Now, I agree with Krugman that whatever the guy wrote is his business and the tactics that Republicans are using are reprehensible. If Krugman were simply to stop there and defend academic freedom, I'd be his biggest cheerleader.
However, Krugman being Krugman, he cannot stop at that point, and given the viciousness of his attacks on people who disagree with him, I would say that Paul Krugman is little more than someone who believes in "free speech for me, but not for thee." Instead, he then goes to the "Climategate" emails that were made public a couple of years ago and claims that there was nothing in them that smacked of fraud or even bad science.
Not surprisingly, a real scientist has a different take. Professor Emeritus of physics Hal Lewis of the University of California at Santa Barbara recently resigned from the American Physical Society after 67 years of membership and a distinguished career. He is not a right-winger, nor someone who believes science should be politicized. But it also is clear he does not see the "Climategate" emails in the same way Krugman sees them, writing in his resignation letter:
It is of course, the global warming scam, with the (literally) trillions of dollars driving it, that has corrupted so many scientists, and has carried APS before it like a rogue wave. It is the greatest and most successful pseudoscientific fraud I have seen in my long life as a physicist. Anyone who has the faintest doubt that this is so should force himself to read the ClimateGate documents, which lay it bare. (Montford’s book organizes the facts very well.) I don’t believe that any real physicist, nay scientist, can read that stuff without revulsion. I would almost make that revulsion a definition of the word scientist.He goes on:
So what has the APS, as an organization, done in the face of this challenge? It has accepted the corruption as the norm, and gone along with it. For example:I would urge you to read the letter in full, as it tells what happens when governments that want certain results throw money at scientists. Now, I am sure Paul Krugman would not mind this one bit, and I doubt he would give someone like Professor Lewis the back of his hand (or worse).
1. About a year ago a few of us sent an e-mail on the subject to a fraction of the membership. APS ignored the issues, but the then President immediately launched a hostile investigation of where we got the e-mail addresses. In its better days, APS used to encourage discussion of important issues, and indeed the Constitution cites that as its principal purpose. No more. Everything that has been done in the last year has been designed to silence debate
2. The appallingly tendentious APS statement on Climate Change was apparently written in a hurry by a few people over lunch, and is certainly not representative of the talents of APS members as I have long known them. So a few of us petitioned the Council to reconsider it. One of the outstanding marks of (in)distinction in the Statement was the poison word incontrovertible, which describes few items in physics, certainly not this one. In response APS appointed a secret committee that never met, never troubled to speak to any skeptics, yet endorsed the Statement in its entirety. (They did admit that the tone was a bit strong, but amazingly kept the poison word incontrovertible to describe the evidence, a position supported by no one.) In the end, the Council kept the original statement, word for word, but approved a far longer “explanatory” screed, admitting that there were uncertainties, but brushing them aside to give blanket approval to the original. The original Statement, which still stands as the APS position, also contains what I consider pompous and asinine advice to all world governments, as if the APS were master of the universe. It is not, and I am embarrassed that our leaders seem to think it is. This is not fun and games, these are serious matters involving vast fractions of our national substance, and the reputation of the Society as a scientific society is at stake.
3. In the interim the ClimateGate scandal broke into the news, and the machinations of the principal alarmists were revealed to the world. It was a fraud on a scale I have never seen, and I lack the words to describe its enormity. Effect on the APS position: none. None at all. This is not science; other forces are at work. (Emphasis mine)
However, since Krugman is talking about academic freedom, what about the case of Pat Michaels, the former State of Virginia climatologist and professor at the University of Virginia. A. Barton Hinkle writes:
They (conservatives) recall how Virginia’s former state climatologist, Pat Michaels, essentially was hounded out of his job at the University of Virginia because—although he agrees with the mainstream view that human activity is warming the planet—he is insufficiently alarmist about it. Gov. Tim Kaine’s administration publicly disowned Michaels. Environmentalists tried to have his funding cut. And the champions of academic freedom now so vocally defending Mann were, back then, conspicuously silent.Since I never read any defense of Michaels' academic freedom from Krugman or his ilk, I think it is safe to say that Krugman most likely approved of what happened to him. After all, Michaels, in Krugman's parlance, is a "denier," and thus loses any academic credibility or right even to be teaching in a university.
No doubt, this is just another example of the double standard Paul Krugman employs when gracing us with his opinions. If Krugman or people with whom he agrees say something, then it must be supported in the name of free speech and academic freedom. However, disagree with the Master and his opinions on a variety of things, then release the hounds!
Hal Lewis is old news. Besides, like everything else regarding the religion of climatology, the enviro-nazis have already done the hatchet job on his credibility.
