The Great Inflationist Kneecapper

In an interview many years ago, Victor Navasky, the former editor of The Nation, described the New York Post as an entity that would "kneecap" anyone it did not like, and he did a "rat-a-tat-tat" imitation with his hands. (Not that Navasky and The Nation ever would do such a thing themselves.)

Economists at one time did not publicly kneecap each other. They hardly were (or are) angels behind the scenes, and I have been witness to some real ugliness that has transpired in economics departments, and ideology really had little or nothing to do with the infighting.

Over the years, I have been privileged to have met economists who won Nobel prizes and read their material. Some were forceful in what they wrote, and others were not, but even in their popular press columns, they never launched outright personal attacks on other economists, and when they mentioned others, they dealt with their arguments as they understood them.

I guess that Paul Krugman represents a new era in how Nobel-winning economists present themselves in public, and his column on Rep. Ron Paul's hearing on the Federal Reserve System once again crosses that line of civility and decency. (Perhaps it is better to argue that Krugman long ago crossed the line and decided just to stay there, and maybe build a mansion.)

It is perhaps ironic that Rep. William Lacy Clay, a congressman from St. Louis, launched the personal attacks (of which Krugman clearly approves) on Dr. Thomas DiLorenzo by claiming that Austrian Economics is "unscientific" because it relies upon deductive logic. As anyone who has taken a logic class knows, the ad homimen, appeal to authority, and the like fall into the category of "informal fallacies," yet, Krugman obviously likes to employ them. Clay also relied heavily upon such fallacies in his "proof" that Dr. DiLorenzo was a fraud.

Now, I always have learned that if one wishes to attack the position of another person, one first should do some fact-checking. First, Krugman's comments:

One of the hearings was called by Representative Ron Paul, a harsh critic of the Federal Reserve, who now has an oversight role over the very institution he wants abolished in favor of a return to the gold standard. Mr. Paul’s subcommittee called three witnesses, one of whom was an odd choice: Thomas DiLorenzo, a professor at Loyola University and a senior fellow at the Ludwig von Mises Institute.

What was odd about that choice? Well, Mr. DiLorenzo hasn’t actually written much about monetary policy, although he has described Fed policy — not just recently, but since the 1960s — as “legalized counterfeiting operations.” His main claim to fame, instead, is as a critic of Lincoln — he’s the author of “Lincoln Unmasked: What You’re Not Supposed to Know About Dishonest Abe” — and as a modern-day secessionist.

No, really: calls for secession run through many of Mr. DiLorenzo’s writings — for example, in his declaration that “healthcare freedom” won’t be restored until “some states begin seceding from the new American fascialistic state.” Raise the rebel flag! (Emphasis mine)

Now, here is Dr. DiLorenzo's reply:

The junior high schoolish smart aleck Paul Krugman, who writes for that well-known leftist tabloid the New York Times, wisecracks about the Ron Paul Fed hearings in his recent column where he says that I was writing about the Fed as “a legalized counterfeiting operation” as far back as the 1960s. That’s unlikely since the very first thing that I ever wrote that was published was an article for the peer-reviewed Southern Economic Journal in 1980, shortly after I finished graduate school. He must have me confused with Ludwig von Mises or Murray Rothbard. I guess all Austrians look alike to some people.

Now, why does Krugman go rabid at any criticism of Abraham Lincoln? He explains:

He (Lincoln) was, after all, the first president to institute an income tax. And he was also the first president to issue a paper currency — the “greenback” — that wasn’t backed by gold or silver.

Yes, Lincoln was a "stimulus" sort of guy, someone who liked to print money. However, if one reads through the Krugman columns, one finds that anyone critical of such an action is to be labeled...well, whatever Krugman wants to call him. A racist? Yes. An ignoramus? Yes.

So, Paul Krugman is becoming unleashed. Disagree with him on monetary policy, global warming, the current inflation situation, taxes, and whatever else and you are not simply wrong. No, you oppose all these things because you are evil. You want people to lose their jobs and be unemployed and poor forever. There is no other explanation.

Paul Krugman Smears Tom DiLorenzo and Ron Paul

Leave it to Krugman to use smear tactics to discredit Ron Paul's hearing on the Federal Reserve System. I put his post in full:

Mike Konczal has a post about Ron Paul’s first hearing on monetary policy, in which he points out that the lead witness is a big Lincoln-hater and defender of the Southern secession.

And it’s true! I went to his articles at Mises, and clicked more or less idly on the piece about American health care fascialism — I guess that’s supposed to be a milder term than fascism, although he seems to equate the two. And sure enough, he ends:

This is not likely to happen in the United States, which at the moment seems hell-bent on descending into the abyss of socialism. Once some states begin seceding from the new American fascialistic state, however, there will be opportunities to restore healthcare freedom within them.

I presume that Amity Shlaes is already working on her Lincoln assessment, The Even More Forgotten Man.

First, Tom DiLorenzo, who wrote the article that so offended Krugman, DOES make clear his use of "fascialism," writing:

Some time ago I invented the phrase "fascialism" to describe the American system of political economy. Fascialism means an economy is part fascist, part socialist. Economic fascism has nothing to do with dictatorship, militarism, or bizarre racial theories. Fascism is a brand of socialism that was the economic system of Germany and Italy in the early 20th century. It was characterized by private enterprise, but private enterprise that was comprehensively regulated and regimented by the state, ostensibly "in the public interest" (as arbitrarily defined by the state).

Socialism started out meaning government ownership of the means of production, but it came to mean egalitarianism promoted by "progressive" taxation and the institutions of the welfare state, as F.A. Hayek stated in the preface to the 1976 edition of The Road to Serfdom. The problems of the American healthcare system are caused entirely by the fact that the government subjects the system to massive interventions, some of which are fascist in nature, while others are socialist.

Second, what is Krugman really trying to say? He is trying to go in the backdoor to smear Rep. Paul with the following syllogism:

• Ron Paul has Tom DiLorenzo testifying at his hearing;
• Tom DiLorenzo has defended southern secession and has criticized Abraham Lincoln;
• Therefore, Ron Paul is a racist and anything he says about the Fed's behavior should be ignored.

Don't kid yourselves about what Krugman is doing. The guy has smeared Ron Paul in the past and now that Rep. Paul is taking aim at the Fed -- something that is in his right to do -- Krugman is going to unleash all barrels on him. And, I am sure that his employer, the NY Slimes, will follow suit.