Ridiculed By Americans Everywhere, Krugman Now Threatens, Gives Unsolicited Advice To Germany, Pisses Entire Nation Off

Tyler Durden's picture

These days it's hard being a religious fanatic, also known as a Keynesian. It is even harder when you are Paul Krugman (sadly, the cornerstone of NYT's entire paywall strategy), and everyone in your own country is already sick and tired of, and openly ignores your constant appeals to drown the world in new and record amounts of debt, thus ignoring your appeals with impunity. So what do you do when nobody takes you seriously for thousands of miles around? Why you go even further - to the core of Europe in fact... where you proceed to threaten, badger, insult and give your unsolicited advice to anyone that listens. That "unlucky soul" in this case happens to be Germany daily Handeslbatt, which ran an interview with the "economist" in which Krugman stick not a foot, but an entire SS-20 nuclear warhead armed ICBM, in his mouth. And since Krugman is unaware, preaching the benefits of record deficit spending in Germany, ever since that little experiment in hyperinflation known as the Weimar Republic, tends to generate adverse reactions. Which is precisely what happened in this case. Luckily, now Krugman is a persona non grata in at least one country. Unfortunately, it is not the one in which his trite platitudes and melancholic remembrances of the golden days of Greenspan's credit bubble are still published on a daily basis.

As the WSJ reports:

Princeton University Prof. Krugman caused a stir in Germany this week with a stinging critique of Bundesbank President Axel Weber, who is considered a frontrunner to succeed Jean-Claude Trichet as head of the European Central Bank when Trichet’s term expires in October 2011. “If you are looking for someone who is aiming for zero inflation while unemployment is rising to 13%, then Weber is definitely the right guy,” Krugman said in an interview published in German with the business daily Handelsblatt.

The verbal lashings of the Bundesbank head will continue until insanity returns:

“Weber is concerned about inflation, when there is no inflation. I would rather see an ECB President who gives more weight to deflation risks and the risk of a protracted stagnation,” Krugman said, adding that he doesn’t know Weber personally. Before joining the Bundesbank Weber was an economics professor in Germany and fairly well known in U.S. academic circles.

Krugman also criticized Weber’s opposition to the ECB’s purchase of the government bonds of vulnerable countries like Greece and Portugal. The Bundesbank chief touched off controversy in Europe last month when he publicly declared his opposition to buying bonds, breaking a longstanding ECB taboo against airing disagreements in public.

Yet trust a Keynesian to hope to achieve one thing, yet in reality obtain just an opposite result:

rugman seems only to have bolstered Weber’s clout among Germans, who wear their anti-inflation obsession as a badge of honor. Germans often say that whereas the Great Depression dominates U.S. economic thinking, Germany’s experience with hyperinflation in the 1920s is its defining economic period of the 20th century, and one that must be avoided at all costs, even if it means slower economic growth.

Dennis Snowden, who heads the Kiel Institute for the World Economy, defended Weber, telling Handelsblatt: “He has all it takes to be a fantastic president. He has great sense of responsibility, a strong knowledge base and he knows how important it is to keep inflation expectations stable.”

And when unsolicited advice is rightfully ignored, what next but to jump the shark and threaten your way in having someone to listen to your blabbering.

Krugman didn’t stop with Weber. He has taken on Germany’s plans to rein in its budget deficit, which is already considerably smaller than the U.S.’s as a share of GDP. “German austerity will worsen the crisis in the euro area, making it that much harder for Spain and other troubled economies to recover,” he wrote in his New York Times column.

German politicians, he wrote, “seem determined to prove their strength by imposing suffering — and politicians around the world are following their lead.”

Krugman also told Handelsblatt he wouldn’t rule out sanctions against Germany if it continued to rely on its export-driven model. “If the euro falls to parity with the dollar, the Europeans are going to be surprised by the demands that will come out of the U.S. Congress, and I would support that,” he said.

Good work Krugman - you have just gained one more enemy to not just the Fed's monetary lunacy, but the president fiscal imprudence.

That fiscal and economic policy critique probably won’t gain any more traction in Germany than his monetary policy one. Germans see their government finances and trade competitiveness as an example to be followed by Greece, Portugal and other troubled countries in Europe. And they clearly don’t see the U.S. model as one worth chasing.

