After the man stormed out of the store, the clerk, a store owner's daughter who was left shaken, told us that the store had been giving money to the homeless man for many years. It turns that that day she had not gone to the bank to change the big bills yet. This was the first time that the store had not given him any money.
This is how I learned that giving someone money would not solve their problems but would instead create an obligation for the giver. I also learned that having good intentions was not enough.
Over the years, I resisted giving money to the many people who beg the streets of Mexico, where I grew up. I was therefore called heartless by many friends whose opinion I valued. It did not matter that I had supported many projects aimed at helping people learn to do better by themselves instead. It was difficult to follow my convictions with so much pressure but it was a matter of integrity; I had to do it!.
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I was therefore turned off by his seeming lack of integrity and a deep emotional insecurity expressed through an obvious desire to be liked by everyone. I rather prefer personal character and a strong conviction, even when I may disagree with the ideas.
As someone with background in engineering and scientific research, I have very little tolerance for those who claim to have mathematical or scientific evidence but who have not applied sufficient rigor to their process. In such cases, I would be much happier if the claims were described as a thesis instead. For example, Mr. Krugman builds his position that government spending will get us out of the recession on a very small sample of correlated data. Just like the Quants who developed the mathematical models that could not see risk in housing derivatives because of only using recent data, Mr. Krugman did not address any of the historic evidence for or against his ideas from before the 1900's; no Rome or Spain. Against claims that promoting business activity would be equal or more effective than government spending, he offered thin arguments. He focused on a single aspect of business incentives: lower taxes. He completely ignored the universe of other possibilities. Moreover, he never described extreme historic examples of too much or no government spending during recessions.
I should probably mention that any true scientific test must include evaluations of opposite or inverse scenarios. Here again, he omitted describing how government spending by the USSR's leadership failed to lift the union's economic collapse during the eighties. A sound evaluation would had then compared the USSR's investments during the 80's with that of China's during the last decade. It would had served as a good variable-canceling pair since both were centrally managed. In such case, the difference was that China promoted private business activity while the USSR did not.
Liquidity Trap. A Liquidity Trap happens when additional injections of capital into the financial markets by central banks betray traditional expectations by failing to stimulate the economy. This seems to only take place during deep recessions. It is clear from the way that this phenomenon is defined that it is happening right now and that it offers a better explanation than those from the many economists who have failed to predict results since 2009.
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On the other hand, the idea of a Liquidity Trap could just as well support the ideas put forth by Edward Conard in Unintended Consequences. Mr. Conard describes how capital can act in either of two fashions: risk-averse or patient. The idea that excess risk-adverse capital is inappropriate when trying to fundamentally rebuild the economy could easily fit the concept of a Liquidity Trap if the excess liquidity happens to be risk adverse. It would also contradict Krugman's suggestion that investment by governments is the only alternative; lowering economic risk expectations could promote deployment of patient capital by business. Even Mr. Krugman had a hard time arguing in his book that government investments were effective enough to merit consideration. He had to rely on correlations; something that earlier he discredited.
In a nut shell, if you do read the book, focus on the concept of Liquidity Trap. Do let me warn you, though, that the road there is paved with lots of religious rhetoric. So you may better spend your time and money studying the concept of Liquidity Trap through other sources. On my part, I was so frustrated with the cumbaya that I almost dropped the book right in the middle of reading it. In my opinion, it could have been better written as a brochure on the concept of Liquidity Trap rather than a book on Krugman's religious beliefs on economics.
Book Title: End This Depression Now!
Author: Paul Krugman
Publisher: W. W. Norton & Company