Mr. Krugman:

Please discuss how the tax structure should be changed in order to help bring the New Guilded Age to an end.

Professor Krugman, thanks for holding office hours on Mr. Ashbrook’s show!

The case you’ve made for a Keynesian re-flation of the economy convinces me. I’m wondering, though, whether the U.S. economy’s co-dependent relationship with other economies such as China’s might lead to a lot of fiscal oxygen leaking out of the U.S. system.

Do you have particular worries about the international context in which we’re embedded? Do we need to structure a stimulus in 2009 differently from 1933?

Kind regards,
Scott Thompson
Calais, Vermont

Dear Professor Krugman:

Recently, I’ve been reading about and thinking about our American Healthcare system:
- the long-run healthcare liabilities facing companies such as the automakers
- the health-care insecurity of displaced workers and workers generally in our employer-based health care system

To what extent does a national single payer health care fit in as a part of federal fiscal stimulus?
In particular, what are your views of HR 676, The United States National Health Insurance Act.
Could this be a centerpiece of fiscal stimulus while narrowing inequality and reducing insecurity?

Aaron in Boston

To Dr. Krugman the Economist: With the Taliban being the major concern in Afghanistan what percentage of their budget comes from the opium trade? Would moving to the Swiss model that allows Medical Doctors to prescribe heroin for maintenance help reduce the funding of their terrorist activities?

To Paul Krugman the NY Times writer: With the recent photos of GWB tossing down Pisco Sours is he off the wagon and if so how badly has it affected his judgement?

I don’t always agree with Dr. Krugman but I sure as h*ll read and respect him. Keep on doing what you have been doing all along. Thanks to the On Point people for getting him on the air.

Hello Tom,

Paul Krugman won the 2008 Nobel Prize in Economics for advancing what paradigm?

I think that as the Earth’s finite resources are being rapidly consumed by an avalanche of human overpopulation, which implies massive consumption, we have business interests whose only interest is to ensnare more and more humans into the ever increasing consumption weltanschauung; thus accelerating the rush toward the destruction of the Earth as a habitable oasis in our solar system. If there is a desire to improve the life experience of children, we must attack the consumer consumption economic system which requires ever increasing human population, production and consumption all invigorated by marketing targeted at humans in the formative years of their lives, children. Failure to address this marketing nightmare virtually assures that a rational paradigm of stasis will never be attained by humans on planet Earth.

Declining to recognize the need for a stasis paradigm for humans is propelling the Earth to a point where we will be shaken off as water from a dog’s coat. Global warming, peak oil and global depression are all outgrowths of too many greedy humans.

When are economists such as Paul Krugman going to recognize that the Earth has finite resources not infinite such that they will start to address the reality that 7 billion humans can not all be millionaires and consume ad nauseum.

Prof K –
Many thanks for rejuvenating Lord Keynes.

My stimulus question is this.
Clearly it needs to be a jolt, but is that enough? WWII was a prolonged stimulus and left behind a reinvented, Marshal Plan-ed Europe that acted as a market expander and competitor with the US economy.

How about an infrastructure plus plan?
Wouldn’t something along the lines of a reinvention of the US transportation system including 21st century 300 mph intercity rail, 100 mph commuter rail, extended support for electric autos (& intracity trucks!) provide Apollo scale stimulus?
Clean air, major change to energy source and many new and lasting jobs would be a bonus, no?

Thanks again for championing the return to a more balanced and potentially fair economy!

I wonder if Mr. Krugman knows the work of Herman Daly, Josh Farley, and other ecological economists. From that paradigm, capitalism’s regular bubble-bursts are seen as systemic spasms of debt repudiation–spasms that are made structurally necessary because market capitalism, as practiced today, allows virtual wealth (debt) to grow faster than real wealth (things–cars, pigs, oil, bananas) can grow. Real things are subject to physical laws (like the laws of thermodynamics) and their rate of increase is finite. Debt, being an imaginary concept, can grow infinitely. When debt as claims on wealth outstrips wealth, some of those claims must be denied; thus, debt repudiation. As in, the S and L crisis, the Enron Crisis, and now the subprime bubble.

