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Guest Post: Why Paul Krugman Is An Imbecile—or a Fraud
Submitted by the inimitable Gonzalo Lira
There’s a saying in Spanish: Por la boca muere el pez. “The fish dies by the mouth”.
Nobel economics laureate Paul Krugman has a recent op-ed piece in the New York Times which goes an awful long way to showing that he is a complete and utter imbecile—or the worst sort of cheap huckster imaginable.
It is one or the other—there are no other alternatives. This wasn’t a casual blog where Krugman “misspoke”—this was a full-on editorial in the Sunday edition of the Times on Labor Day weekend. So what Krugman said was thought out, and dead serious—and so foolish or ridiculous (depending on your point of view) that he can no longer be taken seriously:
In the piece, titled “1938 in 2010”, Krugman argues that 1938 was similar to 2010, in that the Federal governments’ stimulus program—then implemented by FDR—was insufficient to pull the country out of the Great Depression. Krugman argues that this is similar to what has happened to the Obama administration—Krugman has forever been arguing that the Obama stimulus package was “not enough”.
This in itself is not objectionable—in fact, I think policy disagreements are a good thing. They lead to ultimately better solutions, if all sides of a policy debate allow that opposing sides might have very valid points. Krugman’s very valid point is, unemployment in the current Global Depression is severe—therefore, the quick-fix of fiscal stimulus might be best, in order to assuage people’s suffering.
But then, in order to make his point that more stimulus is needed, Krugman crosses the line:
In Krugman’s analysis, 1938 was different from 2010: “Luckily” (most definitely in quotation marks), World War II came to Europe in 1939, and to the U.S. in very late 1941. In Krugman’s analysis, the War saved the U.S. economy. It allowed the Federal government to go into monstrous fiscal debt, in order to fight the war with Nazi Germany and Imperial Japan. This isn’t novel or controversial.
But then, Krugman misleadingly claims the U.S. government “borrowed an amount equal to roughly twice the value of GDP in 1940—the equivalent of roughly $30 trillion today.”
It’s a sneaky asseveration, partly because it sounds plausible—everyone knows the Federal government went into huge debt to finance WWII—and partly because it’s technically accurate: United States’ GDP in 1940—before Pearl Harbor—was $101 billion, and by the end of the war, 1945, the Federal government had borrowed $250 billion. Apply simple math: That’s more than twice 1940’s GDP—closer to 250% of the gross domestic product. Of 1940.
But Krugman is fudging the facts—1945 GDP was $223 billion. So the fiscal debt by 1945 was not “twice the GDP”—it was 116% of GDP. Comparing 1945 debt levels to 1940 GDP numbers isn’t apples to oranges—it’s flat-out misleading.
If you’re going to make a comparison, current debt-to-GDP ratio is much more accurate, in seeing how far the U.S. Federal government went into debt during that period. If we look at the period of the Great Depression and World War II, this is what we find:
(Gross Public Debt, 1930–1950. The blue band is Federal government debt, the red band is state debt, the green band is local debt. Source is here, for both charts and raw data.)
As can be readily seen, the U.S. Federal government debt never surpassed 45% even at the height of the Great Depression. When it peaked in 1946, gross public debt never crossed 130%—and that was after fighting the largest war in human history.
The situation in the U.S. today is nowhere near the same—except in terms of fiscal debt:
(Gross Public Debt, 1970–2010. Color scheme is same as above. Source is here, for both charts and raw data.)
Federal government debt is just shy of 100% of GDP. If we include state and local debt, gross fiscal debt is tiptoeing to 120% of GDP—and now Paul Krugman is saying that even more debt should be piled on.
According to Krugman: It worked in 1945, so it must be good now!
Krugman—obviously—used misleading data points in order to sell his policy prescription. He denies the incredibly different situation the United States finds itself in now, with where it was in 1938. Furthermore, he misleadingly fudges data, mixing 1940 and 1945 data, in order to prove his point.
I will not fall for the trap of inferring that Krugman is arguing in favor of total world war, in order to save the U.S. economy—I think some commentators who are making that inference are driven by mean-spiritedness towards Mr. Krugman.
But I will state—categorically—that Krugman’s misleading use of data to prove his point is something a sophomore eccy student would pull: Not someone who expects to be taken seriously.
If that were his only sin in the piece, then it might be excusable. But then, Krugman makes a truly despicable statement: “Deficit spending created an economic boom [in the post-War years]—and the boom laid the foundation for long-run prosperity.”
Krugman is an imbecile—or he is deliberately distorting history in order to sell his spend!-spend!-spend! bromide like a cheap salesman goosing a distracted customer.
As everyone with even a passing knowledge of post-War history knows, literally the rest of the world was a heap of rubble in 1945—only the United States was untouched by bombs and mortar shells.
The prosperity the United States experienced in the two decades after World War II had nothing to do with deficit spending, and everything to do with the fact that it was the only industrialized nation still standing after a total world war—so the rest of the world was forced to buy from the U.S. because there was no one else left to buy from.
