Charlie Stross, Paul Krugman Discuss the Future

Peripatetic Entrepreneur writes "At the Science Fiction World Convention in Montreal, Hugo Award winning author Charlie Stross and Nobel Prize winning economist Paul Krugman opened the show with a 75-minute, wide-ranging conversation on stage. From flying cars to decoding the genome of the Pacific Ocean to vat-grown Long Pig, it's all there. Audio is also available — video soon."

Krugman and Stross Transcript

[MichaelSmith]

Krugman and Stross Transcript

Paul Krugman (PK). Nobel Prize winning economist and columnist for the New York Times.

Charlie Stross (CS). Hugo-winning science fiction author.

Anticipation World Con, Montreal, Quebec
August 6, 2009

Transcription by Edwin Steussy, Apogee Communications. Please send corrections to ed âoeatâ my last name âoedotâ com.

CS: Good evening, weâ(TM)re very pleased to be here and thank you very much for inviting us to talk.

PK: Yeah, this is different for me, but it should be a lot of fun. ⦠(Set up problems) ⦠What do you really think the world is going to look like, say, 30 years from now?

CS: Ummm, thereâ(TM)s a very simple answer to that and a misleading one, I think, and the simple answer is unless we are really, really unlucky the world in about 30 years time is going to look more complex. By really, really unlucky â" nuclear war, major plagues or similar â" the world in 30 years time after that is going to look a lot simpler, though not a good way.

PK: Right. Obviously what Iâ(TM)m thinking about is the technology. Given my perspective â" I was thinking about his coming up â" and thinking that â" maybe it was just my age or something, but things donâ(TM)t seem to have changed as much in the last 30 years as myself as a sci-fi reader would have expected them to. And I donâ(TM)t know if Iâ(TM)m missing something â" kinda that perspective.

CS: I think things have changed a lot in the last 30 years, but not in the direction that somebody 30 years ago would have expected. The 20th Century, and going back to the 19th Century, the real visible vector of change technologically was transportation speeds. You go back to 1809 and to get across the English Home Counties, the areas around London, you go via stagecoach and it would take you a couple of days to cross them, it would cost you probably about a monthâ(TM)s wages and cause you considerable discomfort. 2009, it costs about the same amount of money, it takes about the same time and the same amount of discomfort to get from here to New Zealand. The whole world has shrunk to the scale of the English Home Counties in 1809 over about two centuries. At the same time weâ(TM)ve gotten used to performance improvements in speed. Thereâ(TM)s this weird sort of political thing in the early 20th Century called air-mindedness. Everybody knew that flight was going to be the next really important technological revolution. They were all trying to find ways of making money from it or using it to demonstrate how important and modern and with-it they were and how on the cutting edge they were â" sort of like computers today with politicians. Who will never pass up a photo-op with a computer even if they donâ(TM)t even know how to type. Now the whole air-mindedness thing, the problem we ran into was ⦠it was sigmoid curve â" we had a slow start, a very rapid period of improvements where we went at about 20 years from biplanes to supersonic jets. And then the curve stopped going up â" it flattened off. And the reason it flattened off is all to do with energy. To go much faster, you need more and more energy inputs. Itâ(TM)s not a linear input increase but virtually an exponential one. We hit a point at which chemical propulsion wouldnâ(TM)t send us any faster. And for a variety of reasons including both engineering and politics, nuclear power wasnâ(TM)t an acceptable answer. And airliners today are slower than they were 20 years ago. However, the big difference is that everyone and his dog flies today, whereas 20 years ago, or 40 years ago more accurately, thatâ(TM)s where the term jet-set came from, its because those were the people who could afford to fly long distances.

PK: And yet, let me press on. What I kind of expected. Let me show my age here. What you came out believing if you went to the New Yorkâ(TM)s World Fair in 1964 w

Krugman called FOR the bubble

[megamerican]

Writes the future Nobel laureate in the NY Times, August 2, 2002:

To fight this recession the Fed needsâ¦soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html [nytimes.com] Krugman and the Keynesian economists don't predict economic downturns, they create them. They believe that "bad" money in the short term is better than "good" money and say that in the long term we are all dead. Krugman's prize wasn't for being a good economist but for his mathematical model much like John Nash. Personally after reading Krugman the past two years I believe he is also just as nuts.

Re:Krugman's prognostication skills aren't all tha

[frank_adrian314159]

He didn't exactly see the financial meltdown coming in advance

He was pointing out back in September of 2007 (and perhaps earlier - I didn't check any further) that housing prices were far too high with respect to historical price-rent levels and that a reckoning was coming. You're right, he didn't predict the collapse - he just predicted the precursor and had been warning about the deregulation that turned it into a disaster.

