Rating: 
Summary: Alan Greenspan for us: Herbert Hoover for "them"
Review: A sign of a the first rate economist is wit and readability: a sign of the economic hack is the belief that his prose like his science must be dismal. Galbraith, Keynes and now Krugman are three droll, and first-rate, economic writers.
Run of the mill economic writing is all too often the groaning of economic prohibitions and saws which when groaned from on high by madmen in authority tend to create Panic on Wall Street. Thus Hoover's false idea, that the Depression was somehow caused by the excesses of jazz babies in the 1920s, caused Hoover to apply the standard mustard plasters of his time, higher taxes and higher interest rates, beneath which the wound went septic.
But Krugman's thesis in this book (which was written after the Mexican crisis of 1995 and the Asian crisis of 1998 but before the September 11 recession) is that while Western and developed economies learned not to self-apply Depression era economic sticking plasters, they think it's a great idea for brown men down in the tropics: although Krugman is too polite to say so, contemporary Depression economics is racist economics.
Racism is said to be about discrimination. However, one characteristic of racism is the sloppiness of its racial categories. Standard racism is based systematically on outdated genetics and science in which the racial mark is inherited basically on the say-so of the racist, whose confused mental categories control.
Thus as Krugman shows, when Thailand went into a tailspin in 1998, an interesting crowd of morons with modems and money (who neocon economists flatter as having a collective wisdom that was not on display) decided that although many miles separate Korea from Thailand, both places are kinda woggy and while we're pulling out of Thailand we might as well pull out of Korea, just to be sure.
No single attribute except perhaps a spicy native cuisine united the victims of the Asian meltdown, in which money fled the Kimchi and embraced the bland, the known and the temperate zone.
Australia in this perception is replaced by the symbol of Australia, which is a jolly white man; Thailand is replaced by the sinister, or feckless, Oriental, as if the reality has become an oversimplified computer icon. Crocodile Dundee vs. Ming the Merciless? It??s no contest of the representation has replaced the thing represented.
This is racist economics because the neocon pronouncements, which in the late 1990s denied the madness of crowds, ascribed no collective wisdom to the 80% of Venezuelans who want "government intervention" but cannot vote with money they don't have. Money, that is, talks.
As a result the Depression economics of Herbert Hoover including "hard" money and negative compassion are urged not at home but on the nonwhite areas of the world, as well as "white" areas tarred by racist transitive and associative laws; the transitive law of racial pollution, operating out of sight, infecting ??rational?? economic decisions, and economic guilt by association, sanctified by sanitizing phrases such as ??just business??.
At the time Krugman wrote, Argentina had not been persuaded into the folly of hardening its currency by locking it into the dollar; Argentina went ahead and did so and today is fully part of the Third World as its reward.
Krugman recommends capital controls to those countries subject to racist capital flight. The two-edged aspect of any kind of autarky is that it can isolate the country from the disease as the unconvertability of the Yuan helped China escape crisis in 1998, but also isolate the country from the cure.
However, the leadership of China has learned how to balance autarky with free trade cleverly enough to avoid returning China to the closed system of the Cultural Revolution era with the result that the excitements of shopping replace the excitements of big character poster making. As a result the dragon is leading the tigers out of the wilderness.
Krugman, almost alone among American economists, has a vision ??thing??, and a sense of humor. This is linked with a flexibility that admits that just as no economic gesture, such as free beer, is guaranteed results, the refusal of any one gesture, such as free beer, or something, is itself a gesture, which creates expectations, and thus unintended consequences.
Hayek was right: people do make life plans based on expectations created by government policies, and socialism laid an egg because it did not realize that socialism is a text, that people take seriously, and that alters their planning. Today, neoclassical capitalismus is laying an egg, as Krugman describes, insofar as policymakers?? decision making is narrowed to a set of Politically Correct responses. Because it is narrowed, people plan responses which cancel the effect of the neoclassical policy??for the same reason people plan responses in socialism??s follies, from big character poster making to feeding the oversupplied free beer to the dog.
