Opponents of protectionism sometimes misrepresent what the real danger of it is. It isn't going to cause a depression or mass unemployment. But it does do something -- beyond just raising domestic prices -- that undermines everyone's standard of living.
Krugman insists on the validity of the Phillips Curve, which purports to show an inverse relationship between unemployment and inflation, but the causal mechanism Krugman sees between them is straight out of Keynesian la-la land.
Today we branch out a bit and take on one of Robert Reich's popular (but obviously simplistic) videos about what's gone wrong with the economy. Why, we once had strong labor unions, education, and health care, and then big money corrupted politics and we don't have any of these things, and that's where our problems come from. We're further told that the financial crisis was caused by banks "gambling," and by fraud. (He never asks why the banks should suddenly have started gambling at a particular moment, as opposed to 50 years ago; there certainly was no "deregulation" that artificially encouraged "gambling," contrary to popular belief.)
Trump's tariffs are bad economics, so Krugman isn't entirely wrong, but his cheerleading for some of the well-known trade agreements needs the gentle correction we're known for on this show....
Krugman insists that Republicans are unique in refusing to admit to making mistakes, lying about their intentions, etc. Of course, these are characteristics of the entire regime, but Krugman, who is deeply tied to that regime, can never admit this. Bob and Tom, however, are subject to no such constraints.
Krugman insists that "the stock market is not the economy," and that downturns in the stock market need not portend bad economic times. But he takes the opportunity of stock market volatility to evaluate the present condition of the economy and its prospects for growth.
Krugman thinks Bitcoin serves no good purpose, except perhaps for people who are up to no good, and is powered by libertarian fantasies and paranoia. Bob and Tom have some fun banter on this one.
Krugman complains about Trump again this week, and blames him for (among numerous other things) the loss of U.S. credibility abroad. We take a stroll down (recent) memory lane to add some perspective: there's plenty of presidential crappiness to go around.
This week we bypass Krugman's columns to discuss the different schools of Keynesianism, how and when they emerged, and what their differences are.
Krugman hits a bunch of themes in this one, among them Alexander Hamilton, Russiagate, and the claim that no president ever acted on the desire to imprison his opponents. We restore a bit of perspective by glancing back at American history.
Immediately after the 2016 election, Krugman predicted markets would "never" recover, but after a strong 2017, Krugman is suddenly reminded that presidents don't have much influence over the economy after all. But if we should need more stimulus, he says, we'll be sorry we don't have a Keynesian in office.
In this episode, Bob once again flies solo, burdening the listeners with his odd sense of humor. But along the way, he tackles Krugman's objections to Bitcoin, and also discusses the relevance of Mises' regression theorem to the cryptocurrency.
In this episode, Bob flies solo when analyzing a Krugman interview with Vox's Ezra Klein. Being close to the holiday, it's only appropriate that our Keynesian Nobelist seems to be contradicting the ghost of Krugman past.
Krugman is claiming that everything he said regarding housing and the financial crisis has been vindicated. The problem, he says, was a general collapse in "demand." Contra Krugman co-host Bob Murphy, on the other hand, has shown in his own writing that in fact the crisis was not caused by a problem with "demand" in general, but with problems in particular sectors, brought about during the inflationary boom.
Krugman is upset that more Republicans aren't speaking out against the tax bill that's been in the news. But there's one bright light for Krugman: the neocons. Lots of them have been soundly anti-Trump, and Krugman appreciates their adherence to principle. (Funny, we don't recall Krugman ever admiring Ron Paul's adherence to principle, and his led to far fewer deaths....)
In one of the most heated episodes ever, Bob and Tom take apart Krugman's apologies for not fully appreciating the extent of his "white privilege," and for the things he says he once appreciated about America that are now disappearing: toleration (no, he's not criticizing people who shout down speakers), environmental protection, respect for truth and evidence, respect for intellectuals, etc. It's brutal.
No Krugman column this week for us; instead we step back and look at the big picture: what exactly do Keynesians get wrong in their understanding of the economy?
Krugman argues that the GOP tax plan, even on its own terms, would blow up the trade deficit and lead to millions of lost manufacturing jobs. We teach the economics behind his argument, but also mention--get ready for this--that Krugman leaves out two big factors that completely undercut his case.
Krugman says Republicans are expecting too much from the corporate income tax rate cut they're proposing. Is he right?
This week, Krugman disputes the claim that reductions in corporate tax rates help anyone but the super-rich. So we explain to him how they work.
Krugman is a fan of Richard Thaler, winner of the Nobel Prize in economics, and speaks in favor of Thaler's argument that real people often don't act like the calculating robots of neoclassical lore. Thaler is right about that, but we've got a bunch of punchy responses to his more dubious claims -- responses that are all the more fun to listen to because delivered before a live audience aboard the Contra Cruise!