Deficits had nothing to do with it.
Krugman is too smart not to know this—I cannot really believe that he would be ignorant of this basic post-War history.
Therefore, it’s obvious to me that Paul Krugman will say literally anything in order to support his prescription of increased Federal government spending. Not even facts and brute history matter to the man. In a very real sense, Krugman is now Glenn Beck, only with a doctorate in economics, and a hysterical fear and hatred of austerity, rather than terrorists.
I used to take Krugman seriously—often I disagreed with him, but at least I thought he was honestly arriving at his conclusions. But after this piece, I find myself dismissing him with contempt: In his urge to sell his policy prescription, he has sold out his integrity. There is literally no lie or falsehood he will not stoop to, in order to “win” the argument.
Like the fish of the Spanish aphorism, Krugman has killed himself by his mouth.
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And the fact that Paul Krugman is an imbecile or a fraud is a news flash why?!?!?!?
Re. newsflash that Krugman is an imbecile and a fraud: It is TOO a stunning and provocative insight on my part, because, uh—because . . . uh—wait a sec—uh . . .
. . . did everybody know already? Was I like, the last person to figure this out?
Dammit, not AGAIN!!!
GL
Is Krugman including social security and the healthcare costs , that were not in existence back in the 40's, and are not carried on the US books. I am not an economist by any stretch,
but if you add the cost of social security and healthcare on to the debt wouldn't that make his claim more legitimate?
What Krugman conveniently lets go in his analysis is that if deficits argument is true, then why didn't the US fall back into depression by 1946? In fact, the Keynesians late in the war panicked about a depression in 1946 that never occurred. Under their logic then, as is the case now with Krugman, the government spending saved the economy. And absent the government spending, the world would collapse back into depression. Government spending was cut, and the depression never happened. Just like massive government spending hasn't caused a recovery now, more spending will not magically stimulate the economy, and spending cuts will not cause the system to collapse.
History has just not been kind to the Keynesians. They're a dying bunch of sycophants holding on to their coveted and very much discredited tenured jobs at universities with tuition north of $50,000/year. They'll very soon end up in the trash bin of terrible thought movements.
Agreed!
https://www.cato.org/pubs/policy_report/v32n3/cp32n3-1.html
+1
'History clearly shows the government that stimulates the best, taxes, spends, and intrudes the least. In particular, the lesson from 1945-47 is that a sharp reduction in government spending frees up assets for productive use and leads to renewed growth.'
+1
The US was already an industrial power , after the war the Marshall Plan helped , but even if the war had never happened the US would have dominated. In fact , i'd say the war set America back in that the ideas of American and UN control could change the world.
Krugman should listen to men like Edward Luttwak he might learn afew things.
The forgotten man of the 30's was the jobless, the forgotten man of the 2000's are those who saved and didn't outspend their means. Don't be fooled, there is no endgame without a global war, not the kiddie "Saddam isn't playing fair" wars of the last 20 years. Could we still come out on top? Yes, but all Americans must begin to contribute ... 2 years of unemployment is the worst idea Obummer ever had
Great article. Brilliant. Loved every word. Keep up the good work.
Except for the facts.
Pot
Kettle
Black
Except for the carefully selected facts. - fixed it for you.
Hang Krugman from Bernanke's chopper ala Sosa in Scarface!
a BRE-X helicopter ride
Krugman. Imbecile or fraud? I say BOTH!
Check out Krugman using this same WW II fallacy in this video debunking him and exposing the broken window fallacy.
http://www.youtube.com/watch#!v=QG4jhlPLVVs&feature=related
How do we let these nuts get away with this bs?
Have you noticed all these economist fools are absolutely too busy spewing bullshit in the media and attending off season seminars instead of actually sitting down a coming up with concrete solutions.
All we hear is rubric and rhetoric from these IPad armed Phd assholes. I would be very impressed if anyone of them would help come up with a realistic assessment of how America needs to be restructured in order to become competitive once again. That's what the economists are busy doing in China, Brazil and India.
Are you sick and tired of hearing these assholes argue about spending and printing money?
Why are our capital markets dysfunctional
Why is our venture capital model broken
What has happened to our bankruptcy process
Why are we exporting engineers and keeping bankers?
Why have we converted our education system into a debt machine?
What is so special about private equity (go private, IPO, gp private, IPO, more debt, more debt)
What is the bottom line on energy? Yadda, yadda, yadda
Do any of those morons ever dive into these issues or are they all suffering from the same practical cognitive impairment?
Don't answer that...
"Save the Economy, Burn an Economist"
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency involved.”
Ludwig Von Mises
Be that as it may (or will), we still have too many economists on the payroll. I'd rather see them doing something productive like sharpening lawn mower blades so productive Mexican immigrants can work more efficiently.
You give Krugman waaaay too much credit, and Glenn Beck far too little!
http://en.wikipedia.org/wiki/Glenn_Beck
I have a decent amount of gold. I don't give a shit anymore.