Krugman gives an excellent example. Countries in the developed world, can always deregulate their currencies during a downturn. This makes their exports more attractive worldwide, and this creates a revival of manufactures and economic activity in general.
Korea and Thailand, on the other hand, find that they can??t devalue, especially by incremental and controlled amounts. This is because deregulation in the developing or merely perceived-as-woggish world is interpreted by millions of moneyed, modem??ed morons as a sign of governmental fecklessness and deeper problems, probably the result of giving free beer on the sly to the poor, or the dog.
Far from making dispassionate judgements, speculators make ideological judgements that the governments in question aren??t toeing the mark. Most speculators (especially the losers, the statistical majority who move their lips when they read) are unlike Keynes economic conservatives who have internalized the texts about hard work and saving that make them alert to its possible absence, and a deregulation becomes, when engaged in by a country with spicy cuisine, a red flag.
As a result, economies in the hot food countries have only Hoover-style ??depression?? economics. Terrorism may be the most tragic result.
Rating:
Summary: Excellent Open Economy Macro reading
Review: Anyone who wants to understand international macroeconomics must read this book. The intuition is superb and the case study approach makes it an exciting read. However, to better appreciate the brilliance of the book, I recommend reading "World Trade and Payments" by Caves, Frankel and Jones. The exposition of the Mundell-Fleming model under various exchange rate regimes and capital control regimes in that book are excellent. Paul Krugman's book reinforces those concepts with case studies.
Rating: 
Summary: How Capitalism can Fail
Review: Despite the simple models taught in Econ 101, our real economic system is extremely complex and intertwined, with a multitude of players of diverse self-interests. It is no surprise then that sometimes this system does not deliver what it promises--better material condition for everyone. System failures in large scale--from currency crisis in emerging markets to stagnation of the huge Japanese economy--are explained in plain English in this book. Krugman has the great ability in using simple parables and models to help readers (and I suspect, he himself too) understand complex situations. Japan's troubles can be understood when we think about the vastly simpler economy of Baby's coop (which members exchange baby-sittings using coupons), for example. Any model is an abstraction and inaccurate representation of the reality. The key to successful modeling is to use the model that captures the salient features of reality which we most concern with. And that's what Krugman excels at. In this book, Krugman does deliver his points that the problems facing Japan, Asian countries with emerging economies, and Brazil can be greatly mitigated with the right monetary policy. My complaint is that he virtually ignores other developmental issues facing many developing economies--education, healthcare, and governance. It's true that those are not the points of this book, but helping the reader step back and get a glimpse of these complex facets of the world will certainly make the book a more accurate representation of reality. Overall, a good and eye-opening read. It gives you a nice description of "one" aspect of the complex socio-economic landscape that affects our lives.
Rating:
Summary: Packed with Knowledge!
Review: Economic scholar Paul R. Krugman investigates the forces that drive economic growth and recession, and makes sense of several complicated issues. His ability to maintain the essence of a topic while simplifying complex economics with examples and analogies is a hallmark of his work. Despite the gloomy title, the book is not depressing because, Krugman concludes, another Great Depression is not looming in our future. Capitalism has, overall, provided the foundation for prosperity in advanced and developing economies alike. Indeed, the information age has introduced entrepreneurs who have generated wealth while becoming romantic heroes for succeeding in spite of giant corporations. However, Krugman stays alert for dark forces, warning us against panic attacks in the international financial markets, where multiplying negative feedback can overwhelm the effects of monetary policy. We from getAbstract recommend Krugman's in-depth analysis to anyone with an interest in world economics and financial markets.
Rating:
Summary: Krugman makes serious analysis fun to read.
