Seems like Bernanke gets it. But I'm worried that if you're right, given how corrupt our system is, spending the money fast is just going to, once again, transfer it from poor to rich people. If we spend quickly without restraint and oversight we will get robbed. That's what's happening with TARP.

Thanks for joining us Paul.

It seems that we are paying an inordinate price for the relentless application of free market dogma. We have been fed a steady diet of 'less government, more markets' for the past thirty odd years. The current crisis has its roots in an unswerving faith in the market's ability to innovate and self-correct.

If you agree with these observations: do you expect textbook economic theory to be revised in light of our experience? Your remedy is heavily Keynesian, but his ideas are hardly popular in standard economic classes.

Also: are you disappointed with the quality of advice being given to policy makers by economists? Given that economic theory places such a burden on markets as our primary method for allocating wealth, and given that most professional economists are trained in the standard theory, how can we expect them to guide us out of the chaos?

Good to see you here.

I'm getting your book as a Christmas present and look forward to reading it.

I would like to add my voice in welcoming you here, and expressing my surprise and delight that you will be sharing with us more about your book and your views of the current economic hall of mirrors we seem to find ourselves in now.

I greatly enjoyed (and own) The Great Unraveling, and will be looking to pick up your latest as well.

On another note, thank you thank you thank you for pimp-slapping George Will again yesterday in the green room, with his penchant for bloviate on the usual fright-wing talking points which are simply devoid of fact or merit. First is nonsense about how getting health-care reform would cost business money (no dumb-ass, getting systemic healthcare cost off the books of companies like the big 3 HELPS business) and then his foray into global warming denial.

Is that guy ever not full of crap?

If nothing else, you being on a panel with George Will seems to make him sulk and not spew too much malarky because you are there to take him down to the ground when he does. If for no other reason than you kneecap George Will shows you have more than earned your accolades in Stockholm.

Sounds to me like Krugman is simply rationalizing after the fact at each step of the way, the past few months.

However -- if the government can borrow $600B at zero interest, let's do it but spend it wisely.

The rabbit hole is only as deep as you imagine it to be, really. Don't get lost in your imagination.

There is a serious question to be answered: Is the so-called financial crisis dragging the economy down, or does it rather reflect negative first and second derivatives (forward anticipation) of a real economic retrenchment which is genuinely necessary, whether that counts as a depression or a recession? Predictive models can generate positive feedback...

Thanks so much for joining us here, Paul. Specifically, what New Deal programs (CCC, TVA, NRA, etc.) should be re-created in more modernized forms? What completely new programs would you recommend?

Thanks again!

One angle I'd like to see mentioned more is how tax policy could help shape any economic recovery. I'm no economist and don't claim to possess any insight thereof, but I think it's worth a look-see into how corporate tax rates over the years have affected, if at all, this economic downturn.

Take, for instance, the lowering of corporate income tax rates. This seems, to me, to be a disincentive for reinvesting and, instead, promotes profit-taking by corporate heads rather than creating jobs, corporate expansion, and all the things that are good for the vitality of the corporation and its workers.

Now, as for personal income tax rates, that's where reductions could allow individuals to keep more money in their pockets and spur increased spending. I think we've had it backwards for a while on tax policy.

Just to get in the mood, I borrowed "Wall Street under oath; the story of our modern money changers" by Ferdinand Pecora from the library.

The time is past when the US consumer can provide the demand needed to drive the Global Economy. The Globalists worshipped exploiting cheap labor and ignoring basic environmental and workplace rules.

Just as the strongest US economy was based on the rising wealth of a middle class; Globalists preached that the almighty market would eventually raise the standard of living of all nations to provide a market for goods.

The Globalist belief system has finally been shown to be a worship of false idols.

The failure of the free trade global economy to creat wealth among a stable world wide middle class has recreated the Great Depression's production capacity without a market.

The US middle class is simply tapped out. The European middle class has been reduced in size and divided between the wealthy and the abject poverty of their legal imigrant labor. For how many years have we heard that the driving force of the economy has beeen the US as a consumer nation? How did we finance that consumer nation? With massive national and middle class debt.

There is no stimulus package that can be large enough to conquer US debt and once again produce the consumptive US middle class. The only hope for the economy is that large Federal Government investments in infrastructure and newer green technologies can produce enough demand to float the country until the global problem can be fixed.

The failure of the Globalists and the free traders to build middle class consumers throughout their Global economy will drive the global downturn for years.

The danger to the future is that the Globalists will once again over-inflate sectors of the economy to bubble our way through a short term recovery. Greenspan was a master at this and either deliberately ignored global fiscal data and purposely deceived the country or was truly ignorant of the long term consequences of his policies.