HA, I don't give a shit either, matter of fact, I'm gonna have a good laugh when it all comes crumbling down.
Ditto.
.
I junked you, I have young kids, I do care..
If you really cared for your kids, you would be praying for a complete collapse of the current financial/tax reality that faces them.
Ditto, RS
Got gold = no worries. When will I sell my gold? When I NEED to. Not likely that the corner newsstand vendor is going to give me gold-selling tips. It won't be that widely held by the public. They will be caught up short and the calamity will overwhelm them.
Got heirloom seeds and some fertile land as well. Stocked up on OTC medicines and such. Got plenty of tradable goods that will be scarce.
If nothing happens? I can use up all my stores and save a little money in the future. It's a no-lose deal.
When it crashes I'm going to spend all day on youporn masturbating. Because that's what the SEC did when it crashed in 2008.
These people don't give a shit either:
http://www.theonion.com/video/time-announces-new-version-of-magazine-aimed-at-ad,17950/
These people don't give a shit either:
http://www.theonion.com/video/in-the-know-are-tests-biased-against-students-who,17966/
by williambanzai7
Agree wholeheartedly. No these fucks think you can spend your way to prosperity because the whole fucking game is rigged. Money is a debt instrument. To create more you must create more debt. The game is over. We are getting very close to sorting out the losers. Default on the debt. Agree to pay back principal. Abolish the Fed permanently. And hang a few assholes like Paulson, Blankbean, Mozilo, in the square. Send a msg. Figuratively of course.
westmoreland=krugman. send more troops (money) we will win the war (end the recession) heard that song before.
Yes, that was the "light at the end of the tunnel" theme. What a joke.
Perhaps we could have a Krugman Winter, would that be too much to ask?
This is an excellent post, Mr. inimitable Lira.
I just wish those economic scholars, would at some point, realize the effect that Prohibition played in the economy (1920-1933). The unofficial major tax cuts (unlawful beverages no longer taxed); the dark pools of funds used in untracked speculation, being laundered through the stock exchange, and the fact that the same group of people who financed its adoption was the same group which financed its demise.
Some interesting parallels to today.....
Vampyroteuthis wrote:
on Tue, 09/07/2010 - 17:51
#568128
"The article's author or Krugman both fail to mention that one driver..."
Monty Python and the Holy Grail
Scene 5: 'Burn the witch!' - excerpts
CROWD:
A witch! A witch! A witch! A witch! We've found a witch! A witch!
VILLAGER #1:
We have found a witch. May we burn her?
CROWD:
Burn her! Burn! Burn her! Burn her!
BEDEVERE:
How do you know she is a witch?
VILLAGER #2:
She looks like one.
CROWD:
Right! Yeah! Yeah!
VILLAGER #1:
She has got a wart.
VILLAGER #2:
Burn her anyway!
VILLAGER #1:
Burn!
CROWD:
Burn her! Burn! Burn her!...
http://www.mtholyoke.edu/~ebarnes/python/witch-trial.htm
The second biggest aspect of the WWII debt that no one seems to talk about (even the guest author above) is that the U.S. largely borrowed the money from U.S. citizens. After the war, when our economic competitors were greatly weakened or destroyed, the U.S. government was able to pay back the money; the money returned to the hands of U.S. citizens who then spent it within the U.S. creating an even bigger economic boom. Think of it this way: delayed spending. U.S. citizens "put money in the bank" during the 1941-1946 period and then spent the saved up money over the next few decades.
Today the situation is completely different, frighteningly so. U.S. debt is largely owed to foreigners, including a nation that is hostile to us (China) and that we may end up fighting in the near future. Even if the U.S. somehow pays back its debts (hopefully not going to happen), the "delayed spending boost" goes to foreigners, not us. It's beyond belief that someone thinks taking on more debt is a good idea, unless they are expecting that we will default anyway.
The author also failed to discuss our per capita debt, which is something like 4 times higher today in terms of real (inflation-adjusted) dollars than it was in the late 1940's.
http://en.wikipedia.org/wiki/Roman_Empire
http://www.iep.utm.edu/reductio/
Reductio is absolutely right—on all counts.
Nothing intelligent to add to his excellent comment—he covered it all.
GL
Someone else caught Krugman cooking the books when he argued that Iceland proved his case by outperforming austerity minded Latvia. There he just selected differing timelines in his charts and ignored the fact the Iceland still has a heap big problem with Britain and the Netherlands in regards to its bank defaults as well as 'Viking' solidarity with its rich big brother Norway.
Krugman is really just a partisan hack horrified his boy Obama has lept the shark and will not be renewed for a new season.
<Rams Sac> But, didn't Wikio using the circlejerk algrorithm say he is the best? Who are you to question this ZH? </Rams Sac>
I want some of the hooch the Scandinavians are swilling - a fucking Nobel Prize hahahahahahahahha...
Double post.
Dr. Robert Stadler lives.
http://solohq.org/Articles/Younkins/The_Robert_Stadler_Story_The_Moral_F...
