Monday, May 14, 2012

Michael Hudson - Paul Krugman’s Economic Blinders

Mr. Krugman has gotten censorial regarding the debt issue over the last month or so. In last Friday’s New York Times column he wrote: “Every time some self-important politician or pundit starts going on about how deficits are a burden on the next generation, remember that the biggest problem facing young Americans today isn’t the future burden of debt.”[1]  Failure to see today’s economic problem as one of debt deflation means a failure to recognize the need for debt writedowns, restructuring the banking and financial system, and shift taxes off labor back onto property, economic rent and asset-price (“capital”) gains. The effect is to defend the status quo – and to me, that makes Mr. Krugman a conservative. I see little in his logic that would oppose Rubinomics, which has remained the Democratic Party’s program under the Obama administration.
Read it at  Steve Keen's Debtwatch
Paul Krugman’s Economic Blinders
By Michael Hudson

Hudson is discussing the above issues in light of Krugman’s new book. On Twitter the past couple days people have been offering up responses to #WhyImALibertarian. My partial answer is because both political parties appear determined to largely defend the status quo. Rubinomics has played just as significant a role in creating income inequality over the past 30 years as Reaganomics. Choosing between these two options will not offer any long-lasting solutions to our underlying economic troubles.  

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