With so much of the world mired in poverty so deep that the daily search for food and the neceesities of life consumes their energies just whom shall we sell our products to? Of what value is an auto industry wheen there is no one who needs a vehicle for the next 4 years (or longer)?

How many bidg screen TV's can you sell in Africa, the poor sections of the Middle East, Eastern Asia, the Slavic countries, South and Central America and the Phillipines? All of these populations have been exploited by the Globalists for cheap labor without any commitment to improving wealth among the workers.

Now we have a Global Economy with excess production capacity and no where to sell the products.

The failure of the World Bank, the G-8 and the greed of the aristocracy has produced a division of wealth that will take years to realign.

The bailout of the world banking system will produce no economic benefits or lasting stability until the banks accept the prospect of lower returns and realize that the future requires investment in the actual poor of the world.

Business as usual has failed.

The US economy has become entwined in the Globalist failed banking system, the weight of massive debt for consumerism and the funding of a military to suppress anyone that might challenge our supremacy. We need a new focus from the G-8. We need a change from free market exploitation. We need to reduce our expectations of investment returns.

We must build a Global economy that truly begins to raise the wealth of the great majority of the poor people that inhabit our planet.

Economic stimulus in the US is needed to keep us from going over the edge. There is no amount of US government money that can keep us from the edge until we repair our basic understanding of what a Global economy really is and how we build one that works for everyone.

Normally we want to be careful that public funds are spent wisely; right now the crucial thing is that they be spent fast.

I'm guessing Mr. Krugman is comfortable with the Treasury and the Federal Reserve spending trillions of dollars secretly.

What happens to American financial markets if the SEC permits publicly traded financial institutions to hide bailout information from investors? Financial statements become useless for starters.

As an average investor, am I supposed to happily embrace a signifcant curtailment of my economic freedom for the "good" of the economy?

When the government claims the right to make secret deals with publicly traded companies, it is telling me that I no longer have the right to accurate and timely financial information.

I don't think Mr. Krugman and a lot of other so-called experts have given enough thought about the consequences of conducting the US economy in secret.

As an aside, Warren Buffet invested $5 billion in Goldman Sachs not long before it became a "bank holding" company and borrowed $10 billion under TARP.

Does Goldman Sachs need to be bailed out if Warren Buffet is investing in the firm?

As far as the economy goes, I feel like Slim Pickens in Dr. Strangelove. We're riding this puppy all the way down, so we might as well whoop and holler about it just to show we're enjoying it.

Anyhow, on a more serious note, if we want a massive and quick infusion of cash why not this? Each month for three months send every household a thousand dollars or so worth of $50 vouchers. Each voucher expires in 30 days. They can be spent at any retail store or service provider. Change cannot be provided in cash of more than $5 for any transaction that uses a voucher. Retailers will return the vouchers to the fed for cash with their IRS tax ID on the voucher. The fed will not redeem vouchers with the tax ID of any bank, investment firm, or credit card company. Re-evaluate this program on a quater-by-quarter basis. Blackmarket dealing in vouchers will be punishable by death.

What rules? There are no rules. If we had rules and if they were being followed we wouldn't be in this mess. Don't insult us.

Paul Krugman on TPM for a whole week -- wow, this is like getting an early Chritmas present! Welcome, welcome, Mr. Krugman. I look forward to hearing your thoughts, especially since I really missed seeing your column while you were in Stockholm last week.

Paul Krugman actually replied to an email I sent him a few years ago, we exchanged two emails I think. I couldn't believe he took the time to respond to a question from someone he didn't know from Adams off ox...been an avid Krugman reader ever since ( actually before...but his accessibility and graciousness clinched it ).

That's all I have for now...

"If peoples' salaries were going up at the same rate the profits made by the businesses they worked for did for the last 8 years, we wouldn't be having this problem."

If all this bailout money had been converted to higher wages for the middle class, instead of temporary bouyancy for leaky banks and golden liferafts for their lousy skippers, the WHOLE WORLD would benefit, including those banks and their CEO's.

Why not HUGE coprorate tax incentives, including bailout investment, for comapnies who raise their workers' wages?

I realize there's some heavy hitters in this mix, so I blog with some trepidation.
But here's my layman's simple-minded point of view for anyone who cares;
The middle class wants more income so they can spend it...
The wealthy want more income so they can HAVE it...

One model creates an economic flow that contributes to growth, the other an economic rollercoaster that's heading for a black hole.

Enrich the American and European middle classes, and you enrich the entire world.