Dr. KRUGMAN and FTA

The Return of Depression Economics? April 13, 2009
FPC Briefing
Paul Krugman
Professor of Economics and International Affairs, Princeton U.

Foreign Press Center
New York, New York


QUESTION: Thank you. Thank you, Professor. John Zang (ph) with CTI-TV of Taiwan. I have two questions for you. I have come from Washington for you for this occasion. Sir, you are going to Taiwan next month for a visit. People in Taiwan, a lot of them, will be looking to you for advice and probably for suggestions as to how best to come out of this economic abyss.

Second question: The government of President Ma Ying-jeou is thinking about signing or negotiating a baby FTA in the name of economic cooperative framework agreement. But the opposition party has concerns about possible jeopardy to Taiwan’s sovereignty. What do you think about that? Thank you very much, sir, appreciate it.

MR. KRUGMAN: Okay. About the second, I don’t really – unless I know – knew something more about it. I mean, there is – you know, free trade agreements, all – all such agreements do involve some sacrifice of national autonomy. They – we do this all the time. Now it’s usually been a good thing. It sort of depends on what. I mean, there – so I can’t really – can’t really comment on that without knowing something more about it.

How to get out; I think there are actually two questions here. One is how do we mitigate this crisis and how do we prevent it from really turning into Great Depression 2.0. And I think we have a fairly clear understanding of the things you can do that limit the depth of it – very aggressive policies to free up financial markets, monetary expansion as far as it can go, widened menu of monetary policies and fiscal expansion. All of these things have invariably worked in the sense of when they’re applied, the economy does better than when they’re not.

And you know, we’re doing all of these things, but, you know, as everybody knows, I think not on a sufficient scale. But we’re – these are mitigation strategies and I think they apply to everybody. I mean, if – there’s no real question that they will help. The question of how do we actually end the thing is different, how do we actually get out the other end. And we don’t have a lot of role models for that. The Great Depression itself was ended by World War II, and we’re not quite sure even now why the Great – we know why World War II expanded the economy. We don’t know why the economy didn’t slide back into depression, though I have some ideas about that.

We – the nearest modern parallel is Japan’s lost decade. And that one ended – so far as it did – I mean, it’s now starting to look like the period of expansion may have been just an intermission – but that ended thanks to an export boom, which is not much help in a global slump unless we can find another planet to export to. So there’s a – I mean, my view is that we probably need major bank cleanup and probably sustained fiscal stimulus until the private sector can repair balance sheets enough to start spending again.

But you know, we’re feeling our way through this. And everybody’s going to have to – I guess my basic view is think of everything that might work and do all of it. So – okay.

http://fpc.state.gov/121662.htm

這個訪問的大概意思是，Dr. KRUGMAN說，雖然FTA自由貿易協定，協定涉及一些犧牲國家的自主權。通常是一件好事。但是我真的不能評論他所不瞭解的東西。

結果這篇訪問的內容，中國時報竟然斷章取義的將「兩岸簽署ＥＣＦＡ是好事」當成標題，此外記者在詢問的也不是ECFA而是FTA啊！