Saturday, July 27, 2013

Krugman on Inequality: Salsa Version.

Prof. Paul Krugman, who doesn't need any introduction, has written a lot about inequality (see here for a brief, partial and already dated overview).

Except from praising inequality, Krugman has adopted pretty much every other position in the spectrum. Starting from the belief that inequality was a statistical curiosity and a matter of individual preferences and morality (back when in 1992), to his own ideas about how inequality influences U.S. politics (in 2002), one could discern a kind of general progression in Krugman's thought on inequality.

Well, one could discern that pattern until Thursday, July 25. That day, from being avowedly anti-Keen, Krugman, commenting on Obama's speech, became a Minskyite:
"The president came down pretty much for what we might call a Stiglitzian view (although it's widely held): debt was driven by rising inequality. The rich were taking an ever-larger share of the pie, but not spending to match, while working Americans took on ever more debt to make ends meet.
"What's the alternative? Minsky"
(See here)
And not just that. Now, inequality is back again to be largely a morality play:
"Personally, I'm more of a Minskyite than a Stiglitzian, although not 100%; although things like subprime lending were, I believe, mainly about forgetting the past, Elizabeth Warren's old work on bankruptcy pretty clearly shows that at least some families took on excess debt as a result of rising inequality. But I'm inherently suspicious of any story that makes economics a morality play".
Reading Prof. Krugman, I can't help but remember the salsa song:

Un pasito pa'lante, un pasito pa'trĂ¡s

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