Krugman doesn’t quite hate the TPP, yet

Seems Krugman would really like to give a wholeheartedly thumbs down to the TPP (this is basically the free trade deal for the Pacific rim countries). This would fit into his pundit liberal leanings – but the economist in him really can’t get past the fact that free trade deals are generally seen as good for the economy.

He has said he is a lukewarm opponent and but doesn't think it is that big of a deal. In his last post on the subject he is starting to get more vocal as he rips into a pro-TPP editorial and says that if that is best the supporters can come up with “this is not looking like a good idea”.

70's weren't that bad -- well for rich folks they were!

Krugman argues the stagflation of the 70's was actually not that bad for the middle-class. The real pain was afflicted on the rich. Not that pain is the right word -- just that the rich did not advance their incomes as much as they were used to. Since the 1970's, however, the rich have been doing fabulously well while the middle class is the segment of society that has not seen their incomes rise as quickly. So when the right instills fear in the electorate about a return to the economics of the 1970's -- there really isn't too much to fear.

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.