As I recommend to everyone, read the Climategate material for yourself. I STRONGLY recommend the ReadMeHarry.txt file. It's the biggest story of the entire scandal so of course it was ignored by everyone in the mainstream. Program managers lie. Programmers do not.
Notice how Prof. Anderson chooses to, again, pick a political, not an economic fight, w/ Krugman. Notice how Prof. Anderson did not even bother to read tve Op-Ed Krugman refers to. Notice how Prof. Anderson refuses to address the operating realities of MMT.
Shouldn't Prof. Anderson drop economist from his title?
@AP Lerner ---
Krugman advances not a SINGLE economic argument nor observation within the entire Op/Ed, so criticizing Dr. Anderson for not sticking to the economic themes therein is idiotic.
@David B ---
You are right, the damning stuff is in the HarryReadMe.txt file. Notice what Krugman does here:
"Nothing in the correspondence suggested any kind of scientific impropriety; at most, we learned — I know this will shock you — that scientists are human beings, who occasionally say snide things about people they dislike.
Krugman is very careful to talk about what's in "the Correspondence," because he knows that statement won't fly if one considers the other files that were liberated at East Anglia.
Krugman tried to smack down MMT last Friday.
The MMTers were out in force in the Krugman comments by the hundreds, including Mosler and Mitchell themselves. They claim that KRUGMAN MISREPRESENTED MMT! IMAGINE THAT!
After reading all those comments and collecting all those MMT links, I was compelled to comment too:
I wasn’t drinking over the weekend so I held back on what I really think about MMT.
It seems to me that government freeways, eminent domain and funny money housing booms result in sprawl. Sprawl leads to more activity and more CO2.
Krugmanite-Keynesianism causes global warming. The horror.
Krugman has even more trouble with MMT today:
AP Said “Notice how Prof. Anderson chooses to, again, pick a political, not an economic fight, w/ Krugman”
AP your comment is evidence of how you final to understand or don’t wish to acknowledge, that in the current state of affairs politics and economics are inextricably connected. They shouldn’t be but they are. Given that how do you have a real world non-academic conversation about economics without considering politics? The challenge for people is having the discipline to incorporate the political element in a non-advocacy manner.
I think you miss an important point- in the case of Michaels and other climate skeptics, practitioners of the field are the ones pushing these people out of academia. The scientist doing the pushing may be left-leaning or democrats, or what have you, but they also do work in the field.
In the case of Krugman is discussing, the republican party (literally) is trying to gain these emails. Its not right-leaning historians, its literally the republican party. I don't know
Also, the op-ed Cronin wrote did not praise democrats- it just outlined the history of both bargaining rights and open meetings in Wisconsin, pointing out that the republican party was actually responsible for the creation of much of the laws leading to these rights.
If MMT works so darn well, what was Abba Lerner doing constructing a Rube Goldberg hell of a micro-managed price control system as late as 1980, 2 years prior to his death? From the previously quoted article by David Colander, a co-author of a 1980 book with Lerner:
Initially he toyed with various administrative wage and price control policies, but he found those lacking and soon gave them up. He replaced them, first, with a tax based incomes policy and ultimately, a market based[!!!] incomes policy in which property rights in prices are set and individuals have to buy the right to change prices from others who change their price in the opposite direction. It was this idea that formed the basis of our market [!!!!!!] anti inflation (MAP) book. (Lerner and Colander 1980) Under MAP, rights in value added prices would be tradable so that any firm wanting to change its nominal price would have to make a trade with another firm that wanted to change its nominal price in the opposite direction. Thus, by law, the average price level would be constant but relative prices would be free to change [page 12]
“so criticizing Dr. Anderson for not sticking to the economic themes therein is idiotic.”
At the top of Krugman’s blog it says ‘Op-Ed’. At the top of this blog it says ‘I am part of the Austrian School of Economics, and I critique Krugman's writings from that perspective’ Could you please explain the critique from an Austrian perspective in this blog post?
@ Bobby Boy
“Krugman has even more trouble with MMT”
It appears you have more in common with KRugman than you want to believe: ignorance to the operating realities of the world.
“Also, the op-ed Cronin wrote did not praise democrats- it just outlined the history of both bargaining rights and open meetings in Wisconsin”
So the question is, is Prof. Anderson intellectually dishonest, or lazy, to recognize this point?
Now can sit back and watch Dr. K and MMTers discuss "Economics" without mentioning silly things like people and scarce resources.
Nice comments Bob.
The one thing MMT cannot tolerate is just how roundly (and justifiably) it has been ignored.
They sense a nanosecond in the sun and have mobilised their ants across the blogosphere.
Could you please explain the critique from an Austrian perspective in this blog post?
Here’s the short answer.
