Paul Krugman, don’t be in such denial, if we are ever to get out of this depression, we must rid our banks of regulatory repression

On Sunday October 4, 2014 Paul Krugman writes in the International New York Times “Depression denial syndrome”, in relation to his favorite theme of lambasting those who cannot see what he can see, in this case Bill Gross, on that being in a “liquidity trap”, the world needs basically unlimited amounts of fiscal and monetary stimulus. 

Well if Krugman can so can I, and so let me lambast all those who like Krugman cannot see what I have seen, for soon two decades now, namely the odious regulatory repression which, by favoring the financing of the “infallible sovereigns’, the housing sector and the AAAristrocracy, keeps all those perceived ex ante as “The Risky” from having fair access to bank credit.

Krugman writes in an “economy awash in desired saving with no place to go… government borrowing doesn’t compete with private demand because the private sector doesn’t compete want to spend”. That proves he ignores, on purpose or unwittingly, the fact that banks need to hold much much more of that currently so scare bank capital (equity) when lending to The Infallible than when lending to medium and small businesses, entrepreneurs and start-ups.

In short, Paul Krugman, don’t be in such denial, if we are ever to get out of this depression, we must rid our banks of the regulatory repression imposed on them by unconscious regulators.