Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: JohnM who wrote (165856)	7/12/2011 3:57:31 PM
From: JohnM	Read Replies (1) \| Respond to of 541851

Paul Krugman - New York Times Blog July 12, 2011, 1:40 pm Chicago Calvinball Reading Noah Smith reading John Cochrane solidified a thought I’ve been grasping at for a while: the extraordinary lengths to which the Chicago School is going to avoid a straightforward interpretation of the mess we’re in. If you come at the current Lesser Depression from my angle, there’s no great mystery. Consistency in modeling isn’t always a virtue, but still, it’s striking how much continuity there is in the analysis of slumps: there’s a clear line of descent with only moderate modification running from Hicks 1937 to liquidity-trap models of Japan (pdf) to models that add in debt/deleveraging. The situation we’re in seems fully comprehensible. But at Chicago and elsewhere in the freshwater universe they’re playing Calvinball (and what a good coinage that was from Mike Konczal). All kinds of novel and implausible effects — effects that weren’t in any of the models they were using before the crisis — are invoked to explain why we’re in a sustained slump; strange to say, all of these newly invented models just happen to imply the need for tax cuts and a shrunken welfare state. But I don’t think it’s just political bias: part of what’s happening, I’m sure, is intellectual embarrassment. These people come from a movement that declared, with great arrogance, that Keynesian economics was dead – then failed to produce a workable alternative, and now finds itself in what is very recognizably a Keynesian world. Recognizably, that is, to everyone but them, because admitting that Keynesian-type thinking is useful now would just be too humiliating. Anyway, it’s a sight to behold. krugman.blogs.nytimes.com

To: JohnM who wrote (165856)	7/12/2011 7:44:17 PM
From: epicure	Read Replies (1) \| Respond to of 541851

I still say- business runs this country (whether the republicans realize that or not) and businesses do NOT want a default. I do not think the lobbyists in Washington, when push comes to shove, will accept a situation that leaves American businesses in jeopardy. What we have right now (I hope) is a buying opportunity- and a lot of posturing by absolute morons. I know the republicans believe American business is somehow at odds with government, but what I know is that American government is owned by big business- and I do not think a default is what big business wants- Republicans will follow the money, and the money (imo) will say "No defaults". We'll see. But that's my guess. So I'm not going to get my panties in a bunch over this.