Thursday, January 5, 2012

Krugman condemns himself

Paul Krugman wants us to believe that he first looks at the situation, and then tries to determine what theory would apply to it (or make up a new theory). He, dear reader, never comes into a situation with preconceived notions, unlike someone like, say, Tyler Cowen.

Yes, this someone who believes that a babysitting co-op in Washington provides the appropriate "model" for an entire complex economy. The co-op printed more coupons (money) and that allegedly fixed everything (although it didn't), so if the Fed prints more "coupons," then our economy will recover.

Yes, the perfect model. Krugman condemns in others what he does himself.


ayassos said...

He's being remarkably thin-skinned these days. No one gets more personal or insulting than Krugman, but he's determined to portray himself as above the fray. It's a very funny spectacle to behold, actually. He should read his Robert Burns and realize it's a gift "to see ourselves as others see us."

Lord Keynes said...

"Paul Krugman wants us to believe that he first looks at the situation, and then tries to determine what theory would apply to it"

Unlike Austrian cultists, for whom every trade cycle in history must - absolutely MUST! - be explained by a fantasy business cycle theory, based on neoclassical general equilibrium theorizing and a non-existent unique natural rate of interest.

William L. Anderson said...

Amazing. I don't know of any Austrians who hold that the ATBC depends on one single rate of interest, yet you persist in saying something that is not true. Furthermore, you never have been able to explain why it is that you believe (like Krugman) that Obama can subsidize the economy into recovery via "green jobs."

At least Keynesians don't have to depend upon a theory by an upstanding person, unless pedophilia falls in the "OK" category.

Lord Keynes said...


"It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history.” (Mises, L. von, 1978. Liberalism: A Socio-Economic Exposition (2nd edn; trans. R. Raico), Sheed Andrews and McMeel, Mission, Kansas. p. 51).

Do you enjoy invoking economic theories from a vile, shameful fascist-lover who declared that the "merit that Fascism has thereby won for itself will live on eternally in history"?

Invoking the ad hominem fallacy is as easy as anything.

"Amazing. I don't know of any Austrians who hold that the ATBC depends on one single rate of interest"

Oh dear, so Austrians don't posit a bank/money rate going below a unique natural rate, conceived either (1) in Wicksellian terms (as in Hayek) or (2) as an equilibrium rate (as in Garrison)??

Perhaps you better bone up on ABCT.

Bob Roddis said...

I submitted the following comment regarding this entry on LK’s blog. He usually publishes what I submit.

The idea that all (non-mentally ill) human voluntary action is purposeful? That is a concept so trivial that it can be accepted by all economic schools, even Marxists.

The central Austrian concept is the pervasive IGNORANCE of individual human beings. Nobody knows what anyone else is thinking and the only way to get some grip on what they are thinking and “demanding” is through unadulterated free market prices. Socialism abolishes those prices and Keynesian policies DISTORT them. How that distortion plays out is a question of fact. Government officials are just dumb humans like everyone else and operate almost as blindly under Keynesianism as under a Soviet system of price abolition. The job of the Keynesian in this debate is to provide evidence that government officials a priori have some type of special knowledge that allows them to plan the lives of the mundanes that the Austrians insist such officials do not and can never have. THAT IS THE CENTRAL AUSTRIAN CONCEPT.

Further, all that is meant by a natural rate of interest or equilibrium pricing are those interest rates and prices that would obtain in the unadulterated market. Nothing more, nothing less. As Hayek said in 1975*:

The primary cause of the appearance of extensive unemployment, however, is a deviation of the actual structure of prices and wages from its equilibrium structure. Remember, please: that is the crucial concept. The point I want to make is that this equilibrium structure of prices is something which we cannot know beforehand because the only way to discover it is to give the market free play; by definition, therefore, the divergence of actual prices from the equilibrium structure is something that can never be statistically measured.

Those are the simple basic concepts that you and all the other anti-Austrians refuse to comprehend.

Held at the American Enterprise Institute on April 9, 1975

young austrian said...

my favorite part of the krugman post:

"But sometimes people with impressive credentials do talk complete nonsense."

My thoughts exactly, Paul, every Monday and Friday morning. I also like the title of the post, "the nonsense problem." He should consider adopting that as a tagline for his writing.

ArbutusJoe said...

Tiger Woods' ex is jumping on the Krugman economic bandwagon. It's not aliens or WW2, but it's a start. Who says the rich aren't job creators?