It's been fun watching Krugman swim in his own feces- every editorial comes off more absurd and transparent.. Why a Nobel prize winner can't do 3rd grade math or study history is beyond me.
The crucial parts are that world war 2:
- forced austerity and lowered private debt
- destroyed the planet except for one exporter- us
- saved the political class of the wrath of citizen tax revolt
- killed many unemployed and created a new inflation cycle
- employed the unemployed and sent them to doom.
- basically took the minds of America off public and bank corruption.
The big part here is created false demand for industry in a time of private credit revulsion.
Depressions stop when debt is eliminated by jubilee or default. Going to war and stealing industry and their gold supply( hello Switzerland!) is a great way to increase your money supply when the shit hits the fan
New Schiff video blog w/ response to Krugman... 'nuff said.
http://www.youtube.com/watch?v=6yfqzwwNGEg
http://www.youtube.com/watch?v=zPHUtFxaJ8M
I'm not sure why there is a discrepancy between the NBER and BEA data. Yours are adjusted for inflation, but even the BEA table without adjusting for inflation has the same discrepancy.
I had never heard this argurment before; I always thought it was obvious that goverment spending during the war brought to U.S. out of recession so I was looking for the export data that the author asserts is the real reason.
However, with your data I also found the government spending data for the time period.
Year Exports Govt. (real billions 2005$)
1939 33.3 238.6
1940 37.9 245.3
1941 38.8 407.7
1942 25.6 959.4
1943 21.6 1427.2
1944 23.2 1606.1
1945 32.5 1402.2
1946 70.3 482.1
1947 80.1 409.5
1948 63.1 439.4
1949 62.5 491.9
1950 54.7 492.4
Let's see...which had a bigger affect on U.S. demand. Oh, it's still obvious the goverment spending increase effect dwarfs the export increase effect, so much so it's almost a joke to bring up the export effect.
I thought it was an interesting theory, but based on this, the common understanding that Krugman repeats is the most accurate, although exports (BEA data) had a small effect.
Was it really necessary for you to copy your earlier post on this thread? The conclusions were incorrect both times.
You still seem to have a hard time calculating percentages. It's not really that complicated--change divided by initial value.
I thing you ar the one struggling with percentages, not for me. Let's calculate them for you:
Exports Gov't Spending
1945 $32.5 +40.1% $1,402.2 -12.7%
1946 70.3 +116.3% 482.1 -65.6%
1947 80.1 +13.9% 409.5 -15.1%
1948 63.1 -21.2% 439.4 +7.3%
1949 62.5 -1.0% 491.9 +11.9%
1950 54.7 -12.5% 492.4 +0.1%
CAGR (45-50) +15.4% - -17.9%
Again, export growth (and personal consumption + private investment) is what drove the POST-WAR (i.e after 1945) recovery.
Astute,
I think we've finally narrowed down the problem.
Lira: If that were his only sin in the piece, then it might be excusable. But then, Krugman makes a truly despicable statement: “Deficit spending created an economic boom [in the post-War years]—and the boom laid the foundation for long-run prosperity.”
Lira tried to make it about the post war years, inserting brackets in Krugman's quote, when the real issue is what caused the end of the depression after 1938. It's obvious that government spending wasn't the big driver after the war because it stopped.
Slick construction of a straw man by Lira.
With the appropriate timeframe, it's still not just the percentage increase in both categories; it's the contribution of each to overall growth. As any astute investor knows, if you have just two investments, a $100 and a $10,000, and the first gains 100% ($100) and the second gains 10% ($1000), your overall return is 10.89% with the 100% gain on the small investment contributing 0.99% and the 10% gain on the large investment contributing 9.90%. In other words, the contribution depends on both the share and the percent gain.
Per my post above: The BEA data shows that government expenditures exceed the dollar amount of exports in every year from 1929-2009.
By your way of thinking, exports are irrelevant because governement expeditures have always been (and always will be) larger in the aggregate. In your world, government expenditures should represent 100% of GDP. Unfortunately, government expenditures (I laugh when people categorize it as an "investment") and its "contribution" to GDP growth must be funded through higher taxes and / or higher debt burdens in the future which must be paid by the private sector.
No, not at all. I'm just pointing out how contributions to GDP growth are calculated by analogy to an individual's portfolio appreciation; it's the same concept.
Government 100% of GDP...now your losing it. I'm happy keeping government under 15-20% (fed, state, local); they need enough for defense, roads, police, parks, food safety ...
First of all, to use government spending as an analogy to an individual's portfolio appreciation is laughable. Yes, it makes a larger contribution to GDP, but that contribution is simply an economic transfer from the private sector. Who do you think pays for this "miracle" contribution to GDP? Government expenditures are funded through taxes and debt which must be paid for (i.e. the economic transfer) from the private sector. Based on your theory, the contribution to GDP from government expenditures is "better" because it is larger than other private sector categories. Spending by the government must be paid for today through taxes or borrowings which increase both the interest and debt burden in the future. You are not getting a "return" when you spend nearly $1 trillion in stimulus for marginal increases in GDP. The end result is pushing future demand forward with a significantly larger debt burden in the future.