Review: From the July/August 1999 issue of FOREIGN AFFAIRS: A sober -- and sobering -- appraisal of the past two years of financial history. The book covers the unstable dynamics of financial crises, highly leveraged hedge funds, Japan's deflation and liquidity trap, and other economic pathologies. Krugman argues that deficient demand, which has not appeared on such a global scale since the 1930s, is again a potential problem. When appropriate, countries should pursue an expansionary monetary and fiscal policy -- to revive the "Keynesian compact," whereby they maintain free markets but provide government-assured adequate aggregate demand. Krugman also usefully reminds us that economics is a set of analytical tools applicable to diverse situations, not a rigid set of universal principles. He concludes that the Japanese government should generate inflationary expectations so that the real interest rate can decline further -- an unorthodox conclusion carefully derived from straightforward economic analysis. He tells his story in clear prose, without the diagrams economists love. Masterful at presenting complex ideas in simple and sometimes whimsical parables and analogies, Krugman makes serious analysis fun to read.
Rating:
Summary: A history of linked liquidity trap dynamics
Review: I like Paul Krugman, having started enough of his books to recognize the ideas which are most familiar to him when he brings them up again. THE RETURN OF DEPRESSION ECONOMICS was published in 1999, when the possibility of something awful like a stock market crash in the United States was still hypothetical, but not fundamentally considered the major concern that would determine the sluggish future of global economic activity as a repeat of the years 1929 to 1941 if a decline in the capitalization values of major enterprises did slow things down a bit. When I started reading this book, I had to wonder if I read it before, but most of the ideas I encountered were easily tied to themes in Krugman's subsequent books and columns that are frequently brought to mind by the large number of daily reports on the financial picture. THE RETURN OF DEPRESSION ECONOMICS attempts to capture the dynamics of speculation in a global economy leading up to July 1, 1997, understood as a situation similar to Latin America in 1995, Japan in the 1990s, but subject to such shocks as the Hong Kong Monetary Authority's ability to use excess dollars to buy local stocks which hedge funds had sold short in order to force the hedge funds to lose money.
"And the reaction was fierce indeed. The government actions were `insane,' thundered Milton Friedman; the Heritage Foundation formally removed the city-state's designation as a bastion of economic freedom; newspapers linked Hong Kong with Malaysia, which had just imposed draconian capital controls." (p. 128).
The key point of view of Krugman might be captured best by his description of the reaction to a speculative attack on Brazil in the fall of 1997, after losing foreign currency at an alarming rate in August. Because interest rates were already high, the economy was sure to slow too much due to an IMF request to raise taxes and cut spending to reduce a deficit which "would actually have been fairly modest had the economy not been depressed and had interest payments not been so high--both of which were in large part consequences precisely of the markets' lack of confidence." (pp. 147-148). Three alternatives for dealing with such a situation have some support from Krugman, who thought a form of stability might be achieved after the Brazilian real was devalued by 8 percent on January 13, 1998.
"January 15: The central bank stops intervening in the markets and lets the real float. The market reaction is surprisingly favorable: the currency drops only 10 percent, much less than pundits expected--and the Brazilian stock market surges an amazing 33 percent, apparently believing that the end of the currency peg will allow the government to cut interest rates and engineer an economic recovery." (p. 149).
Then a bad weekend intervened.
"January 16-17: Brazilian officials fly to Washington and meet with IMF and Treasury officials, who insist that despite the good news on Friday interest rates must be raised, not lowered, to stabilize the currency." (p. 149).
Instead of getting better, the results seemed familiar.
"Indeed, Brazil's crisis had the feel of a recurrent nightmare: once again, as in Mexico, Thailand, Indonesia, and Korea, a seemingly successful economy had gone to Washington in its hour of need, tried its best to follow the plan Washington devised, and been rewarded with a catastrophe." (pp. 150-151).
