Krugman, Summers, Rosenberg, and Bremmer debate whether the US will emulate Japan

[drz-400]

They weathered the storm with all sorts of taxpayer funded bailouts.



Never mind that most of the things that caused the problems would have never happened in the first place with G/S still in place.

BTW, you didn't answer my question.

How specifically would G/S stopped any of the subprime morgage crisis?

 

[1Perry]

How specifically would G/S stopped any of the subprime morgage crisis?

Sorry, my question first.

 

[drz-400]

Sorry, my question first.

:lamo

Dude, you are a joke. No, I do not think women are too stupid to work in Finance and I highly doubt Larry Summers actually thinks that as well.

 

[1Perry]

:lamo

Dude, you are a joke. No, I do not think women are too stupid to work in Finance and I highly doubt Larry Summers actually thinks that as well.

And yet, that was his arguement. When he was president of Harvard the number of tenured women declined each and every year. Yes, he claims his views were not really his but ones that "others" had held but he repeated them and by his actual actions it would seem he held them.

What it says along with the huge errors he has made shows that he is out of touch with real life.

 

[Mach]

I listened to a lot of it, it's on youtube now. I agree with drz-400, krugman is a political hack as always, and summers at the least had a more reasonable argument. He was more comfortable and slick too...warning signs that he's also political just in a different way perhaps...

Krugamn saying the U.S. is doing terribly politically and he mentions Newt Gingritch...come on. Doesn't fly in a debate, works better when he does those pre-recorded appeals to emotion with no live audience. Then Summers goes on to point out that in context, the U.S. political system compared to Japan and hell, the rest of the world, looks like the golden child.

 

[oldreliable67]

And yet, that was his arguement. When he was president of Harvard the number of tenured women declined each and every year. Yes, he claims his views were not really his but ones that "others" had held but he repeated them and by his actual actions it would seem he held them.

What it says along with the huge errors he has made shows that he is out of touch with real life.

I don't know if I agree with you view on the Harvard and women controversy. Back when it happened, I read his comments, and just now re-read the account at Wiki, and I still don't get the impression that he was being sexist at all. It was important to me at the time, because my two daughters (one now a lawyer and one now a doctor) were very up in arms at the accounts in the press, and I (we) wanted to know what was really said.

We came away feeling that it certainly wasn't a very smart presentation for a guy who is supposed to be quite smart, but it was intended to be provocative rather than sexist. Which it certainly was! We also could see very easily how others would get the opposite impression. We could also see how those remarks could be used by Summer's detractors (and there were many) to rile anti-Summers sentiment.

In sum, Summers, for a bright guy, has done and said some really dumb stuff.

 

[1Perry]

I listened to a lot of it, it's on youtube now. I agree with drz-400, krugman is a political hack as always, and summers at the least had a more reasonable argument. He was more comfortable and slick too...warning signs that he's also political just in a different way perhaps...

Krugamn saying the U.S. is doing terribly politically and he mentions Newt Gingritch...come on. Doesn't fly in a debate, works better when he does those pre-recorded appeals to emotion with no live audience. Then Summers goes on to point out that in context, the U.S. political system compared to Japan and hell, the rest of the world, looks like the golden child.

Of course, he has a hide to protect.

 

[1Perry]

I don't know if I agree with you view on the Harvard and women controversy. Back when it happened, I read his comments, and just now re-read the account at Wiki, and I still don't get the impression that he was being sexist at all. It was important to me at the time, because my two daughters (one now a lawyer and one now a doctor) were very up in arms at the accounts in the press, and I (we) wanted to know what was really said.

I can understand a position of doubt concerning what he said but when combined with what he actually did, award tenure to fewer women in each year he was president, it's certainly smoke for the fire.

We came away feeling that it certainly wasn't a very smart presentation for a guy who is supposed to be quite smart, but it was intended to be provocative rather than sexist. Which it certainly was! We also could see very easily how others would get the opposite impression. We could also see how those remarks could be used by Summer's detractors (and there were many) to rile anti-Summers sentiment.

In sum, Summers, for a bright guy, has done and said some really dumb stuff.

I question the descriptive of "bright" when as you note how often he's done really dumb stuff. Everyone makes mistakes. Bright people learn from them. Something Summers particiation in Obama's failed stimulus shows he has never done.

 

[oldreliable67]

I can understand a position of doubt concerning what he said but when combined with what he actually did, award tenure to fewer women in each year he was president, it's certainly smoke for the fire.

