I remember when Staples put this Dilbert cartoon into an ad, and Krugman claims that this is how some American pundits decide who is "presidential."
Obviously, Krugman never would think a person's looks would determined whether or not he was "distinguished," but it was not that long ago that Progressives were united in their praises of the "distinguished economist" John Kenneth Galbraith, whom I dubbed the "Dilbert Economist." Yes, Galbraith was tall and had academic-style hair which...turned silver. That he was an economist as opposed to being a socialist political operative who made a number of nonsensical claims on economics is another subject for debate.
(For that matter, Bill Clinton was tall and his hair has turned silver, too. That must make him a "distinguished ex-president.")
Salvation by Printing Money
In the end, Krugman tends to be a Silvio Gesell-style crank. Print money (which everyone knows is free wealth), and governments easily can solve their economic problems. In a recent post, Krugman claims:
...countries without a printing press are subject to self-fulfilling crises in a way that nations that still have a currency of their own are not. The point is that fears of default, by driving up interest costs, can themselves trigger default — and that because there’s a crossing-the-Rubicon aspect to default, once a country crosses that line it will probably impose fairly severe losses on creditors. A country with its own currency isn’t in the same position: even if it is pushed into some inflation, there’s no red line that need be crossed.Yeah, there are no consequences for debasing the currency; it's all "free money"! Wealth for all!
9 comments:
I bet Lord Keynes has a beard and smokes a pipe.
Fraud.
Taking Krugman's dubious logic even further, some hilarious outcomes arise.
"...individuals without a printing press are subject to self-fulfilling crises in a way that individuals who still have a currency of their own are not. The point is that fears of default, by driving up interest costs, can themselves trigger default — and that because there’s a crossing-the-Rubicon aspect to default, once an individual crosses that line it will probably impose fairly severe losses on creditors. An individual with his own currency isn’t in the same position: even if he is pushed into some inflation, there’s no red line that need be crossed."
Inflation is just another means of defaulting. Instead of admitting openly that you are bankrupt, you use a printing press to churn out rubber checks. Either way, your creditors are defrauded.
The point is that fears of default, by driving up interest costs, can themselves trigger default
sounds like the "confidence fairy"
Prof. Anderson, is your blog only about demagoguery? Aside from offering no intelligent counterpoint as to why countries with their own currencies aren't having the financing problems of certain Euro countries (implying you agree this is the situation), you ignore even recent writings that refute your assertion that Krugman believes there are "no consequences" for financing debt with new currency. Case in point, from MMT, Again:
Do the math, and it becomes clear that any attempt to extract too much from seigniorage — more than a few percent of GDP, probably — leads to an infinite upward spiral in inflation. In effect, the currency is destroyed. This would not happen, even with the same deficit, if the government can still sell bonds.
...
[I]t matters whether the government can issue bonds or has to rely on the printing press. And while it may literally be true that a government with its own currency can’t go bankrupt, it can destroy that currency if it loses fiscal credibility.
...
But the MMT people are just wrong in believing that the only question you need to ask about the budget deficit is whether it supplies the right amount of aggregate demand; financeability matters too, even with fiat money.
Of course the idea that Krugman doesn't support the infinite printing press won't fit neatly into the straw-Krugman you've made for yourself, thus you ignore it and continue on as though you are the one with the reasoned analysis. Much easier than the cognitive dissonance that would result from accepting reality I suppose. Or maybe you just can't do the math Krugman suggests.
In short, do you believe the only way you can refute Krugman is to make things up?
Of course the idea that Krugman doesn't support the infinite printing press
Of course Krugman doesn't support the infinite printing press. He supports some funky "controlled" money printing press. Of course, if it fails, he says the problem lies in the lack of printing, of the lack of credibility caused by the printing. So, if the government finds clever tricks they can use to print money without losing its credibility, it's okay.
The nice thing about Keynesians, MMTs and such is the fact that they can always say they were right and that they know how to fix things. It's always the lack of their secret sauce that is to blame. Just apply more sauce and, bam!, it's done.
Anonymous, are you trolling or are you retarded?
Prof. Anderson, is your blog only about demagoguery? Aside from offering no intelligent counterpoint as to why countries with their own currencies aren't having the financing problems of certain Euro countries (implying you agree this is the situation), you ignore even recent writings that refute your assertion that Krugman believes there are "no consequences" for financing debt with new currency. Case in point, from MMT, Again:
Anderson has on many occasions explained why a government inflating its way out of its debt obligations is problematic.
Yes, the fact that he isn't bowing to MMT idiocy 24/7 is a great insult to the MMT morons who insist they are relevant, when in reality, they're nothing but a bunch of anti-economic statist accountants with a bad attitude. But that doesn't mean he has to address the same fallacies over and over.
When Anderson mocks Keynesians for acting exactly consistent with people who care nothing about debasing the currency and do not see any destruction unleashed by it, then that doesn't mean he is claiming that you MMT morons don't have the faint glimmer that debasing the currency too much can lead to spiraling inflation.
Anonymous:
Of course the idea that Krugman doesn't support the infinite printing press won't fit neatly into the straw-Krugman you've made for yourself, thus you ignore it and continue on as though you are the one with the reasoned analysis. Much easier than the cognitive dissonance that would result from accepting reality I suppose. Or maybe you just can't do the math Krugman suggests.
Anderson didn't claim that Krugman would support infinite inflation, so that means your claim he did is a worthless straw man.
You want to talk about cognitive dissonance? That's MMTers. Realizing that you are nothing but champions of state spending and inflation, "Because of the accounting identify you fools! It can't lie! It's MATH!" must weigh very deep on your subconcious that constantly has to reconcile your own desire for freedom, and your desire to eradicate other people's freedom.
Apprently, Krugman has fooled a lot of people with no understanding of economics -- theirs and his.
Doug Casey: The Science of Economics is Corrupt
...And on a related note, Paul Krugman was just ranked as the favorite living econoimist under 60. [link]
If they meant under 60 IQ then they might have had a solid argument.
Post a Comment