Neoclassical econonomics continues to insist that we can have infinite growth in real wealth on a finite planet. The current financial crisis is a result of that hopeless ideal running smack into physical reality. I hope Mr. Krugman gets with the new paradigm and uses his bully pulpit to spread the word.

given the range of demands on the economy isn’t it better to start universal health care with pregnant mothers and children to 18 years old?
isn’t it better to amend Medicare (the truly “American Health Care Plan)?
given the known and unknown health care needed by returning military, isn’t it better to include military who have served in a combat zone in a separate section of Medicare so that they can get qualified care closer to their homes, that the health care is for all health problems (service related or not), and that the health care continues for the individual’s lifetime should we admit that war does affect individuals for a lifetime.

Isn’t it an irony that GM fought anything like National Health Care which may well have saved them as you say. My son, a sculptor in the design process was miserable at GM for 5 years, He could not sweep up around himself at GM because of union rules. He happily took a paycut to go to work for Honda. His running commentary ar GM made us say, Why are they even still in business, Will? It’s a very big bathtub, says he. It will take a lonf time to run out. …..and now we see it.

How so we balance good economic sense with good sense from other industries when spending stimulus money? In particular how do we avoid making stupid decisions about infrastructure because of the need from an economic perspective to make those decisions quickly? For example because we already know how to refurbish roads and can get those projects moving quickly, what good will wider highways be when in 50 years we have run out of oil and automotive traffic is reduced by %75. Should we not be scrambling to identify forward thinking project managers and designers who can quickly implement intelligent projects like insulating weather sealing and re-cladding foreclosed homes, building new bike lanes, installing agricultural space on the roofs of supermarkets, replacing commercial lighting with pass through daylighting units and so on?

Mr. Krugman,

Before our government gives the Big Three any money, please ask that they pursue a swing loan from the profit rich oil companies and not the tax payers. They have the money, they need each other and then the car companies can offer the country honest efforts to retool and deliver cars the country and world needs for us to save ourselves. instead of being Pariahs they could be modern heros.

Cap the greed and join the new spirit of cooperation coming into power.

Sincerely,
Nancy Willert

I must sharply disagree with Paul Krugman when he says that the Big Three are burdened because they must fund expensive medical care that is not a cost to competitors. First the foreign competitors or they’re employees pay into a higher tax system or are required, as in the case of Germans, to buy private health insurance. However those OECD countries also have found ways to contain the spiraling cost of medical care. U.S. lawmakers lack the stomach to constrain health care inflation.

Second the Big Three, especially GM offer expensive Cadillac health insurance to retirees which exceeds that of ordinary retirees who depend on Medicare. There is already near universal health care for seniors; just not Cadillac health care.

Third Lucia earlier hit the nail on the head by observing that GM and I should add all the interests currently at the table scheming with Ted Kennedy on how they will impose a Massachusetts style insurance mandate on the 47 million uninsured U.S. residents have historically fiercely opposed universal health insurance. Now that they are all at the table the uninsured should expect a major league screwing.

Fourth Paul Krugman said they HAVE to offer health insurance. Wrong. The benefits are not mandated by law. They are offered as a bargaining chip with unions or as a way to attract desirable employees. Historically major medical insurance was offered during WW-II as an cheap alternative to better pay which was frozen by the federal government.

Mr. Evans makes two fundamental mistakes at arriving at his conclusions.

1) That the American public are fiercely opposed to universal health insurance. That assertion fails the logic test. It was the Republicans in the first term of the Clinton administration that foisted Harry and Louise propaganda upon the under-informed masses in order to protect the profits of the insurance companies and their investors. The gullible and ever fearful American public followed their “lead”.

2) More importantly, Mr. Evans fails to distinguish health care as a basic human necessity (like potable water, nutrition and clean air, etc.) from a commodity that should be the object of profit thereby eliminating 47 million of our neighbors from access to it.

He is entitled to his opinion but it is at least an inhumane one, mindlessly subservient to the mythical concept of the free-market and most probably profoundly immoral in a Dickensian sense.

It is high time that the 21st century began to bury the sad legacy of the 20th.

