Krugman seem the writing on the wall but don't raise the rates yet....

The jobs numbers have been really good the past month and so there is has been a renewed push to start raising interest rates. The Fed says that perhaps, just perhaps, they will start to look at doing that. Krugman says whoa! let's not get ahead of ourselves -- the facts on the ground do show some improvement but the risks of raising rates are not worth it. If rates are raised too early then the economy could fall back into the doldrums like in Europe and Japan. Cheaper money is still needed for the foreseeable future. If inflation does come back then the Feb can always use the tools at its disposable to ramp things down.

Krugman backpedals on his love for Piketty

Rarely has someone praised a book as much as Krugman did of Piketty's book on rising inequality. If you ever need to write a reference or review and need some superlatives quotes, his review is a great place to get ideas! Some nuggets from Krugman's review include: "magnificent", "sweeping meditation on inequality", "revolution in our understanding of long-term trends in inequality", "revelation", "This is a book that will change both the way we think about society and the way we do economics.", "the Piketty revolution", "an awesome work", "rigor of his capital analysis", "sheer, exhilarating intellectual elegance", "masterly diagnosis", "extremely important book on all fronts", and  "transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to."

Wow. Of course, Krugman's positive review isn't a surprise since Krugman has been talking inequality for decades. Now's he's got a big, thick tome from Piketty to back up his thesis.

But hold on -- seems there might be some funny business going on with Piketty's data. The Financial Times uncovered some issues that is making waves. Krugman in a remarkable post acknowledges this and says that Piketty will need to address this and that "we’ll see how well he does it." Quite a change from last month when Krugman said that anyone who sees problems with Piketty's data probably is wrong since Picketty's "done his homework!"  What makes this especially interesting is that Krugman led the charge during last year's economic data brouhaha when two economists were found to have made Excel errors in a well-known paper that claimed high debt levels led to lower growth.

Krugman advocates sustained population growth -- sort of...

Krugman says that you need a growing population to have a growing economy. With less population, while that is better for the environment, also leads to less wealth. There is a way to have a richer society with less population (and its environmental benefits) but this would involve certain economic tools that are not political feasible (such has allowing higher inflation).

Krugman admits he his wrong!

Krugman poo-poos the sense that Europe is back on track. He says while no disaster has happened still the very slow growth is a terrible thing. The back story is that he has been advocating for less austerity for many years but still Europe did not have looser monetary policy. The promise from those in power in Europe is that growth would come from higher confidence in the economy since they kept inflation down but Krugman's point is that growth did not result.

In this same post Krugman also admits that he was WRONG that the euro zone would split up. Back in 2012 he said it would happen in a matter of months.

Class in America and the Rich

Krugman points out that when you hear talk of someone saying we should not engage in class warfare -- they are really just defending the upper class its fight for smaller government. Krugman also goes way back in time (1992) to highlight something he wrote then that shows that the rich really do stay rich and there is not that much income mobility in the past couple decades.

Obamacare update

Now that the initial Obamacare enrollment is in the cards, Krugman has been doing a victory lap on it's success. He is especially gleeful since he admits the roll-out was terrible but that liberals saw the problem and worked hard to correct.

Krugman and his Nobel, Economists who have been wrong, and North Carolina jobs

Krugman writes at length on whether he or other laureates should be given more visibility since they won prestigious prizes. His point is yes maybe they should be given a forum but if they continue to get things wrong then that should be the end of them in the public arena.

It is always fun when Krugman goes back a couple years to look at what people said and then show how now they been proved wrong and he’s been right. In this post Krugman writes how in 2010 Ken Rogoff attacks those who wanted more fiscal stimulus and said that those people who advocated against austerity would be wrong about more recessions. Krugman then breaks out with a chart showing more recessions in Europe since 2010.   

Another favorite topic is when Krugman and the WSJ go mano-a-mano over the same issue. Recently it was over lower unemployment in North Carolina. It seems NC allowed many people’s UI benefits to end. The WSJ pointed out that this eventually lowered the NC UE rate, Krugman doesn't dispute but says the rate went lower since more people just stopped looking for work and thus are no longer counted in the UE rate.

Dem some fighting words!

Not even a week ago Krugman posted that anyone who says he advocated a housing bubble in 2002 to offset the internet bubble of the late '90's is both a fool and liar. So now in today's main editorial in the WSJ  about the legacy of Ben Bernanke did they throw the gauntlet down with this line -- "Mr. Greenspan nonetheless followed the advice of Paul Krugman to promote a housing bubble to offset the dot-com crash."  Precious.

Krugman vs WSJ & Stephens - it gets nasty!

Krugman and WSJ columnist Bret Stephens are in a slug fest. It should be noted that Stephens won the Pulitzer Prize in last year - so this is quite high profile.

It started when Stephens blasted Obama for a economic inequality speech. Not quite sure why Stephens was even writing about this since he focuses on foreign policy but evidently he made a big mistake - he used nominal figures to show higher incomes for poor folk instead of using inflation-adjusted numbers. When using inflation adjusted then there was no increase for the poor. Of course Krugman jumped all over this since he's been focusing on inequality lately. Stephens admitted his error but still said it was an innocent mistake that doesn't change his basic hypothesis that all Americans are enjoying rising incomes, using CBO data to back it up.  Interestingly enough Krugman also uses this data to back his claim that the same data shows rising inequality.

Then for Krugman's regular weekly column his told the story again how Stephens used the wrong data to give proof that conservatives are purposely using confusing data and the WSJ didn't issue a correction. This, of course, send Stephens through the roof and he responded in his regular column that Krugman is bully and why hasn't Krugman issued corrections for saying in 2002 that Greenspan should start a housing bubble or that Europe is an economic success in 2010. Krugman then responded WTF... that was not a correction since it wasn't posted to the original article, just in an on-line post.

exciting stuff!