I don't recall seeing any stats on it, but every time I heard that said, I wondered how many women were eligible for tenure in that period. That is, to what proportion of the eligible pool did he award tenure and how did it compare to prior years and administrations. Don't know; just wondering.

I question the descriptive of "bright" when as you note how often he's done really dumb stuff. Everyone makes mistakes. Bright people learn from them. Something Summers particiation in Obama's failed stimulus shows he has never done.

Point taken. Even if you write some good quality papers (along with some not so good but still acceptable), it doesn't mean you, as we used to say in the Army, "make good decisions when forced to think under fire."

 

[1Perry]

I don't recall seeing any stats on it, but every time I heard that said, I wondered how many women were eligible for tenure in that period. That is, to what proportion of the eligible pool did he award tenure and how did it compare to prior years and administrations. Don't know; just wondering.

I understand. I find it odd that it could have simply been a coincedence. It's possible but he did get fired from the position. Granted, someone in his position will get fired in a college setting for something like this even when he meant no harm, but again...smoke/fire.

Point taken. Even if you write some good quality papers (along with some not so good but still acceptable), it doesn't mean you, as we used to say in the Army, "make good decisions when forced to think under fire."

I believe he is full of classroom knowledge and theory. It's my position that this does not translate to the real world. There is a study out right now that says this is why the $800 billion stimulus was a failure. I'm thinking it was even from Harvard. People do not react the way classroom theory says they should in many cases.

 

[drz-400]

And yet, that was his arguement. When he was president of Harvard the number of tenured women declined each and every year. Yes, he claims his views were not really his but ones that "others" had held but he repeated them and by his actual actions it would seem he held them.

What it says along with the huge errors he has made shows that he is out of touch with real life.

So what? This all has really nothing to do with the point of this thread. Have you even watched the video yet enough to comment on who you thought was the best in the debate? If he did actually do those sexist things I would disagree with him there, I am not a Larry Summers biographer. However, I think in this debate he was better and he generally is a pretty influential and smart economist.

 

[washunut]

A must watch for anyone interested in Economics

[video]http://www.livestream.com/munkdebates/video?clipId=pla_d7d2cf8b-0c2e-4b6f-8122-8556e089620d[/video]

EDIT: I should note that the debate doesn't really start until 17:00.

Not sure must watch but interesting. I think the person who brought the most/best facts was the Canadian.

 

[1Perry]

So what? This all has really nothing to do with the point of this thread. Have you even watched the video yet enough to comment on who you thought was the best in the debate? If he did actually do those sexist things I would disagree with him there, I am not a Larry Summers biographer. However, I think in this debate he was better and he generally is a pretty influential and smart economist.

I realize the point of the thread. Just because I don't really care to discuss whether or not some clod is right once inawhile doesn't discount my point that I do not understand why anyone would even care what someone like Summers has to say.

As to my earlier points.....I'm sure Jerry Sandusky would have a lot of correct and valuable information concerning running a program for kids but I doubt he's going to be asked about it.

 

[Rhapsody1447]

Not sure must watch but interesting. I think the person who brought the most/best facts was the Canadian.

Agree with you here. Although Summers definitely had the best presentation, I think the Canadians ideas were spot on. Also, Bremmers made some good arguments in regards to American philanthropy and food production. Although we're facing financial doomsday right now, that doesn't mean our economic potential is as weak as Japans. I liked Summers response to income inequality and the importance of entrepreneurship but I disagree with Summers/Krugman and their calls for more printing and more stimulus. Neither have been sufficient in the past 3 years to get us on track to a real recovery, and the higher the debt levels get the less good they will do. I do believe that printing into a deflationary environment is necessary to prevent a deflationary spiral, it is just a very tight rope to walk between crushing deflation and hyperinflation. An article I just read tonight describes Argentina's recovery since their debt default and what analysts believe is a 25% inflation rate. There is no doubt, inflation had a very positive effect on getting their economy back on track, but it's current levels are unsustainable. They are currently "partying" and have enjoyied huge gains in GDP over the past decade or so, but the party can't last forever. You can read it here: Inflation downplayed as Argentina recovers - CNN.com

Initially I intended to do a longer write-up on the debate, but I forgot to write it down while I was watching and forgot a lot of the points I thought were important. I'll give it another watch this weekend, and type up a fuller response. Personally I think the Japan vs. US debate is fascinating. In my opinion, deficit growth needs to fall dramatically if we are to have any hope in the future of our currency. Pain in the short term may be necessary if we want to avoid a future like Japan.