That's total nonsense. I'm not saying anything is better. I'm talking about how you measure contributions to growth. Same math applies to GDP or portfolio growth. Just trying to explain to you how the BEA calculates this table.
http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=2&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=1930&LastYear=1950&3Place=N&Update=Update&JavaBox=no
Oh really, taxes pay for government, who would have thought?
The end result is pushing future demand forward with a significantly larger debt burden in the future.
Not if the economy is operating at less than full capacity. You'll have to figure that part out for yourself...but my guess is you won't even try...you'd rather be stuck believing in your ideology, than risk confronting whether it is true or not.
Good luck.
Peace.
It's not rocket science how the BEA calculates GDP. Government expenditures are a larger contributor to GDP than exports since the BEA starting keeping the statistics. Your point was far more than discussing the calculation. Your central point was that exports is signficantly smaller than government expenditures implying that it is a less important contributor to growth than exports. Government expenditures soared in WW II because the government has a monopoly when it comes to the war business. Unemployment plummeted because 16.1 MM people instantly had jobs in the armed forces with millions more employed to support the war effort. War is the ultimate stimulus package. No argument from me about WW II contributing to the end of the Great Depression. Unfortunately, you missed my central point about Krugman's flawed thesis. The debt / deficits of WW II were a result of, but not the factor in ending the Great Depression. Again, WW II was ultimate stimulus program because it put millions of people back to work immediately. Deficits used to finance the current stimulus programs does no such thing other then leave us with a massive amount of new debt.
Not if the economy is operating at less than full capacity. You'll have to figure that part out for yourself...but my guess is you won't even try...you'd rather be stuck believing in your ideology, than risk confronting whether it is true or not.
So "clash for clunkers" and the new home buyers tax credit didn't push demand forward? I guess you don't bother to read the current economic data. That's why Krugman et al are pushing for additional stimulus. Facts mean nothing to you. I let you enjoy your discussions with your fellow ideologues at the Krugman / Keynesian Society.
I'm just sick to death of all of these people ~~ ROBERT RUBIN, LARRY SUMMERS, CLINTON, BERNANKE, GREENSPAN ~~ BLAH ! They've done enough damage to last the next 50 years. I'm so sick or ROBERT RUBIN I want to puke.
Are all these guys jewish, besides Clinton who works for Israel?
Are all these guys jewish, besides Clinton who works for Israel?
deleted
global CRISIS - activate the K signal
I wonder if he carries a wallet picture of Keynes. Seriously, Krugmanmay drive the streets at night breaking windows to stimulate the economy.
2006.. making sense: http://www.youtube.com/watch?v=qo4ExWEAl_k
Stop Making Sense : http://www.youtube.com/watch?v=REJ2qdZ_LRU
I like to read contrarian points of view and this site used to be great for that, but this site has officially become unreadable with its bashing and disrespecting culture.
Have fun Tea baggers.
'Burn the witch!'
buh-bye.
Why do I ....
http://www.youtube.com/watch?v=cqwmDNPegnM
http://www.youtube.com/watch?v=RPFUjvgqejg
DEBT HEAD
http://williambanzai7.blogspot.com/2010/09/debt-head.html
It appears we now hate Summers, Geithner, Rubin, Bernanke as much as we hated Cheney and the Neoconmen 2 years ago
They are all part of the same disease, BillyBanzai.
GL
Amen brother
Gonzalo is right on the money!
And Gonzalo, to put you out of your misery, here's the annual contributions to GDP growth from 1937 to 1950.
http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=2&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=1937&LastYear=1950&3Place=N&Update=Update&JavaBox=no
The timing of the recovery shows that government spending was the dominant effect (although the consumer and investment got things going in 1939 and 1940). Your theory of an increase in exports comes in a distant 4th (a joke really) only having an effect in 1946.
Sorry, the facts are so inconvenient for your theory. Having access to a keyboard doesn't substitute for using your brain and looking at the data.
Tyler, why do you post such crap...somebody shooting off their mouth without any data to back it up. ZH is at its best when it relies on data, such as all your Bloomberg screen grabs.
Gonzalo calls Krugman an imbecile for his sloppy calculating of percentages. The data show that Krugman's conclusion is approximately correct, and that the conclusion of Gonzalo's analysis is a total joke; the data don't even come close to supporting Gonzo's conclusion. Who is more imbecilic? Gonzalo, it was tough but you topped even Krugman.
Aphorism #3.
GL
In other words, I'm right. You have no data to back up your conclusions. Sloppy analysis, sloppy thinking, but you write well though. Convincing to those that want to be convinced, but not to those seeking to understand how the world works.
Unlike you. You are not sloppy, you are precise and deliberate in the numbers you choose - a bullshit artist like Krugman.
