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110 sats \ 12 replies \ @Undisciplined 5 Jan \ parent \ on: China Loosing Against USA econ
There was actually a time when Krugman was a real economist, rather than the partisan shill he has become.
The incentives for the financial press and brokers can be pretty perverse. If they have assets they want to get out of, it benefits them to hype those up. Same for downplaying assets they want to buy. Some of that gets fixed with reputation costs, but not all of it.
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Just stumbled across this.
https://www.bloomberg.com/graphics/2015-krugman-battles-austerians/
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I've long said that we're on the dumbest timeline.
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He started out as a trade theorist, before becoming a partisan macro pundit. Modern trade theory isn't exactly Austrian, but it also generally avoids much of the mainstream macro stuff.
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MMT, as I recall, is along the lines of, you don't need supply and demand when you can pull levers to stimulate growth through credit expansion. Growth becomes the ultimate pursuit. Growth at all costs. I'm way out of my depth when entering into the econ arena, so it's probably a gross simplification.
Interesting what you said about the way brokers operate. I wonder whether the fintech brokers did anything more significant other than luring in a greater swathe of the public to lose their shorts. I remember there was the the Reddit subs causing problems for the more institutional broker class, but like everything that's not self-custodial, the rules get changed.
Seems the growth model is the dumbest of timelines. You get economies on steroids, undercutting, channel-stuffing and dumping low quality everything and pricing out local markets. Not that I'm against market efficiencies offered by technological innovation. Just in reality, I don't get Krugman's defense of MMT.
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I don't follow Krugman very closely, because I don't think he's worth listening to, but I don't think he is an MMT guy. There are fine distinctions between the various bogus schools of macro economists that they view as being quite important.
True economic growth is a noble pursuit. That would be equivalent to a rising standard of living. The problem is that they view a fictional aggregate called GDP, that has well-known uncontested flaws, as being an almost perfect proxy for the economy. That leads to trying to maximize the things that are in GDP, which can come at the even greater expense of what's not in GDP.
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Perhaps the distinction is not often appreciated, as you say. Indeed GDP, or GDP per capita, seems skewed in it's ability to gauge the health of an economy or society.
I thought it interesting that economists obviously realized this, and so, cargo volume, and electricity consumption would become main indicators, verified accurately from satellite imaging. Then there's opaque reporting of data from a statistics bureau. I imagine ballooning bank loans and credit expansion are lagging indicators.
Interesting. I think we could probably go econ101 all Friday night.
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If they have assets they want to get out of
Interesting. For some reason, I tend to forget about that. Guess it's my lack of trading acumen.
Same for downplaying assets they want to buy
That line, when the tide goes out, you see who's not not wearing their shorts, or something similar, stays in my mind.
Fair enough for Krugman. I trust you know more about his origins than I.
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The first point is a problem middle class people often have with brokers. Brokers prioritize their wealthy clients, so when they advise them to sell off some stock, the easiest group to sell it to is their poorer clients.
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Agree! All media, including financial, is broken as the incentives are askew
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How do you think that gets fixed (if it can be)?
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You know the answer... Bitcoin fixes incentives!
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