Keynesianism is a hoax perpetuated to allow government control of people and things it has no moral or constitutional right to control. MMT is Keynesianism on steroids. Lerner’s book is called “The Economics OF CONTROL”. He realized that mainstream slaughterhouse Stalinist-style socialism wasn’t working and proposed giving the human dogs a little more freedom to better serve the slave-master state.
Keynesians and MMTers refuse to debate the Austrians and ignore their concerns. Always. Keynesianism got to where it is through intellectual intimidation with strong media and government support for that process.
The global warming hysteria is a similar hoax perpetuated to give the slave-master state even more control over the human dogs so that one must have permission from the slave-master to do ANYTHING because doing anything is going to release CO2. It gained prevalence through the same techniques of intellectual intimidation with strong media and government support similar to that in support of the Keynesian Hoax. Likewise, the warming hysterics refuse to debate the skeptics, just like Keynesians refuse to debate Austrians.
Krugman is constantly harping that it is the anti-Keynesians who are not being fair in the “debate” and is now accusing “the right” of intellectual intimidation that has been practiced by the left on GW and economics forever. He’s either a liar or a fool or both.
Isn’t the MMTer's use of generic aggregates bizarre?
Apparently, through the magical auto-mechanical nature of double entry bookkeeping, a deficit created to purchase materials and labor to build high quality pianos and provide for the teaching of child prodigies to play them would have the EXACT same effect as an identical deficit created by providing construction workers with pre-paid passes for slimy lap dances and shots at Detroit strip clubs.
These types of debt are necessary for the government to provide savings to the private sector!
"Could you please explain the critique from an Austrian perspective in this blog post?"
Admittedly, it is difficult for Prof. Anderson to given an "Austrian perspective" when Krugman's posts are 1% economics and 99% shrill partisan screeds.
Maybe the "Austrian perspective" is to point out how asinine it is for a supposedly esteemed (Nobel Prize-winning) economist can waste so much time trying to piss all over people with whom he is ideologically opposed and giving us a living, breathing definition of hypocrisy.
AP Lerner has no familiarity with Austrian concepts whatsoever. Further, Austrians have nothing to do with "neo-liberals". Further, Austrians and MMTers agree that the government can just print the money to pay the debt. But the MMTers have no economic theory to explain what happens next or from where the real stuff will come to ultimately satisfy that debt. They do not address the concerns expressed by the ABCT. Ever. Crazed MMTer Michael A. Kamperman explains reality just like an Austrian would (but thinks it’s cool, not appalling):
On the national level no one [??!!!] is talking about the federal governments ability to print money and end the current depression……The reason for the sacrifice is because we are afraid our currency and economy will collapse into bankruptcy and hyperinflation when we reach the point where we are unable to pay back the debt caused by large deficits. It matters not whether the number entered into the computer to print is $1, or $10, or $10 million, or $10 trillion all that is required for the U.S. to pay back its debt is to enter any number and hit print. It’s not like gold, we cannot run out of the stuff.
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Nothing in the correspondence suggested any kind of scientific impropriety.
This is an outright lie. There is very strong suggestion of scientific impropriety.
Michael Mann writes:
It would probably also be helpful for me to point out, without naming names, that many of our most prominent colleagues in the climate research community, as well government funding agency representatives, have personally contacted me over the past few weeks to express their dismay at the way they believe this study was spun. I won't get into the blame game, because there's more than enough of that to go around. But when the leaders of our scientific research community and our funding managers personally alert us that they believe the credibility of our field has been damaged, I think it is time for some serious reflection on this episode.
There is only one interpretation: if you say the wrong thing we threaten to withdraw your funding. This is not science, it's a paid for opinion. Only an economist would call this science (and only then as a study in how far people will delude themselves and others in return for payment).
Gary North today has an excellent article about how academic economists are and basically must be whores for the Fed, the banking cartel and the university cartel:
Academics employed to promote carbon hysteria respond to similar bad incentives.
In both cases, the scam is similar in that they are both seeking to impose horrific controls to cure problems that don't actually exist while granting massive authoritarian powers to magic bureaucrats (them). I have been noting that the MMTers rely upon the refuted notion that "laissez faire" caused the Great Depression and that we need manipulation of "aggregate demand" to restart the spinning machine "economy". Just like Krugmanites.
As you have seen, I have been willing to research the basic "axioms" of MMT. The more I learn, the more horrified I become. It's strange (or is it) that the MMTers refuse to investigate basic Austrian axioms and meticulously maintain their total ignorance. Just like Krugmanites.
On the "Krugman predicts deflation and global warming" front,
Wal-Mart CEO expects inflation:
On the global warming front:
April Fools' day nor'easter coming:
We clearly have such an emergency that requires us to give up all of our freedoms to the omniscient magic bureaucrats.
