Friday, October 7, 2011

Krugman and his Kindred Spirits: Supporting the Ruling Class

I was wondering when Paul Krugman was going to start praising the "Occupy Wall Street" protests, and he finally is getting on the bandwagon. And like about everything else Krugman does these days, he manages to write commentary without a shred of insight and once again make the claim that if we provide enough of "something for nothing," we can ride that nothing to an economic recovery. Fat chance of that.

Anthony Gregory of the Independent Institute, one of the best young libertarian writers today, has a much more insightful piece, and I link it here because, contra Krugman, Gregory actually understands that governments cannot borrow and print us into prosperity. Gregory notes:
Although there is no single ideology uniting the movement, it does seem to have a general philosophical thrust, and not a very good one at that. OccupyWallStreet.org has a list of demands, and while the website does not represent all of the protesters, one could safely bet that it lines up with the views of most of them: A "living-wage" guarantee for workers and the unemployed, universal healthcare, free college for everyone, a ban on fossil fuels, a trillion dollars in new infrastructure, another trillion in "ecological restoration," racial and gender "rights," election reform, universal debt forgiveness, a ban on credit reporting agencies, and more power for the unions.
In other words, the leaders of the Occupy movement want out-and-out dictatorship, as that is the only thing that can claim to order these things into being. In the world of Paul Krugman and his Occupy friends, government by fiat can overturn laws of science and economics and tax, borrow, print, and spend us into "prosperity."

In this world, only the State produces anything. Do we want "infrastructure?" Hey, no problem! Devote a trillion dollars to it (coming from nowhere) and it will magically appear. Do we want to do away with coal and oil and natural gas? No problem, Mon! Just make the order and we can have "clean, green energy" by fiat. Why bother with laws of science and economics when we can create a "New Science" and a "New Economics" by executive order?

For all of the "change" that Krugman and the Occupy crowd are demanding, I agree with Gregory that the Ruling Class of Washington, D.C., truly has nothing to fear from these folks. The most parasitic people among us are the ones being championed as our heroes and avengers, and I have seen nothing from the Usual Suspects leading this latest "movement" that leads me to believe that what they want is an Obama dictatorship on steroids.

Judge Andrew Napolitano, who I am sure is one of the many people on Krugman's "Hate List," warns that government is subject to all of the natural laws that bind the rest of us. That is something that gets past the Krugman and Occupy crowd.

Has there been misconduct on Wall Street? Yes, but the remedy was there three years ago: let the banks and financial houses that "invested" in the "toxic assets" take the bankruptcy haircut. The market would have meted out its "justice" for the stupid decisions they made.

Instead, it has been the government itself that has propped up the bad decisions, with the government -- and especially the Obama administration -- adding even worse decisions every day. However, from what I can tell, Krugman and the Occupy crowd are not satisfied and want out-and-out dictatorship, because ONLY a dictatorship can order what Krugman and company are demanding.

And, in the end, when that fails, who will Krugman blame? I'm sure that he can find his Goldstein, as he is quite good at doing that.

I think I understand why Krugman never has mentioned Steve Jobs in any of his posts or columns. Jobs did not "invest" in giving money to politicians, and he violated the Law of Krugman by saving money and developing products. After all, everyone knows that such things only hold back the economy, which can only move forward when governments implement inflation and other measures of "aggregate demand."

Thus, to people like Krugman, entrepreneurs like Jobs are nothing but parasites. They get rich and don't spend the money where Krugman wants it to be spent. They encourage people not to become bureaucrats or even economists. Furthermore, they don't even finish college; they just DO something, and that is unacceptable in the Wonderland of Krugman.

23 comments:

Lord Keynes said...

"In other words, the leaders of the Occupy movement want out-and-out dictatorship, as that is the only thing that can claim to order these things into being."

LOL... "Out-and-out dictatorship"? Do the words "you've jumped the shark" mean anything to you?

"let the banks and financial houses that "invested" in the "toxic assets" take the bankruptcy haircut. The market would have meted out its "justice" for the stupid decisions they made."

And the financial sector would have collapsed - depriving millions of their life savings.

But then no doubt your policy prescription is liquidationism - perhaps you yearn for it - a folly that even Hayek eventually retreated from when he came to endorse monetary stabilisation and even some fiscal policy.

No such good sense is to found here.

Mike Cheel said...

@LK

Your post made me laugh this morning.

Your liberal friends are clamoring for the government to save them. This is the same government that got them (and everyone) in this mess. When does government not do something via force?

As far as the financial sector collapsing and millions losing their savings if the government doesn't save the day, we are there already. The only difference is that the government enabled corporations are still in business doing pretty much the same kinds of things they have been doing. But why shouldn't they be? They won't be allowed to fail.

Why is personal accountability so hard for you people to understand?

Anonymous said...

