tag:blogger.com,1999:blog-6276561747841568697.post4425160910720317014..comments2024-03-27T05:23:48.855-04:00Comments on Krugman-in-Wonderland: Paleo-KrugmanismWilliam L. Andersonhttp://www.blogger.com/profile/01802990642236807359noreply@blogger.comBlogger46125tag:blogger.com,1999:blog-6276561747841568697.post-55060840035750116062010-12-23T16:42:54.653-05:002010-12-23T16:42:54.653-05:00And meanwhile, followers of both Ron Paul and his ...And meanwhile, followers of both Ron Paul and his opponents like Krugman frankly have little or no idea what the hell they're talking about. Krugman followers - who are much much greater in number and enjoy a much more accommodating media and governmental following - think new money creation is swell; check that...they don't even think about where the FED gets its money to make all these magical purchases. Ron Paul's fans, admittedly, adopt a few slogans and run with it. But at least they're willing to part from the masses and trust their instincts that money doesn't come from nothing...that savings MUST come before credit issuance...that SOMETHING is wrong, and the FED appears to be incapable of papering over the problems this time.Sean O'Donnellnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-43404522510125652582010-12-23T16:41:50.155-05:002010-12-23T16:41:50.155-05:00@AP Lerner and others,
First, I applaud the fact t...@AP Lerner and others,<br />First, I applaud the fact that you have the sack to assign your name to your comments. I like that and wish more people did that for a whole host of reasons.<br /><br />I'm a huge Ron Paul fan, and I confess he generalizes about terms like "money supply" versus "monetary base".<br /><br />But wait a second! How do I know this? After all...I'm a zombie Ron Paul fan (aka FANatic), and can't possibly know this because supposedly Ron Paul does not know this? So how do I know this? I have no degree in economics, finance, MBA, PhD, nothin...just a Physical Science BS with a core engineering curriculum followed by ten years as a Navy pilot and ten years in financial disservices.<br /><br />I'll tell you how. Because Ron Paul mentions Mises, Austrian theory, etc...A LOT. He's a credit giver, not a self-promotoer. That's why I know the diff between monetary base and money supply. And I promise you, the vast majority of people in the financial disservices industry - at least on the retail sales side - have no idea what we're talking about. You KNOW this to be true, right?<br /><br />But who cares...it's all inflationary (increase in base and supply). Both threaten to or actually drive prices higher, and that's how the professionals make their money: by hopefully making the portfolios go up nominally. What a profession. Who cares what's going on with the actual economy or people's lives. Who cares about the destruction of the middle class, etc because of government and FED intervention, keeping alive institutions that suck wealth OUT of the economy...gain, while slowly destroying the currency.<br /><br />And what if those assets held in excess reserves (the monetary base) deploy into the economy? What if QE2 has a multiplier effect, as it's designed to have? And what about the FED's "reinvested" proceeds from assets reaching maturity and interest, which is around $300 billion or so in treasury/security purchases over the same 8 months as QE2? All of this sends the markets into a speculative frenzy as investors and speculators alike try to figure out what the central planner of our economy is going to do next. <br /><br />Paul has discussed most of this directly and indirectly...again, always referring to others....leaving people free to form their own conclusions, a far more generous attitude/position than I would take if I addressed the liars in Congress and at the FED.<br /><br />People know their dollars don't go as far as they once did...and they're finally looking into why. To deny the destructive results of the FED's new money creation is craziness personified...in my minimally educated opinion. Bickering over M1, M2, M3 for all intents and purposes is immaterial in the grand scheme.<br /><br />Meanwhile, dumb ass Ron Paul suggested what he does...hold gold and silver related holdings as an insurance policy against an impending currency crisis, admitting you never know when the currency will falter and that bubbles often last much longer than people expect. For this free advice, people could have seen approx 480 percent on their money in the same decade that the S&P did zero.<br /><br />Attacking the overly gentlemanly Ron Paul tells me a lot about someone. If the only desire was to clarify areas where Paul has been technically negligent or perhaps unaware, I would applaud the move. But when I see a concerted effort to smear this man, my bullshit light becomes fully illuminated. I denounce those who willfully smear Ron Paul, a man who has done more to educate the masses than any other in Congress over the past several decades.Sean O'Donnellnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-43647387300810777212010-12-21T20:56:43.621-05:002010-12-21T20:56:43.621-05:00But there is "human behavior", so let...But there is "human behavior", so let's keep discussing reality.Jonathan M.F. Catalánhttp://www.economicthought.net/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-25460524113773235702010-12-21T10:26:33.428-05:002010-12-21T10:26:33.428-05:00Jonathan,