Mr. Krugman,

While the US certainly faces tremendous near term challenges, there is a reasonable argument that the very actions taken today to solve the problem (eg wildly printing money to reflate the economy) could lead to an even bigger fiasco in the future: a declining dollar and rapid inflation.

The Fed has never shown an ability to take away the “punch bowl” of low rates in time. Please help us understand how you would deal with the very real and dangerous reality of inflation in a global environment of “paper money” and rapidly increasing money supply. When does the Fed run out of bullets? Couldn’t we be in a scenario where there are no good solutions?

Martin

I was right there with Mr. Krugman until he started talking about things which he evidently doesn’t know as much about, namely, environmental economics. He suggests that somehow fixing health care in these economic times makes sense, while reducing emissions doesn’t. Really? I’m all for universal health care, and do think that long term it should be able to save society money. If that’s true for health care, it is much, much truer for environmental regulation, which will save us money and build our future economy. Mr. Krugman, for some reason, presents that as a ‘tax’ rather than as an investment.

Nonsense.

Krugman won his Nobel prize for work done before he became a polemicist for the left. He would be advocating a large Keynesian stimulus even if it had absolutely no chance of working. Krugman believes our government should be must more interventionist because he wants economic decisions made by the political class, not the citizenry.

I thank you and Professor Krugman for tonight’s interesting hour on our economic crisis.

I am surprised that no one asked him nor did he say that when government spending goes up, expecially if it borrows more and prints more money, its money is worth less and less; inflation increases whoppingly. And who suffers the most from inflation – the poor.

Any economic program must address this problem.

I thank you and Professor Krugman for tonight’s interesting hour on our economic crisis.

I am surprised that no one asked him nor did he say that when government spending goes up, expecially if it borrows more and prints more money, its money is worth less and less; inflation increases whoppingly. And who suffers the most from inflation – the poor.

Any economic program must address this problem.

Sincerely,
Carol Weinstein

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Pat Pruye makes 2 good points refuting Rick Evans’ comments about universal health care. It is clear that the health care system does not operate like a commercial business. People do not shop for the lowest price for the bulk of their medical services. Health care providers do not have price lists posted for their services – some don’t give them to their patients even when asked. Competition in health care is a myth – health care providers do not have sales or rebates or mark-downs for patients even when they are in the same neighborhood.

I would hope that Mr. Evans would consider the value of Medicare for seniors who consider it a godsend that has greatly improved their quality of life and extended their life spans. Amending Medicare to cover pregnant women and children would be a significant economic and psychological boost for families during the current economic crises when parental attention is focused on retaining jobs, paying mortgages, and funding retirements. In addition it would provide a healthier work force by early attention to health life styles and chronic childhood problems such as asthma, diabetes, obesity, autism, etc. (I still remember my 8 year old daughter pestering me about smoking.)

I would also hope that Mr. Evans would think of the military returning from combat zones having to deal with their health problems. It is clear that the military and Veterans Administration do not have the wherewithal to handle these problems in a medically timely manner. It is also clear from the latest information on Agent Orange that today’s combat zones can cause medical problems that arise years after combat. It seems only just to include returning combat military in Medicare for the rest of their lives as part of our contract with them for fighting in a combat zone.

When Mr. Krugman addresses global wage competition in the auto industry he chooses to compare US labor rates to those in Germany. Unfortunately one cannot choose which country to compete with, after all, it is not like we are being overrun by Mercedes and bmw’s, it is primarily the Japanese makes.

Also, he cites healthcare costs as the unique advantage of the Japanese car companies over the big three. What about the 8,000 workers that gm pays to stay home, do the Japanese auto companies do that? And when it comes to healthcare why does Mr. Krugman not choose German auto companies as a comparison?

Thanks…twarren, st louis mo

Prof. Krugman,
A short time back, there were frequent mentions of about 58 trillion in derivatives (and, perhaps, other instruments?) floating about. This number, or even a fraction of it, dwarfs the 100s of billions currently discussed. What is this 58 trillion? Is there risk not currently discussed looming in the background or do the 100s of billions manage it all?

