by Mario Rizzo
Under other circumstances, Paul Krugman would have made an excellent pope if we judge by his economics pronouncements. Let me take two examples from a recent New York Times column. This is my interpretation of what he is saying.
1. On the one hand, as Keynesians have always taught: There is no real danger of interest rates rising as the Treasury accumulates massive amounts of debt. This is because there is a vast surplus of (ex ante) savings out there just waiting to buy US treasuries at low interest rates. This is our official teaching.
2. On the other hand, there are economists out there sowing the seeds of heresies. It is understandable in this time of unprecedented events that even wise economists might be tempted to stray from the Truth. They are making statements that confuse the faithful in their daily activities (of buying and selling treasuries). They are frightening them with stories of inflation and high interest rates. Many, perhaps most, of these teachers have evil motives. These heretics are making it more difficult for the “church” to help us all to salvation.
Read the article yourself. Isn’t this what he is saying?