I made the statement that economics cann...Jonathan,<br />I made the statement that economics cannot be watertight because without human behavior there is no economic activity. Human behavior can never be “watertight.” To assume otherwise is naïve in my opinion.Mike Mnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-48098695142661230302010-12-21T06:01:28.284-05:002010-12-21T06:01:28.284-05:00AP says :"How's that working out for you?...AP says :"How's that working out for you? I hope you're doing better than Peter Schiff."<br /><br />Gold's at $1385! It hasn't gone anywhere but up in the past decade (minus minor hicup in 08) ever since the Fed has gone full throttle with its ultra-forced-artificially-liquid-markets monetery policy, despite the market's natural tendancy toward further risk aversion. I hear his portfolio also consists of various other instruments but of the one I know he's explicitly promoted it's at close to record highs. Where's your point?<br /><br />What is going to happen when interest rates go up (and that's not too improbable) and the fed is stuck with devalued treasuries on it's Asset side of the balance sheet? What about all of the crap-securities it "had to" load off failing bank balance sheets? Who will ultimately be on the hook for those? Or do you think those will somehow recoup to their face values?complexphenomnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-71173791014647233072010-12-20T22:25:00.998-05:002010-12-20T22:25:00.998-05:00Something important to note is that Krugman was NO...Something important to note is that Krugman was NOT criticizing Austrian theory. You just automatically assumed he was but he made no mention of the Austrian school anywhere. Why would he be calling it Paleomonetarism if he was criticizing Austrians? He was criticizing Ron Paul and Ron Paul alone. This isn't first time Krugman has criticized a random politician's bad economics without trying to make a vialed attack on a school of economic though before.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-42100521997799861202010-12-20T19:33:18.219-05:002010-12-20T19:33:18.219-05:00If I may. Problem one for Krugman. There is a weal...If I may. Problem one for Krugman. There is a wealth of discussion about the true money supply in Austrian literature, to focus on the sound bites, in which, Paul has to communicate is dishonest. A causal search at mises.org would do if one can't read Money and Credit. Problem two, Austrians constantly distinguish between inflation (increase in money supply) and changes in the CPI. Three, Paul often refers to the fact that Fed credit has doubled in the past few years, everyone know most of the created money is being held as excess reserves.Lysander72noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-10528766652181689752010-12-20T19:10:27.642-05:002010-12-20T19:10:27.642-05:00Mike,
Whether or not you take a positivist or a p...Mike,<br /><br />Whether or not you take a positivist or a priori approach to economics has no influence over the <b>fact</b> that economic theory is universally true (you had made the claim that economics cannot be "watertight").Jonathan M.F. Catalánhttp://www.economicthought.net/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-78756284722835681052010-12-20T17:38:23.556-05:002010-12-20T17:38:23.556-05:00Jonathan
"Economics does not explain why peop...Jonathan<br />"Economics does not explain why people act the way they do, only what will occur if certain actions are taken."<br /><br />All other things being equal I would concur. In a complex world of 6 billion+ people and capital moving at nanosecond speeds, I doubt that rarely occurs. My argument is with people, from whatever economic philosophy they subscribe to, that view economics as a science lab experiment. The minute we believe that human behavior is predictable, beyond rational self interest over the long term, we get into trouble.<br /><br /> “It ain’t what you don't know that gets you into trouble. It’s what you know for sure that just ain’t so.” <br />-Mark TwainMike Mnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-87548063386833422342010-12-20T17:22:47.872-05:002010-12-20T17:22:47.872-05:00"As far as I'm concerned, the current mon..."As far as I'm concerned, the current monetary system is run by criminals and for criminals."<br /><br />A point we agree on.Mike Mnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-26188294093934044462010-12-20T17:19:24.949-05:002010-12-20T17:19:24.949-05:00It is easy to pick apart Ron Paul. He has never be...It is easy to pick apart Ron Paul. He has never been much of an orator or a demagogue. As such, he says a lot of things which are weak, inaccurate or unconvincing, at least in comparison to the mighty sounding rhetorical claptrap we've been spoonfed by our leaders. I can't really blame him, after all he's seems to be an ordinary person, not some sort of argumentative genius (like AP Lerner).<br /><br />The press has a field day insulting and ridiculing Paul's statements and positions. Let them try to go after something more substantial, like Rothbard's "Case against the Fed" or Hazlitt's "Failure of New Economics". As far as I'm concerned, the current monetary system is run by criminals and for criminals. What is so controversial or crazy about pushing for an audit of their operations, or to legalize currency competition?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-21316238541880273092010-12-20T17:16:54.206-05:002010-12-20T17:16:54.206-05:00AP
