Krugman: Spend Now, Save Later

[mrstickball]

richardhutnik said:

mrstickball said:

 

Nothing significantly changed at once. It's been a progression of the past 20 years. The reason it changed all of a sudden is that demand was over-saturated. Rad up on Peter Schiff. He predicted the recession well before your bud Krugman even thought there'd be an issue on the horizon.

Peter Schiff's synopsis is that due to rampant consumerism during the 90s and 2000s, prices rose (especially in the housing market) rose to inordinate heights due to bad practices by businesses and government. The reason we have horribad unemployment is that consumer spending is back to where it should be, and there hasn't been enough job creation to get the jobs back.

Again, if you don't want to read up on others that aren't Krugman, then your really going to miss out on a well-rounded economic viewpoint. Schiff is a good place to start, because his synopsis is about an hour long, and easy to understand. I've read Krugman many times. I still read each article he posts. Most of them I disagree with, but I still read him to understand his viewpoint....Yet you argue against learning about someone, simply because his name isn't Krugman.

I would say Schiff is correctly in the ballpark regarding this.   I am not going to squabble of minutia, but I will say wages have been flat since the 1970s actually, with globalistic pressure to drive down wages to some extent, accelerating as time has gone on.  Since 2000 employment growth has also been stagnant, and consumer spending has been at unsustainable levels.

The problem with individuals like Schiff is the monkeys at the typewriter problem.  You have a lot of people like Schiff saying this or that.  It is just that someone afterwords looks right in retrospect.

In regards to deflationary pressure, it is great that prices drop.  However, the downside is nations like America with people who work and have student loans, get squeezed in the process.  The cost to live ends up being far higher.  Expect environmental standards to also get pressured to become more lax like in China, so the quality of life suffers.

Although I do agree that you have the monkeys at a typewriter problem, you should also hear what Schiff has said before, during and after. He's correctly predicted just about every part from 2006-2010. He called the recession 2 years earlier for the exact reasons it did.

Here are a few videos to watch:

http://www.youtube.com/watch?v=2I0QN-FYkpw

http://www.youtube.com/watch?v=EgMclXX5msc

Its good watching.