And Hayek's positions contradict Anderson's thoughtful comments, how? The core of Anderson's argument is dead on. Krugman believes in government control and manipulation. The use of the term "dictator" may seem hyperbolic to extremists on the other side of the debate but ultimately this is what the "Occupy WallStreet" crowd is all about, even if it is not expressly stated that way. They want government to "control" markets and everything else...the only way to accomplish this is through dictatorial control.

JFF said...

LK: But the slow bleed is somehow better?

You are a buffoon. Go back to your cripplingly deflationist Weimar fantasy world.

William L. Anderson said...

One of the Holy Doctrines of the Keynesians is that if some firms are forced to liquidate, then ALL firms will go under. That is not true.

What LK wants us to believe is that the government had to prop up the bad banks and that somehow from that will come recovery. You see, in the Keynesian Wonderland, all resources are imaginary; whatever the State designates as a resource is a resource, period.

Pete said...

LK:

LOL... "Out-and-out dictatorship"? Do the words "you've jumped the shark" mean anything to you?

Yes, out and out dictatorship. That is the only way they can get what they want.

Read Hayek's Road to Serfdom.

And the financial sector would have collapsed - depriving millions of their life savings.

The financial sector would have been taken over by more competent businessmen, and the less competent would have been ejected.

All the buildings and bank infrastructure would have remained.

And according to you, the millions of demand depositors "should have known the risks" of their FRB demand deposits.

You contradict yourself, LK. Here you are saying that the banking system should have been bailed out so that the demand deposits holders claims can be satisfied with 100% reserve backing. But on your blog, you made it loud and clear that everyone who voluntarily enters into a FRB demand deposit account knew what they were getting into, knew they could lose the principle of their "loan", knew they incurred the risk of losing everything in the event of bank failures.

Well, how in the world can there be such risk present in FRB demand deposit accounts if demand depositors must be indirectly bailed out whenever the effects of FRB banking are made manifest through bank failures? You're making no sense. But hey, that's par for the course.

You're clearly an advocate of 100% reserve demand deposits, but the 100% reserve must be enforced only at the state level, through the state's violence backed taxation and monopoly printing press in the event of bank failures, and thus violation of private property contracting through taxation and monopoly in printing money, is OK then. But 100% reserve should not, must not, cannot, definitely not, be enforced at the bank level, before the booms start, because that would "violate private property" and would thus "be evil and bad and wrong and against private property contracting."

You're a hypocritical fool of epic proportions.

You're so contradictory that the opposite of what you believe is true is the truth and verifies the laws in "Rothbardia".

But then no doubt your policy prescription is liquidationism - perhaps you yearn for it - a folly that even Hayek eventually retreated from when he came to endorse monetary stabilisation and even some fiscal policy.

Continuously referring to Hayek is a straw man. Hayek was not even consistent. Hayek, despite his incredible contributions to free market economics, was a philosophical statist.

Bob Roddis said...

Krugman, LK and the MMTers all believe in the Mary Poppins Theory of Government. Government is omniscience, kind, benevolent and has magical powers. Nothing one can say will dissuade them of that infantile belief.

We should have learned that by now. And they will never change.

I really have a problem with statists who can't see that economies and societies are populated solely with plain ol' people, not omniscient gods. But that is the source of their belief that government agents are entitled to special privileges to loot the rest of us.

Mike Cheel said...

"I really have a problem with statists who can't see that economies and societies are populated solely with plain ol' people, not omniscient gods. But that is the source of their belief that government agents are entitled to special privileges to loot the rest of us."

As you may know, Politics is Hollywood for ugly people. It is obvious that they are viewed as celebrities and treated as such.

Mike M said...

LK said: “And the financial sector would have collapsed - depriving millions of their life savings.”

Pure conjecture on your part. Assumes that the action taken was the only one available. False.

Statists love to argue the Armageddon to justify their interventionist policies.

Mike Cheel said...

"Pure conjecture on your part. Assumes that the action taken was the only one available. False.

Statists love to argue the Armageddon to justify their interventionist policies."

This sounds almost like a...wait for it...straw man?

Mike Cheel said...

BTW Mike M, what I mean is that LK loves calling people straw men and I think he is probably the biggest straw man in this comment space. lol

Anonymous said...

You know what? Steve Jobs shat iPhones from his ass.

Anderson refuses to recognize the productive role that state education, infrastructure, or security play in the American entrepreneur's success. In his world the entrepreneur is the be-all-end-all.

This begs the question though, why did Jobs locate his operation in Silicon Valley? I'm sure Rick Perry or Sarah Palin could have offered him lower tax rates in Texas or Alaska...the best $10/hr workers in the world too!

William L. Anderson said...

By the way, don't Keynesians hate savings. If people lost their life savings, that would be a good thing, since saving money is what causes depressions, anyway.

As for the comment on Steve Jobs, first let me say that "begging the question" is an informal fallacy in which the conclusion is contained in the premise. Second, if government really was responsible for all of Jobs' and Apple's success, then why has NASA, which is full of techies, become such a cesspool?

