Ep. 200 Krugman on Bonds & Uncertainty: Interesting, But Still Wrong

10 August 2019     |     Tom Woods     |     5

Bob minds the store and explains what is interesting about Krugman’s discussion on bonds vs. stocks as ways to forecast recession, how an inverted yield curve signals problems, and the precise way that Trump could be depressing investment. Yet even though these abstract discussions are instructive, Bob argues that they don’t really work in the cases where Krugman deploys them.

Krugman Column

Tariff Tantrums and Recession Risks” (August 7, 2019)

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  • ProfessorBernardoDeLaPaz

    I see a trend emerging.
    May we safely infer that the 200th Contra Cruise will ALSO be Tom-free?

  • Matthew Tanous

    It seems to me that Krugman is simply wrong that protectionism can’t cause a recession. Sure, in the long run businesses adjust, but if – hypothetically – the price of steel rises 25% due to tariff barriers and less efficient domestic production, that is going to require a major adjustment in the capital structure of the economy. Workers that produce goods using steel would necessarily be laid off and have to find other jobs. The tariff cannot change all prices in the economy by the same amount.

    It seems only an economic model that ignores the existence of the capital structure (*cough* non-Austrian *cough*) could even consider that tariffs would not cause a necessary reallocation of major sectors of the economy.

  • Marxamillion

    If indeed you guys truly read these comments, would you please address Steve Keen’s brand of MMT, either here on your show or on Tom’s? Thanks

  • will

    Regarding the question directed at the other side: why doesn’t the producer just raise his prices now if he can so easily pass on a tax to a consumer? simple answer: because a competitor would under cut him. But when taxes go up uniformly in the industry, then he can raise prices without having to worry much about competition because costs have gone up for everyone.

    Just saying – it seems like there’s an easy out to the question.

  • Lando Calvinian

    Will there be a podcast on Krugman’s “China Tries to Teach Trump Economics”? I know Bob and Tom spend their time refuting Krugman, but there might be some agreement on this subject.