10 Aug 2009

Krugman vs. Murphy on the Economy: Two Men Enter, One Man Leaves

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Back at the end of May, I was really excited when Paul Krugman wrote that inflation wasn’t going to be a problem anytime soon. Up until then, Krugman and my forecasts had been basically the same; I thought the huge deficits, power grabs, and monetary injections were going to wreck the economy, whereas Krugman had been saying the timid deficits, insufficient power grabs, and wussy monetary injections were not enough to save the economy from the reckless Bush policies. In other words, even if my predictions (prior to Krugman’s May 29th article) came true, Krugman could have justifiably claimed vindication as well. So that’s why his unambiguous “the people who are calling for inflation are liars or stupid” column was so pleasing to me.

In a similar vein, I am happy that yesterday Krugman came out and officially predicted that we are not in the beginning of the Great Depression II. Since I think we definitely are, this is yet another way to separate the economist from the ideological hack. (And oh oh oh I hope I end up being the economist. If I’m the sellout I’m not nearly as famous and rich as I should be.)

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