I see no benefit is labeling on these matters b...AP<br />I see no benefit is labeling on these matters beyond where a person is on the spectrum of Statism and Individualism. Beyond that it’s mostly a more sophisticated version of “Crypts & Bloods” adolescent dribble.<br /><br />I have not “bought into” the ideology of Austrian economics. I identify with it because it I believe it is the closest thing to representing real world human behavior based on my study and experience. I have said repeatedly it is not perfect, (no one seems to pay attention to that point) but then again nothing created by man will be.<br /> <br />I too have some professional capital allocation responsibilities. Framing my understanding of the markets with a basic Austrian view has served my VERY well over the last 12 years. In the manipulated world we live in with massive capital flows, one or two years are meaningless. A true measurement now must include time to have economic reality be allowed to reflect the natural order. While the bankers and governments are good at keeping the beach ball under water, eventually the pressure becomes too great. That’s when those with a proper real world foundation in economics will benefit. Sadly it may be by losing less than everyone else when measured in real terms.<br /><br />That fact that you eat your own cooking has my respect. Unfortunately most on these forums do not.<br /><br />As for Schiff, I don’t agree with everything he says. (does that ever really happen for thinking persons) That said, over a longer period of time he is doing a whole lot better than the conventional talking heads who lead the sheeple from one shearing to another.Mike Mnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-62151262580675556542010-12-20T16:41:11.668-05:002010-12-20T16:41:11.668-05:00@ Mike M:
"Second, tell me, Anonymous, AP Le...@ Mike M:<br /><br />"Second, tell me, Anonymous, AP Lerner, LK and those subscribing to similar viewpoints"<br /><br />I'll give you the benefit of the doubt since you probably have not been following my comments (and, frankly, why would you follow my comments. I'm just some random commenter on a random blog) but I am not a Keynesian, a neo Keynesian, and, in fact, in many of my comments I have a negatively commented on all neo liberal economics and the myths they pawn off as facts (and that includes Austrians). When appropriate, I have stated when I agreed with Prof. Anderson, and when I think Krugman is way off base. And I post on this blog not to defend Krugman or Keynesians, but to defend reality and common sense and to better understand why people have bought into an ideology (Austrian economics) that is supported by little to no empirical evidence. While I believe it's simple minded and a mistake to subscribe to one ideology, many of my views on monetary and fiscal policy are based off MMT (or what I like to call operational fact) so feel free to label me a chartalist/MMT'er/believer in functional finance if you absolutely must put me in a box. <br /><br />"do you put your money where your mouth is?"<br /><br />Yes. I allocate capital for a living. And while you have not way of knowing this, very successfully. If you have been paying attention to some of my comments, you'll see just how correct I have been on markets since starting to post on this blog....<br /><br />"I subscribe to the Austrian view (admittedly not perfect) and I invest accordingly. I don’t just pontificate in abstraction."<br /><br />How's that working out for you? I hope you're doing better than Peter Schiff.sb101https://www.blogger.com/profile/05719317618259246022noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-91200718774941943332010-12-20T16:38:04.672-05:002010-12-20T16:38:04.672-05:00Sorry, that last sentence of the above post of min...Sorry, that last sentence of the above post of mine is ineligible. It should read,<br /><br />"Economics does not explain <i>why</i> people act the way they do, only what will occur if certain actions are taken."Jonathan M.F. Catalánhttp://www.economicthought.net/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-90764119479568797502010-12-20T16:36:24.652-05:002010-12-20T16:36:24.652-05:00Mike,
