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A New York Times best-selling call to arms from Nobel Prize–winning economist Paul Krugman.
The Great Recession is more than four years old—and counting. Yet, as Paul Krugman points out in this powerful volley, "Nations rich in resources, talent, and knowledge—all the ingredients for prosperity and a decent standard of living for all—remain in a state of intense pain."
How bad have things gotten? How did we get stuck in what now can only be called a depression? And above all, how do we free ourselves? Krugman pursues these questions with his characteristic lucidity and insight. He has a powerful message for anyone who has suffered over these past four years—a quick, strong recovery is just one step away, if our leaders can find the "intellectual clarity and political will" to end this depression now.
Introduction: What Do We Do Now? ix
1 How Bad Things Are 3
2 Depression Economics 21
3 The Minsky Moment 41
4 Bankers Gone Wild 54
5 The Second Gilded Age 71
6 Dark Age Economics 91
7 Anatomy of an Inadequate Response 109
8 But What about the Deficit? 130
9 Inflation: The Phantom Menace 150
10 Eurodämmerung 166
11 Austerians 188
12 What It Will Take 208
13 End This Depression! 223
Postscript: What Do We Really Know about the Effects of Government Spending? 231
Acknowledgments 239
Index 241
boar_d_laze
Posted May 4, 2012
Throughout his career, Krugman has been a very good economic historian, diagnostician and prognosticator. He has an excellent command of the facts and is right far more often than middle ground economists who seek who have moved towards the disproven (by their results) "middle ground" economic policies of austerity and away from the proven principles of stimulus which I guess you could call Neo Keynsian Revivalism.
If you love the economics of the GOP, you'll hate this book. If you love the economics espoused by the leaders of the current Democratic party, you won't be much happier. Tough.
Highly recommended.
17 out of 20 people found this review helpful.
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Posted May 17, 2012
Why does the Nook version cost more than $3 more than the Kindle edition?
11 out of 17 people found this review helpful.
Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.Nobel prize-winning economist Paul Krugman clearly explains why normal economic policies do not work in a depression/recession and why government fiscal stimulus is required to get the economy moving again. He challenges the economists who have been wrong every step of the way for the past 30 years and suggests we instead return to the policies that worked so well from the 1930s to the 1970s.
11 out of 13 people found this review helpful.
Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.End This Depression Now by Paul Krugman Nobel Laureate in Economics
Paul Krugman presents evidence that to end this fiscal recession--which he calls depression because of lack of jobs and that is going on on four years and an increase in income inequality--we need new fiscal policies. A fiscal stimulus that helps the economy to add jobs--contrary to what some people will say, the first stimulus did not work because it was not strong enough--and that to reduce the deficit lowers growth, especially in the near term.
The Book specifically discusses two different and opposing points of view: the first, preached by John Maynard Keynes’ 1936 work, General Theory of Employment, Interest and Money
“The outstanding faults of economic society in which we live are its failure to provide for full employment and its arbitrary an inequitable distribution of wealth and incomes.” John Maynard Keynes’ General Theory of Employment, Interest and Money
Although income inequality is hard to solve, unemployment is not. Krugman cites the example of the US entry into WWII where a burst of federal spending cause a 7% rise in the total number of jobs in America. The equivalent of adding more than 10 million jobs today. Krugman supports his beliefs in this policy by the Paul Samuelson textbook, Economics first published in 1948 which brought Keynesian economics to American colleges.
The second opposing theory is championed by Milton Friedman. Friedman's challenges to what he later called "naive Keynesian" (as opposed to New Keynesian) theory began with his 1950s reinterpretation of the consumption function, and he became the main advocate opposing activist Keynesian government policies. In the late 1960s he described his own approach (along with all of mainstream economics) as using "Keynesian language and apparatus" yet rejecting its "initial" conclusions. During the 1960s he promoted an alternative macroeconomic policy known as "monetarism". He theorized there existed a “natural” rate of unemployment, and argued that governments could increase employment above this rate (e.g., by increasing aggregate demand) only at the risk of causing inflation to accelerate. He argued that the Phillips curve was not stable and predicted what would come to be known as stagflation (high unemployment with high inflation). Friedman argued that, given the existence of the Federal Reserve, a constant small expansion of the money supply was the only wise policy. This obviously was proven wrong at The Clinton Administration.
The mess we’re in now--his great depression--was caused by several acts of Congress. Carter aided to the problem in 1980 when he passed the Monetary Control Act, which ended regulations that prevented banks on many kinds of deposits. Reagan gave the another blow with the Garn-St. Germain Act of 1982, which relaxed restrictions on the kinds of loans banks could make. And finally, the dissolution of the Glass-Seagal Act of 1933 which was overturned by Congress in 1999 under President Clinton so that Citibank and Travelers could merge--which was illegal until then, because banks could not use depositors money to invest in the market.
