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I've always believed that a speculative bubble need not lead to a recession, as long as interest rates are cut quickly enough to stimulate alternative investments. But I had to face the fact that speculative bubbles usually are followed by recessions. My excuse has been that this was because the policy makers moved too slowly - that central banks were typically too slow to cut interest rates in the face of a burst bubble, giving the downturn time to build up a lot of momentum.
Paul Krugman -
By rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely.
Paul Krugman
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Evidence and expertise have a well-known liberal bias.
Paul Krugman -
If Europe’s example is any guide, here are the two secrets of coping with expensive oil: own fuel-efficient cars, and don’t drive them too much.
Paul Krugman -
Bad ideas flourish because they are in the interest of powerful groups.
Paul Krugman -
Most people, I suspect, still have in their minds an image of America as the great land of college education, unique in the extent to which higher learning is offered to the population at large. That image used to correspond to reality. But these days young Americans are considerably less likely than young people in many other countries to graduate from college. In fact, we have a college graduation rate that's slightly below the average across all advanced economies.
Paul Krugman -
In fact, I'd say that the sources of the economy's expansion from 2003 to 2007 were, in order, the housing bubble, the war, and - very much in third place - tax cuts.
Paul Krugman -
What saved the economy, and the New Deal, was the enormous public works project known as World War II, which finally provided a fiscal stimulus adequate to the economy’s needs.
Paul Krugman
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What our economy needs is direct job creation by the government and mortgage-debt relief for stressed consumers. What it very much does not need is a transfer of billions of dollars to corporations that have no intention of hiring anyone except more lobbyists.
Paul Krugman -
If you're doing your job right, some substantial group of people [is] going to be mad at you.
Paul Krugman -
I really think that people have to think safety; taking risks for higher yield is a bad idea once you're in late or latish middle age.
Paul Krugman -
Not all private equity people are evil. Only some.
Paul Krugman -
It should be possible to emphasize to students that the level of employment is a macroeconomic issue, depending in the short run on aggregate demand and depending in the long run on the natural rate of unemployment, with microeconomic policies like tariffs having little net effect. Trade policy should be debated in terms of its impact on efficiency, not in terms of phoney numbers about jobs created or lost.
Paul Krugman -
Social Security is a social insurance program - it is not designed to be the same thing as a 401(k).
Paul Krugman
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In America, at least, we have a pretty good record for behaving in a fiscally responsible fashion, with one exception - namely, the fiscal irresponsibility that prevails when, and only when, hard-line conservatives are in power.
Paul Krugman -
The habit of disguising ideology as expertise has created a deficit of legitimacy.
Paul Krugman -
I think Stockman is an interesting sort of amalgam.
Paul Krugman -
If one asks what substantive contributions F. A. Hayek made to our understanding of how the world works, one is left at something of a loss. Were it not for his politics, he would be virtually forgotten.
Paul Krugman -
Now, it’s true that some of the protesters are oddly dressed or have silly-sounding slogans, which is inevitable given the open character of the events. But so what? I, at least, am a lot more offended by the sight of exquisitely tailored plutocrats, who owe their continued wealth to government guarantees, whining that President Obama has said mean things about them than I am by the sight of ragtag young people denouncing consumerism.
Paul Krugman -
What Republicans have actually put on the table is almost nothing. All of the rest is just big talk. So how is the president supposed to negotiate with people who say, 'Here's my demands. By the way, I can't give you any specifics. Just make me happy'?
Paul Krugman
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If you had to explain America's economic success with one word, that word would be "education".... Until now, the results of educational neglect have been gradual - a slow-motion erosion of America's relative position. But things are about to get much worse, as the economic crisis ... deals a severe blow to education across the board.... We need to wake up and realize that one of the keys to our nation's historic success is now a wasting asset. Education made America great; neglect of education can reverse the process.
Paul Krugman -
...as an economics professor I am by nature inclined to the view that the truth isn't out there, it's in here - that usually you learn a lot more by thinking really hard about the data than you do by sniffing around for supposedly inside information.
Paul Krugman -
Outrageous fiscal mendacity is neither historically normal nor bipartisan. It’s a modern Republican thing.
Paul Krugman -
Many people ... prefer to describe themselves as progressives rather than liberals. To some extent that's a response to the decades-long propaganda campaign conducted by movement conservatives, which has been quite successful in making Americans disdain the word liberal but much less successful in reducing support for liberal policies.
Paul Krugman