Economic theory is not about human behavior...Mike,<br /><br />Economic theory is not about human behavior. It does not explain why humans act in the way they do. It explains causal relationships, based on the fact that humans act. Sound economic theory is universally true, because it explains relationships.<br /><br /><i>If</i> A action is taken, the consequence is B. These types of theories <i>are</i> "watertight".<br /><br />From <i>Human Action</i>,<br /><br />"The a priori sciences—logic, mathematics, and praxeology—aim at a knowledge unconditionally valid for all beings endowed with the logical structure of the human mind." (p. 57)<br /><br />Economics, if logically rigorous and sound, is "watertight" and universally true. It does not change depending on people's subjective valuations. It is not an economics why explains <i>why</i> people act they way they do, only what will occur if certain actions are taken.Jonathan M.F. Catalánhttp://www.economicthought.net/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-951392436548938152010-12-20T15:57:47.740-05:002010-12-20T15:57:47.740-05:00Jonathan said:
“Paul's priority is not to esta...Jonathan said:<br />“Paul's priority is not to establish a watertight economic general theory.”<br /><br />Since economics is essentially about human behavior, such a theory does not, nor will it ever exist.Mike Mnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-78170128493869522772010-12-20T15:40:35.531-05:002010-12-20T15:40:35.531-05:00My point is that criticism of Paul's economics...My point is that criticism of Paul's economics should be done while recognizing that Paul is not an economist. I don't mean to say that that should save him from scrutiny.<br /><br />Also, whether or not Paul should be more careful is debatable. Paul's priority is not to establish a watertight economic general theory. He is spreading a message, and flawed or not his strategy has worked. That some leave with a not-entirely-accurate view of economics is unfortunate, but the same is true whether they learn from Paul or they learn it from Obama, or even Krugman.<br /><br />Paul is first a politician, and that is the card he is playing.Jonathan M.F. Catalánhttp://www.economicthought.net/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-16632345928162135042010-12-20T14:50:20.362-05:002010-12-20T14:50:20.362-05:00All the perplexities, confusion and distresses in ...All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation. <br />–John AdamsMike Mnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-2704890263473751182010-12-20T14:42:25.389-05:002010-12-20T14:42:25.389-05:00AP Lerner,
Krugman has never been a fan of Obama,...AP Lerner,<br /><br /><i>Krugman has never been a fan of Obama, and in fact called him a centrist disguised as a progressive many times over. But hey, that line above fit with what Prof. Anderson was selling that day.</i><br /><br />Here is what Krugman had to say on election night (emphasis is mine):<br />"A magnificent victory for Barack Obama. And bear in mind that the campaign, in its final stages, was really about different philosophies of governing. This wasn’t like the 2004 campaign, which was essentially fought over fake issues — Bush running on national security and social issues, then claiming that he had a mandate to privatize Social Security. <b>In this election, Obama proudly stood up for progressive values and the superiority of progressive policies</b>; John McCain, in return, denounced him as a socialist, a redistributor. And the American people rendered their verdict.<br /><br />Now the work begins."<br />http://krugman.blogs.nytimes.com/2008/11/04/mandate/<br /><br /><i>Then just do a quick search of this blog and you'll see the countless times Prof. Anderson calls Krugman a hack, liar, fraud, etc.</i><br /><br />In fairness, the subheading at the top of this blog reads:<br />"I am part of the Austrian School of Economics, and I critique Krugman's writings from that perspective."<br /><br /><i>But he authored a book called 'End the Fed'. Should he be held accountable for what he publishes? Shouldn't he be questioned like an economist if he is going to play one on TV?</i><br /><br />I think you are right about this AP. Ron Paul should not be this careless.Daniel Hewittnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-70889178419822450262010-12-20T14:38:29.615-05:002010-12-20T14:38:29.615-05:00This nonsensical banter would be amusing if it did...This nonsensical banter would be amusing if it didn’t affect people’s real lives. This Keynesian/neo Keynesian tripe that treats the world like a science experiment to be tinkered with is immoral.<br /> <br />First, this elitist attitude that implies that only properly trained and educated “economists” can possibly understand economics is first rate arrogance. I know dozens of business owners (not corporate executives) who understand economics better than the “experts.” They don’t have Ivy League educations, nor command of the right language, nor travel in the “proper” circles or a library full of academic books but they get it because they have to operate in the real world of commerce every day and survive. I suspect most of the people on this board have never run a business.