We all owe Paul Krugman a huge debt for his many years of:
- Applying Keynes’ economic framework objectively, and
- Calling out delusions & lies of the many VSPs who failed to do this.
In Krugman’s recent disagreements with Bernie Sanders, however, we are reminded that Krugman’s strong point is not any special ability to appreciate the speed and/or importance of changes like the following:
Updated John Maynard Keynes:
In the long run another two Presidential cycles we are all past the deadline for avoiding climate catastrophe.
Updated Paul Krugman:
What the European American establishment may not have realized, however, is that its ability to define the limits of discourse rests on the perception that it knows what it is doing. ...
And there’s nothing quite like sustained poor economic performance ... to undermine the elite’s reputation for competence
Inserting emphasis on “...politics” makes clear the relevance of George Soros:
… in social sciences [including politics] … particularly in economics [and politics]…
… participants’ views and the actual state of affairs enter into a process of dynamic disequilibrium which may be mutually self-reinforcing at first, moving both thinking and reality in a certain direction, but is bound to become unsustainable in the long run and engender a move in the opposite direction…
… we can observe … two far-from-equilibrium conditions, one of apparent changelessness, in which thinking and reality are very far apart and show no tendency to converge, and one of revolutionary change in which the actual situation is so novel and unexpected and changing so rapidly that the participants’ views cannot keep up with it.
...examples [re-sequenced]...
… the banking industry in the United States. After the breakdown of the banking system in the Great Depression, it became closely regulated and very rigid; but when the restrictions were relaxed, the industry swung to the other extreme and entered a period of revolutionary change ...
...Reagan’s Imperial Circle … consisted of financing a massive armaments program with money borrowed from abroad, particularly from Japan. … the process was initially self-reinforcing but it was bound to become unsustainable...
… in the Soviet Union… During Stalin’s time, reality and dogma were very far apart, but … both of them were very rigid and showed no tendency to come together. Indeed, the divergence increased with the passage of time. When the system finally collapsed, people could not cope with the pace of change and events spun out of control.