Friday, January 2, 2015

What Is Paul Krugman Afraid Of?

At year end we always get some coverage in the media about the celebrities that passed away and the big news events of the last year.  Ezra Klein's interview with Paul Krugman is a bit different.  Klein asked him several questions about important things and Krugman did his best to provide short answers to tough questions.

*  He knows what the Silicon Valley crowd claims about the impact of artificial intelligence on society, but he doesn't agree that artificial intelligence will replace human intelligence, and he is not very impressed by the role of high intelligence in society.

* Our current political system is subject to sabotage and it works.  The legislature is capable of sabotaging whatever policies are proposed by the executive branch when the presidency is held by the other party.  Klein suggests that we are capable of responding to crises, but Krugman suggests that it would be very difficult to get Congress to do another version of TARP to rescue a financial system that expects to be bailed out of trouble when it does whatever it can to increase executive compensation.

* There a lots of environmental issues and fracking is one of them.  He believes that it might be possible to do it right, but that the negative impacts of doing it wrong are usually local and do not reach the national level.  Lower oil prices may do what politics can't do.  It can't be cost justified at $60 per barrel.

* Income inequality and wealth inequality are related and there is a relationship between the rising share that is going to the top .01% and the bottom 70%.  Even new college grads find it difficult to find good jobs.  That is bound to create problems that will be difficult to solve.  The wage compression that took place under FDR, and the decades prior to 1980, required exceptional political leadership that was facilitated by a depression and a world war.  That kind of leadership is not visible in either political party.  

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