I realize the point of the thread. Just because I don't really care to discuss whether or not some clod is right once inawhile doesn't discount my point that I do not understand why anyone would even care what someone like Summers has to say

Then why the hell are you here? Go away and stop hijacking my thread. Go start your own somewhere else on Summers if you are so passionate about it. No one here cares about your petty grievances with Summer's past.

 

[1Perry]

Then why the hell are you here? Go away and stop hijacking my thread. Go start your own somewhere else on Summers if you are so passionate about it. No one here cares about your petty grievances with Summer's past.

Petty. LOL

 

[Rhapsody1447]

I listened to a lot of it, it's on youtube now. I agree with drz-400, krugman is a political hack as always, and summers at the least had a more reasonable argument. He was more comfortable and slick too...warning signs that he's also political just in a different way perhaps...

Krugamn saying the U.S. is doing terribly politically and he mentions Newt Gingritch...come on. Doesn't fly in a debate, works better when he does those pre-recorded appeals to emotion with no live audience. Then Summers goes on to point out that in context, the U.S. political system compared to Japan and hell, the rest of the world, looks like the golden child.

Fully agree with you here. Our political system may be in dire straits due to record levels of partisanship and class warfare, but if you look at it on a relative basis we still have one of the best in the world. Summers was also spot on about the status of the dollar being a reserve currency, which combined with our outstanding legal system and stable political process, still makes the USA the number one place in the world for people to put their money. There is no better demonstration of this than the HUGE rally in US Treasuries in the face of the debt ceiling debate and credit downgrade. That alone gives us a much better chance of getting out of this mess much better than Japan did.

 

[Rhapsody1447]

That is why I thought Summers argument carried more weight. Krugman and Summers were in general agreement about the problems that the US currently faces. There are many similarities between the US plight and the plight of Japan's lost decade/era. The thing that sets Summers apart from Krugman IMO is the scale of the crisis. As the above post notes, Japans house prices were down 80% (compared to the US's 30%), equities were down 80% in Japan (compared to the US 18%).

Also, while it may seem the US is caught in a policy freeze in washington, I think people forget the amount of legislation that was done a couple of years ago during the actual crisis. The politics in the US are polarized, but not to the extent that Krugman characterizes it. IMO Krugman comes off as narrow minded, and makes it seem as if the US's sole problem comes out of events in Washington (relating to one party) which I regard as over the top and inaccurate. Summers has a much more level headed response in my opinion and comes off as more common sense than Krugman.

The US was quick to act during the crisis and things like TARP where largely effective in stopping the crisis. The corporate balance sheets in the US are stronger than ever. The fed has quickly cut its rates to zero and has played a great role in preventing deflation. Our population is aging, but not to the extent as it was in japan, and people are still moving here in massive amounts, also in stark contrast to Japan's lost era. I think if you really look at, the US has similarities, but the size and scope of the problems are smaller, and our responses have been more adequate than Japans. These two things will prevent the US from ever seeing something like Japan saw.

Once again I fully agree. The only issue I have is with Summer's closing arguments where he points to zero interest rates and low government bond yields as being a good sign for the future. While I am obviously opposed to a hike in interest rates at this time, 0% rates are more a reflection on short term credit growth (which hasn't been great) than an indicator for future economic growth. The moderator and Rosenberg both pointed to Japan's low interest rates as evidence that we are following in their path. I agreed much more Rosenberg's closing statements than Summers. The negative interest rates on TIPS were a good example of weak potential growth.

 

[Mach]

I liked also what Summers mentioned about the expertise of the U.S. in terms of governing. Makes me see all our political infrastructure in a different light. Implying that we have all these think-tanks, opposing sides, robust ongoing academic debates and "progress", think tanks that produce policy arguments and so forth. All of this, giving whatever political parties are in power, a strong sensible "work force" that being steeped in government/economics/policy, is basically a better trained government work-force. And when they make policies, they lean on the policy engines to help enact less-dumb policies.

He mentioned Japan just doesn't have this, and thus, can't effectively navigate the crisis in the way we can.

 

[iliveonramen]

IMO Krugman comes off as narrow minded, and makes it seem as if the US's sole problem comes out of events in Washington (relating to one party) which I regard as over the top and inaccurate.

Lets be honest, Republicans are for less government spending, they have railed against Quantitative easing and low interests rates due to inflationary concerns.