The result was an increasingly unregulated system in which banks were free to give in fully to the overconfidence that the quiet period had created. Debt soared, risks multiplied, and then, the housing bubble burst and brought the system down.
Mr Krugman then walks us, in plain and easy language, to the way forward. “Our priority must be to get ourselves back on the path to growth; every day that we lag behind normal production levels only adds to the astronomical economic loss of this depression.” What we need for rapid, powerful recovery is precisely what got us out of The Great Depression--a burst of government spending to jump-start the economy. “...your spending is my income.”
Arguing both sides of the economic policies: Keynes’ 1936 work, General Theory of Employment, Interest and Money and Milton Friedman’s ideas which are causing European economies to be austere and depressed growth (and we know how bad that is going), Friedman talks about inflation, the deficit, deregulation. Friedman addresses them head-on until he crushes his opponents and delivers the knockout blow.
I think this is a must read for everyone who wants to make a difference in the 2012 Presidential election.
6 out of 7 people found this review helpful.
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Posted June 12, 2012
I find that Krugman has destroyed some of my false ideas of the current economy.
I wish I would have got the book in paper.
6 out of 7 people found this review helpful.
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Posted May 31, 2012
This book is a political hot button issue, so I will try to leave politics out of the review. The book is well written, so even someone with little understanding of economics should understand Dr. Krugman's position. The author is a liberal (I am not). Since I went into reading this book with the assumption that government spending should increase during a depression, I did not find his position built on Keynesian economics all that controversial. I tend to prefer nonfiction authors to be a bit detached from their subject, so my only criticism is that Dr. Krugman can get a bit whiney and unkind to his critics.
6 out of 7 people found this review helpful.
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Posted October 3, 2012
His assumptions are so easily countered he had to disable online comments for his postings at the NYT, Because people kept offering rational proofs against his pedantic spend more ideas. This book is just more of the same. Print is good for him because no one can comment on the bad ideas in the book.
3 out of 8 people found this review helpful.
Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.Krugman present a clear explanation why the current financial crisis is a depression, not a typical business cycle recession and how monetary policy alone is insufficient to support a full economic recovery. His arguments including economic data, but aren't overly technically. Regular readers of Krugman's columns and/or blogs will be familar with the concepts and arguments presented (Zero-bounded interest rates, the confidence fairy, the myth of expansionive austerity). However, the book provides a cogent and ordered summary of how the US and European economies got into this depression, what it will take to revive our economy, and the high human and economic cost of continued inaction.
3 out of 3 people found this review helpful.
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Posted December 1, 2012
This guy knows what he is writing about. I agree with him philosophically but learned so much more.
2 out of 2 people found this review helpful.
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Posted October 10, 2012
This nobel prize winning economist provides an in-depth, but somewhat biased view of americas current economic and political situation; starting from housing bubbles in real estate and eventually to collapsing interest rates, shadow market politics, and the governments play in all this, all eloquently laid out in a riveting (yet somewhat technical) piece of literature. Overall this is a must read book for anyone who who wants to get informed on why the recession is still around and, if accepting to krugmans wisdom, learn about a possible solution.
2 out of 2 people found this review helpful.
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Posted June 16, 2012
This is a great book, but I would like to use this forum to complain about the terrible customer service that Barnes & Noble offers. I've had two interactions with phone reps on the 800 line, and the first one I was put on hold three times, only to have the rep hang up on me before she got back after the third time. My second rep was more attentive, but it still took me and hour and a half to fix the problem that I couldn't get my Nook to start.
2 out of 15 people found this review helpful.
Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.Paul Krugman's book "End This Depression Now!" clearly explains the economic disparity the United States is currently undergoing and what how it has effected other countries in particular Europe.
He explains in a very simplified manner the functions of the federal reserve, and its significance, in helping to alleviate the situation along with what the federal government should do as well as what it should not have done.
I have taken away a small amount of economic terms that are defined throughout. This means, for other interested readers, that you do not have to have a background in economics to understand the reading. But for those that do have a background, you will be rewarded with a goldmine of information.
What I appreciate about the author is his ability to talk to the "99%" in layman's terms.
Paul Krugman is now one of my favorite book authors.
1 out of 1 people found this review helpful.
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Posted June 13, 2012
Need to have more on the topic of what works rather than what pundits and politicians say!
1 out of 2 people found this review helpful.
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Posted May 22, 2012
Just read
1 out of 3 people found this review helpful.
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Posted March 17, 2013
You abandoned me!
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Posted February 17, 2013
Exceptional book. Explains the current situation very clearly.
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Posted July 30, 2012
I Also Recommend:
Paul Krugman is a best-selling author, columnist, and blogger for the New York Times, and a professor of economics and international affairs at Princeton University. He also received the 2008 Nobel Prize in Economics.