An economic stimulis or bail-out what did the last one do? Most people took their stimulis checks, either paid on debts, on savings accounts or went to Wal-Mart to buy goods that were made in China or some other Asian area which was where the benefit of the stimilus plan was the most beneficial. That bail out bucket has too big of a hole to be effective.
Why is it that there is no emphasis on getting the US Manufacturing base re-established to get people back to work? Seems that a lot of US consumers forget that the definition of patriotism is devotion and concern for the welfare of ones country, there is a need to pay more attention to look for the “Made in USA” labels.

Globally, there are more and more people consuming more and more natural resources. Does the current crisis have anything to do with us running out of resources? Is a keynsian plan not just more denial that we have real problems?

Your guest does not seem to respect the difference between World War II spending and New Deal spending. This isn’t to say that New Deal spending was bad and World War II spending was good they probably were both necessariy. They were however also very different in some key regards and one was as even your guest admits was thoroughly more effective than the other. World War II spending was focused on creating jobs in a new emerging industry New Deal spending was focused on maintaining jobs in a dieing industry, World War II spending had clear objectives, New Deal spending was just sending money chasing after problems, World War II spending was focused in large on R&D, New Deal spending was focused on maintaining an old system sometimes despite technology. The difference between the two couldn’t be more clear. Let’s spend but let us also follow the World War II model and spend on new enterprise with clear objectives let’s not spend on ineffective dieing industries. Government spending isn’t inherently good or inherently bad but there definitely is a right way and a wrong to spend money I say spend it the right way.

Too bad there is not more focus on the role of overpopulation and consumption-based economics (as discussed in the above comment by Ken Hall). Most economists use GDP–Gross Domestic Product– as if
it was mostly a measurement of productive economic activity. I wonder what would be left if all the consumption and “non-product” activity was subtracted–like entertainment, sports, fashion spending, gambling, prisons, etc.?

If I may contradict everything Paul Krugman says, I pose the following question:

Since this depression was caused by the printing of money and government intervention in the economy, how can printing more money and having more government intervention do anything but make it worse?

Bob read some history please, the depression was caused by the collapse of banks and confidence in the economy.

Not the printing of money.
If the government did not intervene it would have been a lot worse.

I have a question for you Bob, how is that you know better than Professor of Economics and Nobel Prize winner?

If I had to chose between the two of you, well Paul has been right about a lot of what is happening now, and he has warned about this for years.

Jeff, I have read history. For example, _America’s Great Depression_ By Murray Rothbard, _The Roosevelt Myth_, by John T. Flynn, an entire book of articles by Ludwig von Mises written between 1919 and 1946 detailing exactly what was happening at the time and its results.

Or didn’t you notice that the Federal Reserve was founded in 1913, and it took only 20 years to achieve the Great Depression? Stagflation? Bubble-and-burst after bubble-and-burst ever since?

Every single purpose given for the founding of the Federal Reserve (price stability? _preventing_ depressions?) has failed in SPADES since it was founded. This is exactly what happened after the First and Second Banks of the United States were established, and the specific reasons cited in Andrew Jackson’s veto of the Second Bank.

It’s clear that the only other “economist” that Krugman has ever read was Keynes, what’s your excuse?

Go look up the depression of 1836. Just as awful a monetary contraction as 1929, and lasted only 6 months instead of 17 years. The reason: Andrew Jackson’s Veto. Read it.

Oh yes, I’ve looked at history.

The New Deal did alot to alleivate the situation.

According to Mr Mankiew – hardly a ’socialist’

‘Probably the most important source of recovery after 1933 was monetary expansion, eased by President Franklin D. Roosevelt’s decision to abandon the gold standard and devalue the dollar. From 1933 to 1937, the money supply rose, stopping the deflation. Production in the economy grew about 10 percent a year, three times its normal rate.’

http://www.nytimes.com/2008/10/26/business/26view.html?_r=1

FDR turned from his own policies in 36 -37. Causing in part ’round 2′.

Many of his programs were doomed to fail and did – but I dont buy the free markets dogma. In free markets wealth always trickles up. The upper class controls govt – just like they do now. Just like ‘TR’ fought against.

