Economy
Related: About this forumKrugman "Knocked out of Neoclassical Orbit" by Steve Keen's Meteoric Rise!
We knew him when...
Welcome to Capital Account! The internet has been abuzz over the blogosphere boxing match between Nobel Laureate and New York Times columnist Paul Krugman and debunker of economic conventional wisdom and superhero economist, Steve Keen. Remember that game "Mike Tyson's Punch Out?" Well, let's just say that Steve Keen gave Paul Krugman one upper-cut too many for the establishment intellectual to handle. Krugman declared victory and walked away before he could be dealt any more blows to his economic ego -- not before Krugman could land one more low blow though...we'll break it down!
And a too big to fail bank agrees to pay 20 million bucks to settle allegations from regulators that it mishandled customer funds before a major broker's collapse, but the details may surprise you. If you guessed JP Morgan, then you got half of the story right, but if you guessed the broker was MF Global, well, we have news for you: it's Lehman Brothers. That's right, JPMorgan Chase agreed to pay a $20m fine to settle allegations that the bank mishandled Lehman Brothers' customer funds for roughly two years before the broker filed for bankruptcy court protection. The Commodity Futures Trading Commission alleged that JPMorgan, at the request of Lehman, began using customer funds in November 2006 to calculate how much credit it would extend to Lehman Brothers intraday, in violation of customer segregation account rules.
And last Friday we exposed the myth of the billionaire investor/regular joe Warren "All You Can Eat" Buffett's proclaimed desire to be taxed more. Now he's singing a different song...LITERALLY. The owner of the Omaha World-Herald newspaper serenaded a crowd singing I'm just a paper boy. We'll attempt to demystify the oracle's message.
girl gone mad
(20,634 posts)Heck, even his popular trade theory work was thoroughly grounded in the (deeply flawed) neo-classical mainstream. All of his models derive directly from the neo-classical framework. He's worse than your standard neoclassical new-Keynesian synthesis types since he persists in using pre-Keynesian reasoning in so much of his writing, particularly post-crisis.
jeff47
(26,549 posts)Krugman's not neo-classical. Claiming his work is neo-classical is like calling Freedman a Keynesian. You can't go from that and then claim your (or Steve's) analysis is correct.
girl gone mad
(20,634 posts)which I've already responded to.
jeff47
(26,549 posts)You just kept claiming Krugman is in a particular camp of economists he isn't in. And then you (and Steve) go on to demolish the arguments of that camp...which Krugman isn't in.
Fundimentally, Krugman's "critique" is "a lot of your argument doesn't make sense. Please show your work." Then you and Steve declared victory.
girl gone mad
(20,634 posts)I'm just a biased observer.
Are you really trying to make a case that Krugman is a heterodox?
Please. He writes textbooks for the mainstream. He is firmly ensconced in the neoclassical camp.
girl gone mad
(20,634 posts)wherein Krugman snarkily dismisses Keen after having improperly read Keen's comments.
You need to go back further to understand what this fight is actually about.
Here was Keen's original post, which was a critique of a Krugman paper on Minsky and debt deflation. The heart of this battle is over the faulty neo-classical money multiplier model.
Krugman responded here. Pay attention to the push-back Krugman received from his readers. At that point, many other bloggers began to weigh in.
You can find a good summary here.
I don't know what your background is in finance or economics so to describe this simply, the idea that banks are reserve constrained does not hold up under our modern floating rate fiat money system, but many neo-classical economists can't seem to evolve on that point.
snagglepuss
(12,704 posts)cantbeserious
(13,039 posts)eom
bemildred
(90,061 posts)Who writes this crap?
westerebus
(2,976 posts)Could be the Noble Prize committee?