RichardH sent out an email with some links to Paul Krugman’s delivery of a London School of Economics lecture series.

Part I--The Sum of All Fears
Audio: http://tinyurl.com/kj43gf
Slides (pdf): http://tinyurl.com/n6gevo

Part II--The Eschatology of Lost Decades
Audio:  http://tinyurl.com/mjvq65
Slides (pdf):  http://tinyurl.com/lcavs7

Part III--The Night They Reread Minsky
Audio:  http://tinyurl.com/m4hww2
Slides (pdf):  http://tinyurl.com/m92wpj

I was able to open the audio in one browser window and look at the slides in another browser window.  After hearing Part I, this was my feedback to RichardH.

I am beginning to think that Taleb was right about Nobel Prize winning economists, but not only for the reason he talks about.

I am surprised that I seem to know more about what is going on than Krugman does in some respects.

Apparently he, along with Samuelson, lost faith in Keynes with the rise of Milton Friedman. Only now is he realizing what I knew all along. Keynes analysis was applicable at the time to the conditions at the time. When those conditions are far from what you need to apply his reasoning, then you are in a different regime where different forces dominate. The famous caveat to all simplified economics – “everything else remaining the same”.

Well everything else did not remain the same. Why is it such a surprise that when the conditions did go back to the ones during Keynes’ time that the prevailing balance of forces would return to what he analyzed?

I am listening to the first question asked of Krugman about the falling world trade. Both he and the questioner agree that there is no tightening of free trade and other explanations are also missing. Krugman appears to be lost for any explanation until he finally gets around to the fact that people are buying less stuff because we are near a depression. Well, duh?

Do the succeeding lectures get beyond the obvious? Maybe Krugman should sit in the audience and let me explain the facts of life to him.

Unlike the black swan of Taleb, these extreme happenings that surprise Krugman so much have happened before during the lifetime of a few people who are still alive. We have books, for goodness sakes, that record history. This history surely can’t have been forgotten so easily by Nobel prize winning economists. Apparently, I believe in the scholarship of major thinkers too much.

Krugman had the brilliant insight during the lecture that when the economy has a lot of slack and you can’t keep your factories and stores busy, you are unlikely to want to invest in more of these items. To this I also say, well, duh? Do I really need a Princeton professor to tell me this?