Paul Krugman

Paul Krugman @paulkrugman

Good thread, but one question: Why doesn't monetary policy always face this kind of uncertainty? Part of the answer, I'd suggest, is that the Fed has generally tightened too soon, which seems safe but has large hidden costs 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

So are we really sure we want to rush to remove all Covid restrictions? https://t.co/0RXk19XA8d — PolitiTweet.org

Paul Krugman @paulkrugman

Important to understand that this is vandalism; at this point it has probably destroyed more wealth than the whole Black Lives Matter movement, which involved >15 million people 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

So this (photo from NYT) is the "trucker" protest blocking $300 million of trade every day. I only see three semis (did I prove that I'm not a robot?) — and actually not that many people 1/ https://t.co/x3SQWMwwY6 — PolitiTweet.org

Paul Krugman @paulkrugman

Mini-paper here. A lot of assumptions and hand-waving, but two conclusions: this is a pretty big deal for the Canadian economy, and a few thousand protestors may have done as much economic damage as 15 million plus Black Lives Matter demonstrators 2/ https://t.co/HnvypjoUEh — PolitiTweet.org

Paul Krugman @paulkrugman

So, my economic analysis of the Canadian trucking protests, which I argue are like a well-studied subject: import quotas with rent-seeking 1/ https://t.co/3wG3wEAKhr — PolitiTweet.org

Paul Krugman @paulkrugman

"The truck driver protest that started in Ottawa before spreading to shut Canada’s gateway to Detroit and its auto plants appears to be a bit short of one key element: truckers." https://t.co/U84aRBtzFZ — PolitiTweet.org

Paul Krugman @paulkrugman

What the aftermath of the Great Recession teaches us about economic discourse https://t.co/nQ8QUeyF3e — PolitiTweet.org

Paul Krugman @paulkrugman

You forgot to mention that they also hate smoke and mirrors — PolitiTweet.org

Paul Krugman @paulkrugman

So allowing this much damage — and, of course, celebrating it on right-wing media, which portray BLM as destroying civilization — is pretty amazing 9/ — PolitiTweet.org

Paul Krugman @paulkrugman

The thing is, we're talking about a few thousand people, versus millions of BLM demonstrators 8/ https://t.co/oLuWz64v8O — PolitiTweet.org

Paul Krugman @paulkrugman

Not yet in a position to do back-of-the-envelope — don't even have an envelope. But if this goes on for a few weeks, not hard to see loss of production and incomes exceeding BLM damage; in a way not surprising since economic sabotage is the explicit goal 7/ — PolitiTweet.org

Paul Krugman @paulkrugman

And unlike tariff barriers, significant direct waste of resources — fuel, worker hours — as non-demonstrating truckers sit waiting in miles-long lines 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

I don't yet have a number on how much of that trade has been blocked. Also, since the stuff on trucks doesn't disappear, blocked trade ≠ overall economic losses. On the other hand, some disruption of production for lack of parts 5/ https://t.co/D3mfll6MNG — PolitiTweet.org

Paul Krugman @paulkrugman

So, trucking demonstrations have shut down part of US-Canada trade, which was $1.5 billion a day in 2021 and largely moved by truck 4/ https://t.co/lrNw1OIDhk — PolitiTweet.org

Paul Krugman @paulkrugman

Insurers put losses at ~$2 billion, which is 0.01% of GDP but not nothing; maybe additional losses from property damage not covered by insurance and disruption of business 3/ https://t.co/G7aEG6dT6K — PolitiTweet.org

Paul Krugman @paulkrugman

BLM's damage has, of course, been hugely exaggerated by interested parties; I still run into people who imagine that much of Manhattan was turned into smoking rubble. But there were broken windows and other damage 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

So a question I'm pondering: how large are the economic costs from the Canadian trucking protests? (TruckING, not truckER, bc many of them probably aren't truckers) And how do they compare with the Black Lives Matter costs from 2020? 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

And conversely, if you dismiss the Fed's relevance to inflation, in practice you are, whether you know it or not, offering intellectual cover to Joe Manchin 8/ — PolitiTweet.org

Paul Krugman @paulkrugman

What's important to understand right now is that belief in the Fed's ability to curb inflation is, in practice, a progressive position: If the Fed has this, we can dismiss the inflation argument against investing in our future 7/ — PolitiTweet.org

Paul Krugman @paulkrugman

Now, there are some people who imagine themselves to be on the left arguing that monetary policy doesn't work or that rate hikes actually increase inflation; I'd say that's what the MMTers are saying except that they'd surely insist that I just don't get it 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

Unfortunately — as elaborated on in the newsletter later today — there's a popular argument to the effect that government spending is always inflationary; certainly Joe Manchin is using that as an excuse for blocking BBB. So emphasizing the Fed's role ends up being crucial 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

What about fiscal policy? It's not going to be a big factor, partly because even if BBB is salvaged it won't provide a lot of short-term stimulus, partly precisely because the ability to control inflation with monetary policy allows fiscal policy to focus on the long run 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

And if we end up a year or year and a half from now with inflation back to an acceptable level and a Fed funds rate of, say, 200 basis points that will actually be a good outcome: we *want* to get off the zero lower bound so monetary policy can respond to future recessions 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

Given the pace of recent inflation, the Fed is clearly right to raise rates, while keeping an eye on the data for clues about when to stop. Important to realize that this is completely normal: raising rates to cool off an overheated economy is part of the job description 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

I haven't joined in reading the entrails of the latest CPI print or Fed Kremlinology over the pace of rate hikes; someone has to do these things, but not sure I have anything to contribute. I do, however, think it's important to say something more general about Fed policy 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

RT @nytopinion: “I hope people will remember what we almost lost in 2017,” @paulkrugman writes, “and understand that even if Republicans ar… — PolitiTweet.org

Paul Krugman @paulkrugman

Hmm. Actual Canadian truckers say the "grassroots" vaccine protests are largely astroturf https://t.co/Trn3XGS7P1 — PolitiTweet.org

Paul Krugman @paulkrugman

I used to make fun of people who tried to make a big deal over the fact that a large share of hospital spending takes place in the last six months of life (yes, very sick people often die). But this is on a whole other level 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

Siri: Give me the stupidest thing anyone has ever said about health care 1/ https://t.co/gJu0POZ98d — PolitiTweet.org