Why NYT Columnist Paul Krugman Is Mostly Right
By Shareholders Unite:Seeking Alpha contributor Michael T. Snyder wrote an article titled Why 'New York Times' Economist Paul Krugman Is Partly Right But Mostly Wrong. Let's go through the arguments one by one.
The false prosperity that the United States and Europe have been enjoying has been fueled by unprecedented amounts of debt. [Snyder]
There is no economic concept called 'false' prosperity. Yes, household borrowing has increased enormously, but this is private debt, and the result of private decisions. Many people still have to wake up to the fact that the collective outcome of private decisions don't always lead to a social optimum. Markets can fail as well.We have argued that the run-up of the household debt is largely the result of stagnating median wages (median wage earners have enjoyed very little of the benefits of increased labor productivity since the 1970s), which resulted in increased credit demand toComplete Story »