is going on either.

Here's a hint: The biggest "global glut" is the reserve army of the un-employed. Until a policy is adopted to deal with that we are condemned to listen to Bernanke, Krugman, Robert Reich and the rest. At least the despicable Larry Summers sees the problem. Go with Pope Francis: cut the USA work week to four days WITH NO CUT IN PAY. A massive redistribution of income within the North, and also between the North and South.


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