It is not surprising that Krugman is considered political and extremely one-sided in his point of view, but the idea that an increase in interest rates is likely to bring about a decline in economic activity in whichever country has the greatest need to attract dollars to maintain the basic imbalances in trade and government finance at the root of its economic problems continues to be relevant. Hedge funds borrowing Japanese currency at low interest rates in the years covered by this book are considered a major factor in the big swings in the exchange rate when much of the activity in this book occurred. Looking for irony now in how well China managed to restrict the flow of capital in those years, only to cause major upheaval in the petroleum market today as a result of the growing energy needs of the Chinese economy, might make investors weary of Krugman's concern for those who "have thus far managed to avoid being caught up in the maelstrom--usually because they have not played by the rules. The prime example is, of course, China--corrupt, crony-ridden, with terrible banks, but saved so far by its inconvertible currency." (pp. 151-152). How likely are we to chase China in the wrong direction?
Rating: 
Summary: Zzzzzzzzz
Review: I love Paul Krugman's column in the NY Times, but this book is a bore.
Rating:
Summary: Depression Economics?
Review: Krugman's book was one I terribly enjoyed. Having had to read it for my International Economics class I found it fascinating and it really opened my eyes to some of the shocking realities around me. Having grown up in the 90's when the economy was chugging along, I never expected it to stop. I grew up in a microcosm of excess. Never would I wince at dropping $80 for a pair a jeans I had in several other finishes. I attended a pretigious university at the tune of $30,000 per year without hesitation, thinking the drop in the economy was surely short term and I would be in no tough spot to find a high paying job upon my graduation. Now I have begun to understand that may not be the case, and the economy really never was as great as everyone thought. I think this book is an excellent piece for my generation to examine.
Rating: 
Summary: Krugman is not really fameous
Review: The reviewer ahead of me convered almost everything as to why this guy is horrible. He basically promotes big government----which fail every time------never forget that Bill Clinton did nothing but cause massive massive infaltion by raising taxes to historic levels. Look at home prices vs real income. Every "economist" that reccomends raising taxes is simply not an economist. Economics clearly reccomends lowering taxes to extreme lower elvels as well as the other hidden taxes such as regulation compliance, laws enforcing unions, and publci services from a to z such as tax paid educaiton which is failing and no one can "opt out of". The Perilous Rebirth of JM Keynes, June 23, 1999 Reviewer: A reader
For one reason or another, John Maynard Keynes is still revered as the economist par excellance of the twentieth century, even though his policies of interventionism have been thoroughly discredited. Krugman nevertheless carries Keynes's interventionist torch (a bad metaphor, I know) and advocates a rational economic order. When will clearly smart people realize -- not the least of which Krugman -- that a centrally planned economy can only work during wartime? The benefits of spontaneous market economies, as espoused by Hayek and Von Mises (two of the most obscenely overlooked and underrated minds of the 20th century), have been empirically proven again and again. Krugman makes me believe that we are again, sadly, on the Road to Serfdom. --This text refers to the Hardcover edition
Rating:
Summary: Krugman is not really fameous
Review: The reviewer ahead of me convered almost everything as to why this guy is horrible. He basically promotes big government----which fail every time------never forget that Bill Clinton did nothing but cause massive massive infaltion by raising taxes to historic levels. Look at home prices vs real income. Every "economist" that reccomends raising taxes is simply not an economist. Economics clearly reccomends lowering taxes to extreme lower elvels as well as the other hidden taxes such as regulation compliance, laws enforcing unions, and publci services from a to z such as tax paid educaiton which is failing and no one can "opt out of". The Perilous Rebirth of JM Keynes, June 23, 1999 Reviewer: A reader
For one reason or another, John Maynard Keynes is still revered as the economist par excellance of the twentieth century, even though his policies of interventionism have been thoroughly discredited. Krugman nevertheless carries Keynes's interventionist torch (a bad metaphor, I know) and advocates a rational economic order. When will clearly smart people realize -- not the least of which Krugman -- that a centrally planned economy can only work during wartime? The benefits of spontaneous market economies, as espoused by Hayek and Von Mises (two of the most obscenely overlooked and underrated minds of the 20th century), have been empirically proven again and again. Krugman makes me believe that we are again, sadly, on the Road to Serfdom. --This text refers to the Hardcover edition
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