<br /> <br />Second, tell me, Anonymous, AP Lerner, LK and those subscribing to similar viewpoints; do you put your money where your mouth is? That is, do you invest your money accordingly to economic philosophical beliefs? If not, then your opinions are nothing more than the byproduct of a bloviating blowhard. I subscribe to the Austrian view (admittedly not perfect) and I invest accordingly. I don’t just pontificate in abstraction.<br /> <br />Finally, As for the criticism of Libertarian philosophy that I see frequently here, I fail to see how a philosophy that embraces liberty and recognition of the individual as a sovereign so offensive. No it’s not perfect, but I would rather err on the side of liberty than Statism. It is only the self appointed elites that believe they possess the omnipotent wisdom to decide other people’s lives for them. As for Ron Paul, the man is not perfect (who among us is?) but he advocates from a position of individual liberty. For that reason alone he has my respect and benefit of the doubt.Mike Mnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-19476062129711677742010-12-20T13:35:17.174-05:002010-12-20T13:35:17.174-05:00"And when are you going to post the evidence ..."And when are you going to post the evidence to support your accusation about Dr. Anderson?"<br /><br />Well let's see, in the post I referenced was titled Krugman Endorses Madoff. That is a pretty dangerous claim. But we'll take Prof. Anderson word that was tongue and cheek. Where does he make things up? This comment from this post http://krugman-in-wonderland.blogspot.com/2010/12/krugman-freezes-out-obama.html is 100% false:<br /><br />"When Barack Obama was elected President of the United States two years ago, Krugman was among those shouting the "hosannas" and throwing palm branches at the feet of the Messiah"<br /><br />Krugman has never been a fan of Obama, and in fact called him a centrist disguised as a progressive many times over. But hey, that line above fit with what Prof. Anderson was selling that day.<br /><br />Then just do a quick search of this blog and you'll see the countless times Prof. Anderson calls Krugman a hack, liar, fraud, etc. Frankly, I could care less what he calls Krugman. I mean, if Prof. Anderson would rather call Krugman names then answer my questions on interest rates, where the TARP funds came from, and when will the USD collapse like and he the other Austrians dreamers claim is completely his right. Just don't get all righteous and moralistic and say things like "Krugman instead just uses dishonesty and personal attacks. This speaks for itself" when you play the same game of name calling and deception. The reality is both Krugman and Prof. Anderson are ideologues, and both are more interested in proving themselves right than actually understanding the world around them. But this could be said for the entire economics profession these days...so let's keep up the personal attacks and name calling! It's way more fun and oh soooooooo productive!<br /><br />"It's true that people like Ron Paul have been sloppy on their economics, but Paul is not an economist and he shouldn't be treated as one. "<br /><br />But he authored a book called 'End the Fed'. Should he be held accountable for what he publishes? Shouldn't he be questioned like an economist if he is going to play one on TV?sb101https://www.blogger.com/profile/05719317618259246022noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-17916977918522976312010-12-20T12:21:51.052-05:002010-12-20T12:21:51.052-05:00It's true that people like Ron Paul have been ...It's true that people like Ron Paul have been sloppy on their economics, but Paul is not an economist and he shouldn't be treated as one. If one was to attack Paul's economics then one has to attack the real theory that Paul bases his opinions on and that is that of <i>Human Action</i>.Jonathan M.F. Catalánhttp://www.economicthought.net/noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-85822293182533418092010-12-20T12:16:46.362-05:002010-12-20T12:16:46.362-05:00AP Lerner,
Ron Paul (and Peter Schiff) has made a...AP Lerner,<br /><br /><i>Ron Paul (and Peter Schiff) has made a career out of misleading the ignorant.</i><br /><br />Then why do their supporters understand the differences?<br /><br />And when are you going to post the evidence to support your accusation about Dr. Anderson?Daniel Hewittnoreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-3004926792509583702010-12-20T12:14:25.837-05:002010-12-20T12:14:25.837-05:00Nice job, Alexandra. In an earlier post, I had the...Nice job, Alexandra. In an earlier post, I had the full set of quotes from Ron Paul, which make it clear that Krugman's depiction of the "regulation" quote is dishonest.William L. Andersonhttps://www.blogger.com/profile/01802990642236807359noreply@blogger.comtag:blogger.com,1999:blog-6276561747841568697.post-91496598087684632482010-12-20T12:13:42.191-05:002010-12-20T12:13:42.191-05:00Hey, AP "No theory, just facts!" Lerner:...Hey, AP "No theory, just facts!" Lerner:<br /><br />Where's all the stuff going to come from to satisfy all of this unpayable debt?Bob Roddisnoreply@blogger.com