Subject:
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Two newsbits on the economy...
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Fri, 14 Nov 2003 04:27:15 GMT
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Viewed:
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317 times
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The Professor Takes the Gloves Off
http://alternet.org/print.html?StoryID=17169
Krugman: Also, you might say that Bush has some un-earned credits from the
responsibility of his predecessors. In the past, U.S. presidents have always in
the end done enough of the right thing so that the solvency of the government
was never at stake. And it comes back to this denial that I talk about. People
can’t believe that we’re dealing with something completely different now, but we
are.
McNally: Let me get this straight. You’re not saying that we will actually go
bankrupt, but that we are too dependent on foreign investors and at some point,
they’ll say: “You know what, I’m putting my money elsewhere.”
Krugman: Well, in fact, that does produce something that looks like bankruptcy.
When you have a huge debt, not only do you have to pay interest on it, but you
have to keep rolling it over. The point comes when investors say: “I don’t trust
these Americans. They don’t seem to be responsible.” Then all of a sudden you
cannot raise the money to service the debt when it comes due.
edit: before you dismiss the whole piece as nonsense -- The Economist has also
subtley been making points very like this for some time. Many may well see the
U.S. as simply too prone to risk and corporate looting to be a good investment.
It’s not a joke -- we are in *IT* deep!
I didn’t know anything about Krugman before this piece. I mean, I have read
his column, agreed with him, and even quoted him here -- but I didn’t fully
understand his credentials. What gets me is that I feel almost exactly the same
way as he does, and we appear to share ideals and ideas.
My ideal of the free market has been betrayed -- not by the ideal itself, but
by the distortions that politics as usual can work upon that ideal. Given the
current state of politics, the free market is actually a fiction -- consequently
it doesn’t work. I think Krugman found this out too. I think The Economist
found it out a while ago, but keeps trying to readdress the fiction to help
inform would-be investors. That’s the way I see it.
An Object Lesson in Investing
http://alternet.org/print.html?StoryID=17170
edit: I just thought this was a pretty good description of the game even if the
game is not always the case, and even if the details are not 100% perfect. This
is still at least 95% reality as is...
-- Hop-Frog
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