Let me guess - you're going to copy and paste, yet again, you're selected data to 1950.
You can find the data beyond 1950 by selecting a latter year on the BEA table I linked to. I hope that isn't too hard for you.
And after everyone debunks you, you keep copying and pasting the same data and stupid comments you made previously. Are you a fucking moron?
Let me guess - you're going to copy and paste again.
Aphorism #3.
GL
I call low blow. I see Krugman's line of thinking as follows: from the onset of the US in the war in 1941 to its conclusion the USA's debt increased to what would be $30T today. What he does not explain or cite is the USA's "lend lease program" to all the allied nations; nor does he cite the spoils of war that accrued to the USA being the sole industrial producer with a net surplus.
I call BS on Krugman for suggesting the USA spend like there was a war because in fact there is no world war, there is no similar global urgency and nobody in their right minds ccan imagine spending that much money building green infrastructure.
I see Krugman's point, it still sucks.
Gonzalo...who the heck is this moron Gonzalo?...
a writer and filmmaker who says he knows more
than a Nobel Prize PHD Economicst from Princeton.
OK GONZO...sure
Republi-Ken wrote:
on Tue, 09/07/2010 - 22:16
Gonzalo...who the heck is this moron Gonzalo?...
"There’s a saying in Spanish: Por la boca muere el pez. “The fish dies by the mouth”.
"Submitted by the inimitable Gonzalo Lira"
As an addendum to the keynsian chicanery read what these buffons were calling for after the troops returned from combat to battle "the depression of 1946".
https://www.cato.org/pubs/policy_report/v32n3/cp32n3-1.html
I rather enjoy how the Krugmanites are coming out of the woodwork—now that it's after dark and therefore safe for them to come out. I rather enjoy watching them troll ZH as well as my blog, defending the object of their obsessive fluffery. It's that Krugman needs his fluffers, and his fluffers are only too happy to oblige.
I'm a Live-and-let-live kind of guy. So I say, Let the Krugmanite Fluffers cum out! Let them run free, these Children of the Night! Let Krugman's Fluffers bask in the warm wet milky effluence of his munificence! Let them wallow in his spend-thrift, MMT ways! Let them cum out and play . . . with one another! And with Krugman too! Because though K. runs around with his mask of anonymity, I've spied him a time or two, running about in these comment sections.
Be free, Krugman! Be free! Let loose your warm wet frothy ideas into the waiting receptacles of your acolytes! They want it! They want it! They NEED it!
After all—they're fluffers: YOUR fluffers. Krugman's Fluffers. After all, it's their JOB.
GL
Let slip the dogs of war. :-)
Gonzo,
Excuse me. I thought it might be possible to enter in to a serious discussion based on the facts. But now I no that you're not serious -- no response to the facts, just fluff for your fanboys.
Sorry bud, but even if you thesis is correct, it hardy negates his thesis. I wouldn't waste my time either if I was him. If you think that you sated position contradicts his then rational discussion isn't possible.
Awwww.
Poor little Duck - no one wants to play using his facts. Now he wants to pick up his facts and run home to mama.
What I think is funny is my mom wanted a nobel prize more than anything and always wanted to be a great teacher. If she were here to see what it has become I think she would rather have the formula for duct tape and knowledge of how to make a gag ball.
Mr Krugman is just another Corporate slag. He says what the NYT, Time and all the other consent manufacturing press/politicians want said. He is no different than a Bill O'Riley or Limbaugh in terms of world view and his pay check. He's a limp wristed hired gun.
What should be on everyone's minds is the next $200 billion tax give-a-away thanks to Obama & Company. Tax breaks for cap-ex - goods made in China. That is not going to bring back US employment. U6 hovers around 20% - if you even believe anything coming out of NY/DC.
What this crank or the other uncivilized bank shrivs think no longer has any impact on your daily live. You might as well live in Chiapas, Mexico or Planet 10.
Krugman doesn't ride the bus.
What else could laborers expect when they allow criminals to own the printing presses?
aaa
I wonder whether Mr. Krugman could be campaigning to be Geithner's replacement at Treasury. With the recovery dragging and the administration's poll numbers sinking, perhaps the president might be looking for a new face with new ideas. The president may also be starting to get some pointed questions about how he could put a man who (by his own admission) is unable to properly file his income taxes in charge of the nation's economic recovery. And Mr. Krugman seems to have plenty of new ideas.
In addition to suggesting that Obama needs to double down on his stimulus program, Mr. Krugman also seems to feel that a dose of inflation might be just the thing that is needed to perk up the economy. Some other economists (like Kenneth Rogoff) seem to be suggesting the same thing. Long-term treasury buyers beware...
Krugman's erudite mendacity is remarkably accessible. He is likely a fraud but he's more of an idiot than an imbecile.
As a progressive, I cringe whenever Krugman is held up as the leader of progressive economics. I imagine it's how a black person would feel if someone said Kanye West was the leader and intellectual light of African Americans.
