Calling All Economics Professors or Those Working in Financial Fields

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understand how the "index" is validated (as in "Steve Antler has already pointed out that Herr Doktorprofessor misrepresents Damocles as an "economic model," where it is an index (Lehman Brothers terms it "a proprietary early warning system," not a model)").

So US financial crisis could cause greater "spillover effects" than a crisis in one of those other "many" developed countries with imbalances: Again KRUGMAN IS CORRECT - this is classic - this is the way one evaluates risk. It is the chance of something bad occurring times the cost of the bad should it occur. What does this idiot not understand?

So this critic fellow says models are not exact? Hey - idiot critic -perhaps they are the BEST we have to use to guess the consequence of a given action - perhaps better would be to pull it out of your ass like the supply side's "taxes will increase if you stop taxing, or decrease the taxing, of the rich".

"Our experience needn't be the same" is to say we are dealing with a likelhood - a risk, Is the idiot critic against risk management? Or is saying we can't be sure we will have a disaster a reason to continue on this path? What is the reason we should trust the idiot critic that Krugman is raising too many alarm bells - well it turns out that we have solid corporate management and regulatory control (those other countries have "institutional weaknesses...poor corporate governance...you can't trust business accounting...and insiders often enrich themselves at stockholders' expense...cronyism is rampant, with close personal and financial links between powerful politicians and the very companies that benefit from public largesse) - oh wait the fellow that posted noticed these things also exist in the USA. - Looks like a smart poster!

Damocles has been validated as a model by testing against past history - and idiot critic says this is the normal way of testing economic theories (and models) - and he is correct. He then says that a comment that that there may be problems applying the model to the US means the models over-predicts crisis when applied to the US - a jump in logic that has no support in the post. Better to say that a country whose currency is a reserve currency can get away with crap longer than a country whose currency is not a reserve currency.

Why is it absurd to suggest that our situation - our economics - will not be much different from those test cases used to validate the model? I always thought insufficietly free markets affected the speed of the correction - and the size of the correct when it does occur. This fellow can not be seriously saying there will not be a US correction, can he?

No he says the correction will involve what Krugman says will be involved - a fall in the dollar, a rise in interest rates (where this means a rise above where they would otherwise be because of the stregth of the economy - anyone who has followed the zero interest rate economy in Japan knows the extremely low interest rates may still be too high).

The idiot critic suggest a response by the world to our deficit forever idiot in the Whitehouse will more likely be mounting resistance to the Dollar and US investments - well how is this different from what Krugman is saying - and more important - why does this wording for the disaster change the prediction that a disaster is about to occur?

So idiot critic asks "why must we at some time see a sharp fall in the dollar and a sharp rise in interest rates" - and never realizes that that is a straw man question -- and that he should ask "when will be see a sharp fall in the dollar and a rise in interest rates above where they should be for an economic recovery" - the answer to which is - if a Dem is not elected President in 2004 - "Soon".

Herr Doktorprofessor says its because that's the way it happens to the Coyote in the Roadrunner cartoons.