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Comment by dnautics | Hacker News Reader

If it does, inflation has failed as a policy:

https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...

"in the long run, it’s really, really hard to cut nominal wages. Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis."

Worker pay not keeping up with inflation is not merely an effect of inflation. It is the policy goal.

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Once again, I'd like to understand why "lower unemployment" is more important than people actually being able to make a living.

What is all that employment for if people can't pay their bills from it?

Shifts the balance of power away from labor in favor of business. Puts a thumb on the scale. It is corruption.

In favor of business and also government who has a great degree of control over inflation. The government also benefits a lot from inflation of course, the tax brackets don't change and they have trillions of dollars to spend. Labor doesn't have even a fighting chance.

Great, now you have a job. You can't live with the pay, but at least you have a job. That is something, right?

Spoiler: it's not

Sure it is something, it keeps you busy from making revolution.

Sorry forgot to mention the cui bono must be yourself for that question ;)

This is how you get a labor shortage when a large portion of jobs are literally not worth doing. It was already a joke to work at minumum wage before this.

Smaller European nations did this kinda policies through 60s-90s and it worked fine. Now thanks Euro this kinda lever has closed most of them.

So Krugman's wrong, again. Has he ever been right?

Honestly, I am profoundly in disagreement with Krugman about everything, but that's because he's right about everything, but in wrong ways, usually due to a huge, huge, blind spot at the root. And it's frustrating that he can take people in with his analysis because it's easy to accept his arguments thinking "just hard enough" (which is catnip for lazy intellectuals).

Like for example with the Babysitter's coop. His analysis IS correct, but his remedy is presented as the absolute solution while being oblivious to the fact that the monetary system is based on a total fiction -- that hours are fungible, (e.g. one hour on christmas is equivalent to one hour on September 19, or even that on hour at midnight on a boring day is equilvalent to one hour at 7pm on a boring day). In general, all monetary and social systems are based on fictions, and they will eventually leak their bad abstractions. But I am not sure that Krugman would accept that iron statement.

That’s a good take. I get the impression that some people just take his word because he has a Nobel prize.

Relatedly, do you have on Taleb? Given that Taleb and Krugman seem to have beef.

Paul Krugman is the Malcolm Gladwell of economics.

I'll give him more credit than that (And I don't think Malcolm Gladwell is horrible, either). But their sins are categorically different: Gladwell is a perfectly good summarizer, he just needs to do be a bit less lazy and do a bit more deep research (to avoid detail errors like igonvalues e.g.) Krugman is not by any means lazy, he just expends a lot of intellectual resources without really thinking deeply. Subtle, but different. Actually kind of in a way going into Gladwell it's good to know that he is a shallow generalist, picking and choose lessons from his work and apply critical thinking as appropriate seems to be the natural default mode, it's much easier to take Krugman 'as an authority' and not bother to do the critical work.

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