Posted on 04/17/2012 7:43:36 PM PDT by billflax
Paul Krugman again. Still beholden to chimerical Phillips Curve absurdities, the professor proposes inflation to stimulate stagnant labor markets. The Phillips Curve insists that rising inflation lowers unemployment. The theory presumes businesses increase prices faster than workers’ wages raise effectively making labor inexpensive. When real salaries shrink, hiring accelerates.
As Krugman details, the Fed’s focus is dual: stable prices and full employment. So he seeks to overcome persistent unemployment through purposeful failure on the price front, lamenting that “Fed officials ... are feeling intimidated ... and that American workers are paying the price for their timidity.” Krugman thus urges Ben Bernanke to ignore Republicans and imbibe in another quantitative easing binge pushing “inflation to 3 percent or even 4 percent.”
Inflation surely conjures euphoria at the New York Times, but such havoc will whack workers. As diagrammed, every play scores a touchdown, but economic dials are not so delicately tuned as Krugman suggests. Once an inflation genie escapes his bottle nothing guarantees he’ll stay satiated at 4 percent. Many an inflation prescription meant ostensibly to usher affluence went haywire as skyrocketing prices eluded the monetary minders’ grasp.
Americans have lived this nightmare. Back in the ‘70s, when the Phillips Curve still curried widespread credibility, we suffered three recessions. As markets developed tolerance for monetary narcotics, inflation induced highs faded and withdrawal initiated painful downturns. When Washington sought to restore a stubborn inflation genie to his bottle, unemployment sped higher.
Successive administrations debased the dollar propelling this stagflating spiral downward through a decade of decline; conveniently scapegoating “greedy” businessmen. The Phillips Curve spawned Jimmy Carter’s “malaise” and the Misery Index. Amid recurring recessions, both inflation and unemployment catapulted to double digits. Inflation peaked at 13.5% in 1980 and unemployment at 10.2% in 1982, an impossible circumstance were Phillips Curve logic sound.
(Excerpt) Read more at forbes.com ...
Krugman is a Looter. Of course he likes inflation.
Krugman is an idiot.
Krugman makes enough money so inflation wouldn’t hurt him.
Krugman, as mentioned above, is an idiot. Like all liberals, Krugman is an elitist snob who secretly despises the poor. Inflation is also known as “the most cruel tax of all” precisely because the poor can least afford it.
How is it that this A-Hole still gets press????
What depraved parent would spend $50,000 per year to send Biffy or Buffy to Princeton to listen to Krugman or Blinder???
Truly, the stupidity is mind bogeling!!!
You are correct; however, you will not win Progressive Jeopardy because you did not provide the answer in the form of a question e.g. Who is an Idiot?
Krugman should give back his Nobel Prize, and all other prizes and honors he's received throughout his life.
Everything, for that matter, except perhaps the ribbons he got in 3rd grade for winning chess tournaments.
“You will not win Progressive Jeopardy because you did not provide the answer in the form of a question e.g. Who is an Idiot?”
rotflmao
Any inflation is just those who produce new dollars from nothing (the government, Federal Reserve and banks though higher velocity of money) stealing from those who already have dollars and dollar denominated assets like bonds, life insurance and loans to other people.
Sure it does! After all, shrinking the buying power of workers means they are all going to purchase more goods.
The "logic" of the left escapes me.
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