He gave people hope. I remember the his picture on the wall of my grandparents. While Germany turned to nationalism – FDR in the opinion of many – saved democracy from turning to facism.

The word ‘leader’ comes to mind. Not like out fearless leader today. Where has he been for the last few months?

In Peru making sure we can outsource more jobs.

I am writing to humbly correct a comment Mr. Krugman made on On Point in regards to the movie “It’s A Wonderful Life.” The movie has been my favorite film since childhood. As Mr. Krugman was speaking during On Point I was thinking of the movie and the similarities of the scene showing “Black Tuesday,” the day of the run on the banks in 1929. I was very intrigued when he brought up the movie as well.

Mr. Krugman made the point that at the time the movie was made there was banking insurance, etc. that would have protected accounts, and so therefore, the idea of a run on the bank couldn’t have have happened. Well, the film was indeed released in 1946, after WWII, at a time of insurance for accounts. The scene of the run on the bank, however, was set around 1932. Jimmy Stuart’s character, George, attended his brother’s high school graduation in 1928, and four years later George and Mary got married and used their $2,000 honeymoon money to protect the Building and Loan’s accounts to keep them from being bought by Mr. Potter and his ugly bank dealings. It is very plausible and possible that in 1932 the events in the movie could have happened.
Thanks for listening, I have a special place in my heart for this film!

“FDR in the opinion of many – saved democracy from turning to facism.”

Do you know what fascism is? FDR didn’t “save democracy”, he turned America into fascist state too.

“Democracy” was saved by his _death_.

Bob I guess your not a fan of FDR. My grandfather was.
He went from being unemployed to full employment on one of the WPA work programs. Then the war started, he worked in the Brooklyn Navy Yards fitting ships.
My grandfather’s story is the story of millions.

FDR might have been many things being a fascist was not one of them.

Your statement that FDR turned America into a “fascist state” is so absurd and shows me that your a fool, well read, but still a fool. Do you know what fascism is?

I over 80% of my mothers family lived and died by the hands of the Nazis during WW2, don’t lecture me on fascism.

Also you left out the part about the Federal Reserve Banks being run by the same people who owned the banks during the period you sited. A little over site on your part.

FDR was no fascist. In FDR’s day we had Mussolini, Franco, and Hitler, in Russia it was Stalin. I’ll take FDR any day of the week over them.

Saying FDR “turned America into fascist state too” shows me your a fool, well read but a fool nonetheless.

As for the bubble analogy, well go figure, greed and the herd mentality create economic instability.

Andrew Jackson also killed hundreds of thousands of men, women and children of the Cherokee nation in the forced march west known as the trail of tears.

It took me awhile to get around to listening to it, but there is something quite confusing in the last few interviews I have heard Mr. Krugman give on this topic. With all due respect, the state of the national debt relative to GDP which Mr. Krugman cites appears to be substantially at odds with the numbers being published by Treasury and various other official economic sources. Apparently we are presently $10+ trillion in the red (Mr. Krugman quoted $5.6 trillion on Fresh Air, I believe??), and we have some $8 trillion promised just for the lending facilities, bailout programs, security guarantees, TARP, etc. (not including long-term unfunded or partially-funded mandates like SS, Medicare, etc.). GDP for ‘08 / ‘09 is estimated to be around $13 trillion if the economy doesn’t take us too far down there, too. How can we possibly have the kind of headroom for additional new-money debt that is being proposed, even if it is okay to go to 125%+ of GDP? If it turns out that we are deceiving ourselves on this score too, and just borrowing to maintain our standard of living until there’s nothing / no one left to get money from that will be worth anything, the self-deception is going to result in even worse consequences in the end than the initial crisis ever would have. I’m not sure there is any field that uses math with more fuzz and fudge than economics.

[...] Lehrer gets a second mention for a good interview with Paul Krugman. More… (Bonus: he was on On Point three weeks ago, [...]

[...] by Christopher Scholke on April 9, 2009 I was overjoyed in finding this clip from an old On Point episode yesterday. It’s the first media conversation that I can remember where the average [...]