Paul Krugman posted a thought piece yesterday saying that Trump is a candidate that “Putin is aiding because he knows Trump is close to, probably financially entangled with friendly oligarchs.” Seriously? The use of popular cant verbiage detracts from one’s believability a bit, but when Putin was asked if he was “aiding Trump” he didn’t even bother to answer, merely laughed in the reporter’s face.
Krugman goes on to say that this controversy about Putin aiding Trump is timely because it is “dovetailing with my bedtime reading,” which is about the Roman Empire. I’m not sure what foreign leaders were nefariously aiding the Roman emperors in their bids for power, but…
To dovetail with my bedtime reading we would have to have combat troops actively engaged at brigade strength in Columbia, so… Who knows? Maybe we do.
Anyway, he compares Trump’s claim of making NATO allies pay their fair share of the cost of common defense, which Krugman describes as “a protection racket, in which countries get defended only if they pay up,” to the Roman Empire’s looting and sacking which, even for an economist, is quite a stretch.
Dean Baker says, also yesterday, that “Glass-Steagall would not have prevented the economic crisis in 2008. The problem was allowing a massive housing bubble to grow unchecked.” The first is debatable, while the second is utter bullshit.
The housing bubble was a symptom to begin with; the real problem being far too much wealth accumulating with no place available to invest it at reasonable rates of return due to the Fed’s low interest rates. That wealth was the fodder for those loans, and the failure to repay those loans was merely the trigger for the collapse.
The meat of the collapse was not the housing loan money itself, but a huge pyramid of “funny money” financial instruments that had been sold based on those mortgage loans and which had face values orders of magnitude larger than those loans.
And because Glass-Steagall had been repealed, money in deposit banks was available for the purchase of these “funny money” financial instruments. Would the collapse have happened without the money which came from the deposit banks? Possibly, but it would have been much less severe.
Economics is not actually a science. It is a profession that allows you to just make up shit as you go along.