Krugman talks all over the place, uses inconsistent logic, other than always wanting a deficit. There are so many more options, see Steven Keen, Michael Hudson, at least they make consistent sense even if you disagree, Krugman seems a very sloppy thinker.
Progressive economics don't make much sense anyways. There is only one type of economics and it doesn't involve a central bank, a famously gay economist, or government intervention.
First Obama tried to be Lincoln. Lincoln lost his Senate bid.
Then he tried to be FDR. So far he is succeeding. It remains to be seen if he can keep the country in a huge funk for the next six years and then somehow blame it on his predecessor.
Krugman on the other hand is a special case, mentally. It's interesting that he hung out with Bernanke and was surprised to discover that Ben was, shocker, a Republican!!! of all things.
"So far he is succeeding." I hated reading that. That's like saying the Space Shuttle Challenger was successful at blowing up.
Bernanke is a republican in the same context that a republican believes in small government. As Bush Senior said "Nope, ain't gonna happen."
Further Krugman *cough* a Nobel Prize Winner *cough* deserves to be shot in the head. His asinine ideas and remarks are read and "understood" by the pseudo intellectuals/progressives/democrats/many republicans/statists/neocons and the list goes on.
These crazy ideas will only end in tears.
Hey Paul,
You're a mathematician.
What's 2+2 = ?
[Hint: It can only be greater than 3 and less than 6]
(F*cktard imbecile)^inf indeed!
War being good for the economy is the ultimate Broken Window Fallacy.
We emerged a super power because we became the sole factory/exporter on the planet for like 20-30 years. We started going into heavy debt under Reagan. Clinton didn't stop it. Those surpluses were bullshit, we were still in the hole for Social Security and Medicare.
Yes, WII benefited the US tremendouly, at the expense of the death and suffering and destruction in the rest of the world.
The US made huge pile of dough from fixing all the windows broken by Hitler and Japan.
Even without accounting for human suffering, the economic gain of the world as a whole for any war is a big NEGATIVE.
I know what that a55h0le is saying, that WII is a special circumstance where the US ran up huge debt and paid it off. And by retarded analogy, now is a special circumstance where the US should run up huge debt again because he claims we can again pay it off.
Well, unless the economies of the world get completely destroyed again except for that of the US, we will not be able to pay it off. First, we don't make sh*t anymore. Second, the rest of the world doesn't have to buy anything from us unless it's a good deal.
So is he praying for a world war, or advocating starting one? Perhaps instigating some kid to throw some bricks? Because that's the only way to make his logic work.
This a55h0le is dangerous.
Sorry for the colorful language. I have no other way to express my disdain.
I like Krugman. Spending is just a word, but the details of how and exactly where those expenditures are allocated makes all the difference in the world. Many voices decrying Krugman here had no issue with the government spending that bailedout the TBTF oligarchs. 14 Trillion to the predatorclass, .05% of the population, and the imbeciles and den of vipers and thieves who are responsible for conjuring and woefully mismanaging this horrorshow - and a less than a trillion to the other 99.5% of the population.
The entire global financial system as it stands today is a complex PONZI scheme. It can only continue is there are more imbeciles buying into the PONZI scheme. Once the critical threshold is met, and that is basically the September of 2008, the entire house of cards is doomed to collapse. And all the kings horses, and all the kings men, cannot put this PONZI scheme back together again. Central Banks globally and the Fed has poured imponderable amounts of cash into the offshore accounts of the predatorclass with the dim hope that something majikal will happen to right the horrible wrongs of 30 years of PONZI finance, entire economies based on and rooted in debt. It's a joke!
"... buy gold, buy silver, buy canned goods, plant a garden, and hunker the hell down, ",
And might I add guns and ammo. Guns and ammo are the primary investment now, because when this pernicious and toxic system truly crashes - and it will - you will need guns and ammo to defend against the waves of creatures lurking in the shadows, and haunting the streets that will take your gold, silver, canned goods, and produce, and slaughter you and your family.
There is no way this level of abuse and criminality can continue uncontested. There will be a reckoning and a balancing, and there will be blood.
"I like Krugman."
Noted...
"Spending is just a word, but the details of how and exactly where those expenditures are allocated makes all the difference in the world."
Spending is not needed. Saving and investment are needed, neither of which are spending.
" Many voices decrying Krugman here had no issue with the government spending that bailedout the TBTF oligarchs. "
Wrong. I've been lurking here for over two years. There were oddballs, but they are in large part not a majority nor many.
"and the imbeciles and den of vipers and thieves who are responsible for conjuring and woefully mismanaging this horrorshow"
I like to call him the Fed. You can blame the Fed, the banks were just acting in their self interests. Similar effec tplays out with poor people who win the lotto they waste the money in the thrill of spending.
You are incorrect.
And no amount of government spending is going to make "all the difference in the world", other than making things worse.
Tony we're not in Baseline Scenario anymore :-)
he writes a blog on NYtimes.com
I often dispute his conclusions and data.
my general thesis is that stimulation without the proper market structures is wasted and that he never talks market structure.