Their prescription for the lower consumption and unemployment has been lower tax rates (therefore even lower government spending).

In your blurb where you listed where Japan went wrong...well the Republican party is pushing for a lot of those measures.

 

[Rhapsody1447]

Lets be honest, Republicans are for less government spending, they have railed against Quantitative easing and low interests rates due to inflationary concerns.

Their prescription for the lower consumption and unemployment has been lower tax rates (therefore even lower government spending).

In your blurb where you listed where Japan went wrong...well the Republican party is pushing for a lot of those measures.

I think his point is that Krugman was the only one to politicize the debate by blaming the entire problem on the Republican party. None of the other debaters tried to blame one political party.

 

[drz-400]

Lets be honest, Republicans are for less government spending, they have railed against Quantitative easing and low interests rates due to inflationary concerns.

Their prescription for the lower consumption and unemployment has been lower tax rates (therefore even lower government spending).

In your blurb where you listed where Japan went wrong...well the Republican party is pushing for a lot of those measures.

Do you think that the political dysfunction in the US is so large that we will face a lost decade like Japan? That is the key point. I think the magnitude of the problems in the US are much smaller than they were in Japan, despite their similarities. Thus I think Krugman is far too over the top. Krugman is narrow minded in thinking that the US's problems arise soley from the Republican party and Washington's political inaction. Common sense would rather tell you that many of the problems in the US today are from the fallout of the housing bust.

 

[iliveonramen]

Do you think that the political dysfunction in the US is so large that we will face a lost decade like Japan?

That is the view of Krugman. That a large infusion of government spending is needed and barring that we're facing a lost decade. That we're facing long term slumps in global demand.

That is the key point. I think the magnitude of the problems in the US are much smaller than they were in Japan, despite their similarities. Thus I think Krugman is far too over the top.

I read your posts. You have near the same opinion as Summers, that monetary policy is sufficient. If someone has a view that the US economy is facing a lost decade, and that active action is needed by government....then yes Washington gridlock is a major problem. I don't think he's being partisan for the sake of partisanship. He thinks the situation is graver than Summers and thinks the prescription for the problem is government action.

Krugman is narrow minded in thinking that the US's problems arise soley from the Republican party and Washington's political inaction. Common sense would rather tell you that many of the problems in the US today are from the fallout of the housing bust.

He never said that the underlying cause wasnt' the housing bubble. He just believes major action needs to be taken in order to prevent a lost decade. No major action beyond the Fed seems likely therefore he blames the problem on Washington inaction. I don't know why that doesn't seem logical.

Of course I'm sure he'd mention other factors as well but the virtual "wipeout" of millions of Americans household wealth...which was tied to their housing prices is a major problem. Median wages have been stagnant. Either Americans will have to consume at the rate they did during the bubble, or we are facing a long term major problem with depressed demand.

Our two largest trading partners is a protectionists China and a debt laden EU.

 

[conservativeguy]

When did Krugman stop receiving paychecks from Enron?

 

[Ahlevah]

I thought the most critical point of the debate was made by Rosenberg. He said that the economic troubles facing the U.S. now can be traced primarily to the collapse of a housing bubble and debts that we assumed over four decades. That part many people agree on. But he went further by saying that you can't fix problems created from assuming too much debt by adding even more debt. The only way to solve the problem is by extinguishing the debt, either by defaulting on it or paying it off. If I recall, I think he said the American consumer was about $1 trillion into liquidating a debt overhang of $4 trillion. That's why I think any "solution" that doesn't recognize this, like a Keynesian response of fiscal stimulus that involves piling on more debt, is probably not going to work. We always assume we can just reflate our way out of troubles like this. I don't think we can this time.

 

[Rhapsody1447]

I thought the most critical point of the debate was made by Rosenberg. He said that the economic troubles facing the U.S. now can be traced primarily to the collapse of a housing bubble and debts that we assumed over four decades. That part many people agree on. But he went further by saying that you can't fix problems created from assuming too much debt by adding even more debt. The only way to solve the problem is by extinguishing the debt, either by defaulting on it or paying it off. If I recall, I think he said the American consumer was about $1 trillion into liquidating a debt overhang of $4 trillion. That's why I think any "solution" that doesn't recognize this, like a Keynesian response of fiscal stimulus that involves piling on more debt, is probably not going to work. We always assume we can just reflate our way out of troubles like this. I don't think we can this time.

Exactly this. In a period of deleveraging, meaningful growth cannot resume until debts are meaningfully written off or repaid.