Re:Krugman's prognostication skills aren't all tha

[MagicMerlin]

The problem with Krugman is that he is relentlessly political and that is a bad trait for an economist. He tireless argues for greater and greater interventions in the marketplace (that is, he's a statist) without taking into account the secondary effects of those interventions because that would contradict his world view. He's also very popular in Washington :-).

moderntainment: the future?

[Niubi]

I don't think the future of entertainment will be so different than it is today, or even 500 years ago. The medium may change, but that's really about it. Humans like to be entertained, period. Here's an interesting new development in 'moderntainment'; http://us.dubli.com/The-New-York-Spygame__3_2913?gmt=-60 [dubli.com] which I think could really indicate how people are starting to think about their space and entertainment, and how to make the most of something that even a few years ago was pretty much the preserve of novels and OTT Hollywood shows. Food for thought, I think.

Why do people make shit up?

[Anonymous Coward]

You, sir, are smoking crack.

Of all the economists to go after for having poor "prognostication skills" you couldn't have picked anyone worse, except for maybe Nuriel Roubini. The fact is that Krugman called the bubble in at least May 2005 [nytimes.com], warned of disastrous consequences in August of that year [nytimes.com], and continued to do so all the way to when the shit hit the fan. From his August 8 2005 piece:

"If housing prices actually started falling, we'd be looking at a very nasty scene, in which both construction and consumer spending would plunge, pushing the economy right back into recession. That's why it's so ominous to see signs that America's housing market, like the stock market at the end of the last decade, is approaching the final, feverish stages of a speculative bubble."

This is when Fox, CNBC, and the Fed were rah-rahing about how everything was fine and shouting down those who'd voice otherwise.

It was worse than even he suspected, as the bubble continued to grow [nytimes.com], he continued to point it out [nytimes.com]. For anyone who read his column and blog in the years leading up to this clusterfuck it was quite clear that Krugman had a very prescient and accurate prediction of the varied causes and effects of the chaos that would ensue along with numerous warnings not to let it happen. So the parent can shut his pie hole because he clearly hasn't read a word the man has written.

I invite anyone to Google and read Krugman's columns for yourself. Because this is insane backwards bullshit. The guy was crying his head off that this was going to happen.

If your download the audio only grab the 52mb ver.

[dopeghost]

Even the second biggest one (12mb) is only 24kbps / 8000Hz and sounds like crap. And there's 8mb and 4mb versions below that! Surely a single 64kbps 220000Hz stream would of done? :s The large version is here - 96kpbs / 32000Hz.... http://cluebytwelve.net/anticipation/Stross-Krugman%202009-08-06hi.mp3 [cluebytwelve.net]

Re:Krugman called FOR the bubble

[jchandra]

To be fair you have to add Krugman's response to this accusation:

http://krugman.blogs.nytimes.com/2009/06/17/and-i-was-on-the-grassy-knoll-too/ [nytimes.com]

Guys, read it again. It wasn't a piece of policy advocacy, it was just economic analysis. What I said was that the only way the Fed could get traction would be if it could inflate a housing bubble. And that's just what happened.

Re:Krugman's prognostication skills aren't all tha

[Anonymous Coward]

That is at best a mischaracterization of his position. He is saying Alan Greenspan's only option to not head into the double dip is to create a housing bubble. He is NOT advocating that option.

What?

[br00tus]

What? Krugman wrote "The Return of Depression Economics" in 2000. He has been saying something is fundamentally wrong with the world economy since then, while the median response by economists is that everything is fine, the free market has to take its course etc. Krugman has been throwing closer to the bullseye than most other mainstream economists.

Re:Krugman's prognostication skills aren't all tha

[SnapShot]

Asking an economist to predict the stock market is like asking your channel 7 weather man to model global climate change.

Nevertheless, if you've been following Krugman he's certainly not been an optimist about a lot of the aspects of economy leading up to the meltdown. Here's a pretty pessimistic article about housing prices from 8/2005: http://www.nytimes.com/2005/08/08/opinion/08krugman.html?_r=1 [nytimes.com] Of course, at the time people accused him of being a pessimist.

Re:Krugman called FOR the bubble

[SnapShot]

Seriously? A +5 mod for a misquoted line in an article? Did you actually read this article?

The basic point [of the "double-dip" fearing economists such as Steven Roach] is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Judging by Mr. Greenspan's remarkably cheerful recent testimony, he [Greenspan] still thinks he can pull that off. But the Fed chairman's crystal ball has been cloudy lately; remember how he urged Congress to cut taxes to head off the risk of excessive budget surpluses? And a sober look at recent data is not encouraging.

Reading those two paragraphs, you've interpreted it as Krugman calling for a housing bubble? Perhaps as some sort of Keynesian conspiracy to cause an economic downturn? Is English a second language for you?