Paul Krugman Has had an epiphany...

[myrkul]

...too bad it was 10 years too late.

http://www.financialsense.com/contributors/bruce-krasting/on-krugmans-epiphany

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[odolvlobo]

My observation is that when economists discuss economic policy (as opposed to economics itself), they tend to forget everything they learned about economics. They somehow forget that even the simplest economy is an enormously complicated system, and they have no problem boiling it down to a single equation, like Y = C + G + I + X, and assuming everything is constant.

Paul Krugman is the master of self-inflicted ignorance.

[benjamindees]

LOL, I think I'm going to have to take credit for this.  In return, at least, I did learn about Physiocracy.

There's no telling why Krugman missed this.  I don't think he's an actual idiot.  I think he's mostly just a political shill.

Either way, it's not really surprising to me.  Economists don't seem to have the slightest clue about the real world.  Here's a perfect example, from an argument I had several years back with a couple of economists on YouTube.  I just happened to stumble upon it, looking for some of my recent posts on the obsolescence of human labor:

Neither matter nor energy can be created nor destroyed, merely transmuted. They are not depleted.

Yes, that is a real life economist.  And, yes, he thinks that matter and energy cannot be depleted.  Do you see just how screwed we all are?

[myrkul]

Neither matter nor energy can be created nor destroyed, merely transmuted. They are not depleted.

Yes, that is a real life economist.  And, yes, he thinks that matter and energy cannot be depleted.  Do you see just how screwed we all are?

Well, as far as it goes, it is true. But it's really hard to run your economy on nothing but waste heat and ash, ya know?

[marcus_of_augustus]

Neither matter nor energy can be created nor destroyed, merely transmuted. They are not depleted.

Yes, that is a real life economist.  And, yes, he thinks that matter and energy cannot be depleted.  Do you see just how screwed we all are?

Well, as far as it goes, it is true. But it's really hard to run your economy on nothing but waste heat and ash, ya know?

Quite.

Explaining a concept such as thermodynamic entropy to an economist is risking a brain-explosion moment.

[da2ce7]

Neither matter nor energy can be created nor destroyed, merely transmuted. They are not depleted.

Yes, that is a real life economist.  And, yes, he thinks that matter and energy cannot be depleted.  Do you see just how screwed we all are?

Well, as far as it goes, it is true. But it's really hard to run your economy on nothing but waste heat and ash, ya know?

The fed can be thought as a closed system (they print new money, they move the value from one place to another).
No matter how hard they try to create energy, they simply move it from one place to another.  They are simply playing a loosing game.

[organofcorti]

Neither matter nor energy can be created nor destroyed, merely transmuted. They are not depleted.

Yes, that is a real life economist.  And, yes, he thinks that matter and energy cannot be depleted.  Do you see just how screwed we all are?

Well, as far as it goes, it is true. But it's really hard to run your economy on nothing but waste heat and ash, ya know?

This must be the only forum where the possibility of the heat death of an economy is discussed