Rather than asking how the crisis happened, he asks the practical question, what do we do now? He argues that the economics (but not the politics) of recovery is easy. He urges, “spend more, and both real GDP and employment will rise.”
But instead the Coalition wants to cut the deficit. It refuses to spend more, so destroying the economy and jobs. It calls this ‘austerity policy’, when it is actually poverty policy.
The International Monetary Fund studied 173 recent cases of ‘austerity’ policy and found that “austerity policies were followed by economic contraction and higher unemployment.” So poverty policy causes poverty and destroys jobs - well, whatever next?
The euro embodies this poverty policy. Within the euro, countries must prioritise cutting their deficits; they are ordered not to spend their way out of the crisis. Worse, the euro caused the crisis in the EU. The EU claimed that the euro would prevent ‘asymmetric shocks’, but as Krugman points out, “What actually happened, however, was the mother of all asymmetric shocks. And it was the creation of the euro itself that caused it.”
Krugman explains that the euro ended the premiums that investors had demanded to compensate for the risks of devaluation and default, so Spanish, Italian and Greek debts were seen as almost as safe as German debt. This cut southern Europe’s borrowing costs, causing huge housing booms which became huge housing bubbles. Local banks did not have enough funds to back all this lending, so they borrowed from other banks, German, French and British, spreading the debts and the risks.
The hard part of ending the slump is political. Prioritising deficit reduction serves the interests of creditors, those who lend money, that is, those who have capital. Capitalists gain from the slump, so they don’t want to end it.
Dirigo_Douglas_of_Maine
Posted July 23, 2012
Krugman has made complex macroeconomic theory and policy easy to understand - even a member of Congress could understand these principles.
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Posted June 25, 2012
*A full executive-style summary of this book is now available at newbooksinbrief dot wordpress dot com Since the housing and financial crash of 2008, America's economy has been stuck deep in the doldrums. Indeed, GDP has remained well beneath pre-2008 levels, and employment levels have failed to recover. In an effort to resuscitate the economy, the American government tried first to jump-start it through stimulus spending, and has now replaced this approach with greater austerity. Nothing seems to be working. For Nobel Prize winning economist Paul Krugman, though, the answer is clear: the problem is that the original stimulus effort was too small, and, since that time, the government is moving squarely in the wrong direction. Indeed, Krugman argues that America's current situation bares a striking resemblance to the stagnation of the Great Depression, and that history has taught us what to do in such situations: the government must take an aggressive approach to stimulate the economy into recovery. This is the argument that Krugman makes in his new book `End This Depression Now!'. Now, Krugman is not a proponent of big government spending under normal conditions. Indeed, even in a recession, Krugman's preferred approach is to drop interest rates in order to spur consumer spending. The problem now is that interest rates are already at zero, and this has not been enough to get consumer spending off the ground, thus leaving the economy in what is called a `liquidity trap'. For Krugman, the liquidity trap is actually quite common in economic downturns that follow financial crashes (as is the case with the current one, and as was the case with the Great Depression), and is why such slumps tend to be deep and prolonged. According to Krugman, the best and surest way to save an economy from a liquidity trap is for the government to step in and undertake the spending that consumers won't. That is, the government must stimulate the economy back into action, until consumers can get back on their feet enough to take over for themselves. For Krugman, this is precisely what happened in America during WWII, when the government's military spending served to stimulate the economy and save it from the grips of the Great Depression. Now, Krugman's opponents will point out that the American government has already tried the stimulus approach during this downturn, and that this approach did not work, thus showing that it cannot be relied upon. What's more, these same opponents argue that the government's debt is already enormous, and indeed dangerously high, and that further government spending at this point may well render the debt completely unmanageable, if not force the government into insolvency (which is a threat currently being faced by several countries in Europe). Finally, Krugman's detractors maintain that pumping more money into the economy at this time only threatens to drive up inflation to dangerous levels, perhaps even triggering a hyperinflationary spiral. Krugman, though, claims that he has answers to all of these objections. Krugman does bring up some important points that do deserve to be taken into consideration in the current economic debate. However, whether his arguments are strong enough to assuage the fears over the negative consequences that additional stimulus could provoke remains to be seen. A comprehensive summary of the main arguments in the book is now available at newbooksinbrief dot wordpress dot com.
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Posted June 3, 2012
* her eyes widen and she smiles she takes his hand and leads him to result 13*
0 out of 7 people found this review helpful.
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Overview
A New York Times best-selling call to arms from Nobel Prize–winning economist Paul Krugman.
The Great Recession is more than four years old—and counting. Yet, as Paul Krugman points out in this powerful volley, "Nations rich in resources, talent, and knowledge—all the ingredients for prosperity and a decent standard of living for all—remain in a state of intense pain."
How bad have things gotten? How did we ...