And who creates the wealth that enables us to PAY for "state education, infrastructure, or security"? These things don't appear out of thin air -- unless one is a Keynesian and believes that printing dollars creates wealth. (Sorry, I mean, it "creates aggregate demand" which then creates wealth.)

ekeyra said...

The list of demands from the occupy wallstreet dopes reads like a list of demands you would expect a ten year old to write while threatening to run away from home.

1. Ice cream for dinner every night
2. No bedtimes.
3. All spongbob All the time

I see absolutely no reason to take these people seriously.

I cannot for the life of me comprehend why anyone would look to an organization that claims the right to annihilate you where you stand without trial, evidence, legal representation, or as prof anderson wells knows, the half assed theatrics of what still passes as "due process", as a savior from the predations of a financial sector it funneled trillions of dollars to only 3 years ago. There cant be that many people with short term memory loss due to concussions, statistically.

Anonymous said...

"And who creates the wealth that enables us to PAY for "state education, infrastructure, or security"? These things don't appear out of thin air"

Anderon's underpants gnomes:

Entrepreneur
???
Wealth!

Anonymous said...

The State provided the infrastructure? Elizabeth Warren's thesis based on fact or fiction. Who built he Boston Post Rd(inaccurately now known as US1)Who built the ferries across all the rivers between Boston and Philadelphia?. Who built the Erie Canal? Who built the railroads,the envy if the World? Who built Harvard,Yale,Princeton,Stanford, Smith College, Wellesly? Who built the hospitals,the libraries? The Museums. Who built the telegraph, the telephone. Who built the ports of New York,Philadelphia,Boston,Baltimore,etc?

Anonymous said...

the original fire depts were private fire companies, the first cops were the nightwatchmen privately organized and maintained. Who fought and won over the best equipped and trained military machine ever built by a State( Great Britain)? A militia of colonial volunteers:farmers,trappers,tradesmen with their own weapons. Where was the State? Absent. When the first American government formed,almost the first act was to renege on promises made to Col Shay about enlistment bonuses. Almost the second act was to tax corn farmers and to attack tax evaders with Federal troops. Some infrastructure

Tel said...

I think the whole "Occupy Wall Street" is a good example that it is a hell of a lot easier to point out the problem, than it is to come up with a viable solution to the problem. Thus, people put their time and effort into finding problems, instead of finding solutions.

I totally agree that Wall Street never deserved bailouts. They are corrupt, they are in league with big government and they are ineffective at their primary role which is to facilitate business, commerce and keep the currency stable.

From Wall Street's point of view, these protests are nothing more than a minor annoyance. Let the plebs blow off a bit of steam. A genuine protest where people (and small businesses) boycott the major banks would be far more meaningful.

William L. Anderson said...

And an even better response would be to let these banks be subject to market discipline. Notice, however, that not even Krugman wants that.

They want the banks to exist, they want easy money, free loans, and no responsibility to pay back anything, with the taxpayers being on the hook. They want the Fed to freely print away.

Oh, and they also want the results of capitalism. They want their iPhones, laptops, iPods, and all of the other things that would not exist without the capitalist system. These people want an economic system based after North Korea -- but they don't want to have to deal with the starvation.

Bob Roddis said...

Once these OWSers hear the MMTers, they'll all want free money for everyone because no one, including the taxpayers, will have to pay it back. And what possible harm could it do?

And our critics accuse us of thinking in terms of an Austrian "paradise".

BTW, I generally take a dim view of commies like these. The seem to always go soft on the freedom part of their message, never the totalitarian part.

Anonymous said...

Anonymous said...

"And who creates the wealth that enables us to PAY for "state education, infrastructure, or security"? These things don't appear out of thin air"

Anderon's underpants gnomes:

Entrepreneur
???
Wealth!


I get tickled every time I see a leftist miss the point of the original South Park episode, and I've seen them do what you just did on many occasions. A little more self awareness, please.

Once these OWSers hear the MMTers, they'll all want free money for everyone because no one, including the taxpayers, will have to pay it back. And what possible harm could it do?

MMT would just reject them like it rejects everything else that isn't government. It is a theory where the agency of individuals is superfluous. After all, according to them, government doesn't actually need the revenue stream from taxation. It can print fiat for all its needs and plans, and the underlying economy has no effect nor limitation upon it.

Bob Roddis said...

The MMTers and the OWSers are all just a bunch of commies with "new" angles.

http://mikenormaneconomics.blogspot.com/2011/10/power-to-people-through-internet.html

Bob Roddis said...

LK has managed to "sanitize" his blog comments. We now are left with gems of brilliance such as this:

Cahal said...

The idea that big business loves regulation is a silly myth perpetuated by big business so they don't have to be regulated.

Keynes proposed banning loans to speculators, btw, which he saw as a root cause of inflation. I'm not exactly sure how you'd go about that, though.


http://tinyurl.com/3jjljdp

What about that attempt at cartelization under the NRA? Never happened, I guess.