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STOCKHOLM, Sweden -- Nobel economics prize winner Paul Krugman said Sunday that the beleaguered U.S. auto industry will likely disappear.
"It will do so because of the geographical forces that me and my colleagues have discussed," the Princeton University professor and New York Times columnist told reporters in Stockholm.
Moneynews - Krugman: U.S. Auto Industry Will Probably Disappear (http://moneynews.newsmax.com/streettalk/eu_sweden_nobel_krugman/2008/12/07/159083.html - broken link)
I agree-
I have read some of Harvard Business school grads theories on this economy on off web sites. From what I'm gathering from these young minds who are being prepped to be the next "Wall Streeters" It's not good, and I hope they are wrong.
Some are saying there should be "no bailout" under a Capitalist society if dumb decisions were made, they should fail. Out of the ashes will come a leaner, meaner company that wont make the same mistakes. Same for banks and investment houses and the like.
One in particular is calling for the bailouts to not work, the economy on stilts, and by prolonging the inevitable, when it does collapse it will take down "other" segments that would'nt have failed.
One other believes we are in hyper deflation (oil prices as indicator) oil producing countries economies will fail and that oil could go as low as $10-20 per barrel. Stock market to go as low as 3,000 or less(dow), then businesses will fail all over, throwing us back into the dark ages, but they believe oil will swing back and above $200 a barrel before this happens. (hyper inflation)And the kicker is...Most are in agreement this was all planned?
Paul Krugman, an intelligent follower of Keynesian economics, smart enough to win a Nobel, unwise enough to be a involved in the enron scandal, would leave me dizzy if I had to personally debate him on economics. However as someone who follows the Austrian school of economics it appears that much of his theory is derived on his support of socialist state imposed economics and his personal hate on for the free market. It appears his contempt for the individual which is a common personality trait amongst the intellectual elite at left leaning universities, often is reflected amongst his theories which could be construed as whatever America does is bad and destined to fail.
His musings often appeared conflicted when his liberal politics and sound economic practice are in opposition. He reluctantly acknowledges that rent and price controls don't work, and boy Keynesians hate admitting that.
I will say that if you read the works by other professors of economics such as Ludwig von mises and Murray Rothbard, the U.S auto industry should be spared the death by a thousand cuts, no bailout, allow for a liquidation of malinvestments and allow for unrestricted reinvestment in more competitive upstarts such as green cars, and rideshare type business models.
STOCKHOLM, Sweden -- Nobel economics prize winner Paul Krugman said Sunday that the beleaguered U.S. auto industry will likely disappear.
"It will do so because of the geographical forces that me and my colleagues have discussed," the Princeton University professor and New York Times columnist told reporters in Stockholm.
Moneynews - Krugman: U.S. Auto Industry Will Probably Disappear (http://moneynews.newsmax.com/streettalk/eu_sweden_nobel_krugman/2008/12/07/159083.html - broken link)
Krugman claims that the media misquoted him (you can cut the irony with a knife):
I gather that there’s a report on the wires quoting me as saying that the US auto industry would disappear. What I actually said was that the concentration of the industry around Detroit would disappear.
And did I really say “me and my colleagues”? I guess it’s possible — but that doesn’t sound like I speaking.
He may well be correct. But if so, it should happen slowly, not in one giant collapse that negatively reverberates through the rest of the economy.
Silly economic neophyte...if the auto companies were allowed to languish and slowly die off from gubmint infusion, the infrastructure (machinery/robotics/factory structure) would deteriorate further since there would be complacency to upgrade and service equipment. Better to allow immediate liquidation to another private investor who will trim down costs and properly utilize the equipment. Not only that, but since the government has no money, it would have to extract those funds from another resource or, get this, saved.
You probably also agree than foreclosures should be delayed and allow the houses to disintegrate from lack of upkeep, rather than young couples who can actually afford these homes at a real bargain price not artificially inflated by gubmint intervention to buy them.
We can all see how well "fixing" the economy works.
Why should a country that makes no TVs feel like it needs to make its own cars?
Agreed! And I believe there may be a couple of other products we no longer make that could be added to the list, as well.
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