A question for Austrian's in general. My understanding of the Austrian business cycle is that we were badly invested in housing, we had a big crash, and unemployment is a result of workers having the wrong set of skills.
But unemployment is up across the board, including recent college graduates. How can new graduates have a skill mismatch?
How can new graduates have a skill mismatch?
Who are they supposed to work for and at what salary? The short answer is that many people have been impoverished by the funny money induced malinvestments. Further, the economy cannot recover with interest rates near zero and government spending out of control. Due to the funny money induced impoverishment, their skills might as well include janitorial services for $6 an hour. My general explanation of the housing boom is here:
Jonathan Finegold Catalan has an outstanding article today with the Austrian explanation of the discoordination caused by government spending. It is the argument that non-Austrians meticulously and purposefully avoid understanding, much less engaging.
He completely smacks down idiotic Keynesian notions of "idle resources".
The wonders of our Modern Monetary Theory regime! Operational reality! Facts on the ground!
"Libya-Owned Bank Drew at Least $5 Billion in Loans From Fed"
The Fed is unconstrained by the Constitution, Congress or morality! This is just so cool that I can hardly breathe!
"Jonathan Finegold Catalan has an outstanding article today with the Austrian explanation of the discoordination caused by government spending."
I don't buy it. Catalan would have us believe that the market can overcome every hurdle in its way except government spending? I can certainly imagine cases where simple regulations can make a market more efficient, so "all government spending = bad" seems ill founded.
Also, his discussion of idle resources is a bit lacking. An unemployed person represents BOTH idle consumption and idle production.
Now, as to malinvestments, I guess I don't understand how this can effect every sector? If the argument is that putting money into housing TAKES AWAY from other sectors, then shouldn't other sectors have suffered during the boom and be rebounding now? i.e. less investment in computing, etc during the boom, more investment now?
Now that the bubble has collapsed, shouldn't the money that was going into housing now go into other pursuits?
How can this business cycle theory help us explain the piles of cash companies like Apple are sitting on?
Will i think you have a feww hurdles to overcome in understanding austrian business cycle.
1. Government spending causes malinvestments across the board. Why? Because the resources the government employs disrupts the price signals everyone uses to coordinate their daily lives. The government subsidizes corn. We grow tons more than we need to eat, so we start finding other things to do with it. Put it in sodas, try to run our cars on it. The government gives trillions to failed banks. Those banks stay in business with toxic assets and self destructive business practices and other more sound banks that arent politically connected go under and we are all worse off for losing the "healthy" banks and propping up failed financial firms.
2.Malinvestments. What is a malinvestment? Suppose you own a restaraunt and the circus comes to town. Your place is packed with clowns, lion tamers, and acrobats for a week straight. You decide since your revenue has increased you should invest in a huge new addition for your increased business. A week into the construction of your new dining area the circus leaves town and your revenue falls off. You can no longer afford to make payments on the loan you took out for the construction and your entire business goes under. Unsustainability is the hallmark of malinvestments.
3. Asset bubbles. An asset bubble is as much a drastic influx of speculative purchases as much as it is a drastic uptick in the PERCEPTION of the value of those assets. Yes tons of money flowed into the housing sector, but simply because that bubble burst doesnt mean those resources are suddenly available to be put to use elsewhere. If you buy a home you think is worth 500,000 dollars but the most someone will pay for it is 250,000 it does not free up 250,000 dollars of resources to be spent elsewhere, it is a loss of value. As it is with houses the same can be said for the currency itself. Perhaps a home worth 250,000 dollars sells for 500,000 two years later. You may assume a massive profit was made but if that 500,000 dollars can only purchase the same resources as the 250,000 two years ago then no profit was made at all because the asset gained no value, it simply required twice as much currency due to the loss of value in the currency.
How can this business cycle theory help us explain the piles of cash companies like Apple are sitting on?
They make consumer products that everyone wants to buy. The products generally do not require long term financing. The central bank’s screwing with the interest rate “price” tends to mess up long term calculation more than short term calculation. ABCT 101. They also have patents to protect them from competition. I do see the issue at all.
Like all non-Austrians, you don’t seem to get the essential nature of prices and the pricing process. Free market prices are the essential conveyor of economic information. The most important price is a FREE MARKET INTEREST RATE. Only with a FREE MARKET INTEREST RATE can we best know the general time preference of society. Government spending and funny money dilution break the thermometer which provides the essential economic temperature readings. Current insane levels of government spending and near zero interest rates prevent the resetting of prices to reflect current realities causing more misery and so-called “idle” resources.
Theres a lot more dealing with misallocation of resources during stages of production. This was merely my ametuer attempt to explain. hope it helped
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