Stimulus doesn't work (in the long run) for the fundamental fact that it puts us further into debt by nature of our currency.
It's like trying to jack it 10 times a day. The more often you do it the smaller the fun and the more work has to go into it.
The law of diminishing returns applies very well to the stimulus.
As for market structure? How? Should we drop piles of money from helicopters? Rather than lend banks more money? Should we run deficits by dropping money out of helicopters? The idea is invalidated because the government nor the fed isn't a market structure.
I like Krugman. Spending is just a word, but the details of how and exactly where those expenditures are allocated makes all the difference in the world. Many voices decrying Krugman here had no issue with the government spending that bailedout the TBTF oligarchs. 14 Trillion to the predatorclass to perpetuate a doomed PONZI scheme - .05% of the population, and the imbeciles and den of vipers and thieves who are responsible for conjuring and woefully mismanaging this horrorshow - and a less than a trillion to the other 99.5% of the population.
The entire global financial system as it stands today is a complex PONZI scheme, a criminal enterprise. It can only continue if there are more imbeciles buying into the PONZI scheme, and if everyone ignores or cloaks the criminals involved in the PONZI scheme. Once the critical threshold is met, and that was basically the September of 2008, the entire house of cards is doomed to collapse. And all the kings horses, and all the kings men, cannot put this PONZI scheme back together again. Ashes ashes, all fall down.
Central Banks globally and the Fed has poured imponderable amounts of cash into the offshore accounts of the predatorclass and the finance oligarchs with the dim hope that something majikal will happen to right the horrible wrongs of 30 years of PONZI finance, entire economies based on and rooted in debt, and unchecked predatorclass abuse and criminality.. It's a joke!
"... buy gold, buy silver, buy canned goods, plant a garden, and hunker the hell down, ",
And might I add guns and ammo. Guns and ammo are the primary investment now, because when this pernicious and toxic system truly crashes - and it will - you will need guns and ammo to defend against the waves of creatures lurking in the shadows, and haunting the streets that will take your gold, silver, canned goods, and produce, and slaughter you and your family.
There is no way this level of abuse and criminality can continue uncontested. There will be a reckoning and a balancing, and there will be blood.
A Highbrow. Educated beyond his intelligence or deliberate in his misinformation?
Krugman is an idiot
Broken Window Fallacy
Read it Krudman you tard.
Then read some Murray Rothbard.
Ah Kruggy, He seems to forget that aiding our recovery in TGD 1.0 was the destruction of the competiton.
This guy is a boner. A complete fool. He won his "prize" geography economics which has very little if anything to do with what is happening today. I'd fuck this guy in the ass like a bitch and toss him over a bridge when I'm done with him.
Look at the dudes belly! He stimulates it more than I stimulate mine all day sitting on the couch eating cheesy puffs.
Funny that. There is a similar saying in Russian - Ryba gniyot s golovy. "The fish rots from the head".
Could someone please sniff Krugman's head and let us all know the results?
In my country we also have a saying: "Shit comes out of the asshole"
The imbecile/fraud dichotomy does not do justice to Krugman's skilled defence of the status quo that put him in his rarefied heights.
There would be plenty of reasons to believe Krugman a doctrinaire imbecile if the implication of his hysterical-keynesianism was not the maintenance and prosperity of the international bankocracy.
Having said that, I vote for fraud.
The US puts out a $30 Tn stimulus ...
The $ is devalued to zip.
The US essentially declares WWII ... on Itself
Tyler Durden sitting in a chair with a pistol in his mouth, pulls the trigger!
Krugfraud is both a fraud and imbecile. This article was perfect, we were the king after WWII and now we are a debt laden nation with a significant amount of our industrial might GONE. Unless we nuke the rest of the world (sic), our Ponzi economy is destined for some really bad times and the idiot (Krugman) wants to make the problem worse. If interest rates tick up, most of the tax revenues will be needed to simply pay the interest on the debt!
The FED MUST create or at least try to create inflation just to make the debt manageable. Can they pull it off without sparking hyperinflation or completely destroying the currency? My bet is NO!
@ GL: Excellent commentary! The operative sentence here is this:
As Vedran Vuk said back in April 2010, "I'm sure that the darkest corners of Dante's imagination are reserved for folks like Krugman who spread deceit whele being fully aware of the truth."
Krugman habitually manipulates data and the real facts, in order to make his point. This deliberate distortion, coupled with the frequent use of the phrase "I-told-you-so" is classic "KrugmanSpeak."
For a very interesting read on more Krugman Idiocy (or dishonesty... or both) go here to Mish's Blog:
http://globaleconomicanalysis.blogspot.com/2010/09/new-job-opportunity-spitting-at-moon.html
Nice article thanks.
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In additiona to USA; Canada, Australia, New Zealand, and South Africa all retained strong, undamaged economies during WWII. Also, all South and Central America were undamaged (but still weak economies)