Luckily, in Germany people actually have brains and are able to respond to this kind of ridiculous sophistry:

Wolfgang Franz, who heads the German government’s economic advisory panel known as the Wise Men, tore into Krugman — and the US — in an op-ed in the German business daily Wednesday, titled “How about some facts, Mr. Krugman?”

“Where did the financial crisis begin? Which central bank conducted monetary policy that was too loose? Which country went down the wrong path of social policy by encouraging low income households to take on mortgage loans that they can never pay back? Who in the year 2000 weakened regulations limiting investment bank leverage ratios, let Lehman Brothers collapse in 2008 and thereby tipped world financial markets into chaos?” he wrote.

We rarely touch upon the illustrious persona of Mr. Krugman as he tends to do a good job of involuntary self-immolation without our help. That said, we completely agree with the conclusion of the WSJ's Brian Blackstone:

So if Krugman really wants to keep Weber from the ECB presidency, or at least cool some of his support in Germany, he might want to consider damning the Bundesbank chief with praise instead.

Something tells us the Germans are done with P.K. And since we, unfortunately, are not, perhaps he should adopt the same reverse psychology in the US - just like a Goldman downgrade of something means buy buy buy, should Krugman become rational for a change and espouse a prudent approach of deficit cuts, every normal thinker in the US will be immediately forced to burn their copy of The Road To Serfdom.

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spekulatn's picture

We rarely touch upon the illustrious persona of Mr. Krugman as he tends to do a good job of involuntary self-immolation without our help.


Awesome Bitchez

P Rankmug's picture

Tell me about it.  I have to live with the buffoon being an anagram of my ZeroHedge persona.

bigdumbnugly's picture

Krugman was pretty good and made sense playing alongside Tony Randall in The Odd Couple, but seems to have jumped the shark thereafter.

ISEEIT's picture

Krug the Keneysian got a No-bell. Enough said if you care about the battle between reality VS fiction. The political left as impowered today represents a lie ( actually a house of cards built upon a deck of lies). Little Paul blows the trumpet of a false faith.

That's why he and the Idiot (name the idiot, might be a great game?) share in common the scarlet letter of a "Nobel Prize".

Name the society that has ever survived a false faith attack?

Commander Cody's picture

We are governed and advised by the criminally insane.  Apparently, the Germans have detected and eliminated the tainted Kool-Aid in their drinking water.

knukles's picture

Dude, the Germans are just so On!
No to Krugman
Yes to Hasslehoff

Discerning Good Taste.

Oracle of Kypseli's picture

Krugman may be a good theorist. But has no common sense.

Thus! he is a useless buffoon. (useful idiot?) 

Eternal Student's picture

Which raises an interesting question. If he's a true Keynesian, does he use his Credit Card to pay off his mortgage?

Interested Creditors want to know.

Ragnar D's picture

As a true Keynesian, he uses yours.


(Well to be technical, he uses a combination of University funding, which comes out of your pocket, and the NYT's company card, which will also be paid for by you once they rahm through the net "neutrality" / Drudge tax / dinosaur media bailout bill.)

StychoKiller's picture

Don't forget about "borrowing" from pension funds in order to pay the pension fund(s)!  Is that Alice over there "trippin'"?!

I need more asshats's picture

No mortgage to pay. Andy gave him use of Abe's penthouse on Central Park West when he won the Nobel.

Here's how Andy Rosethnal, editorial page editor of The Times announced the news to his staff:

To the staff: I'm sure by now you've all heard the wonderful news, but it bears repeating: Paul Krugman has been awarded the Nobel Prize for Economics for his work on international trade and economics. This work, of course, is outside the twice-a-week column that he writes for our Op-Ed page. But to say that we're proud of Paul and his association with The Times would be an amazing understatement.

Paul writes one of our best read and most popular columns, in part because of the power of his ideas and the force of the positions he takes, but also because he does something that few scientists of his caliber have ever achieved. He takes enormously important and incredibly complicated subjects and translates them in ways that are not only understandable to everyone, but that also make them relevant to everyone's actual lives.

There is an ancient tradition of editors taking credit for awards given to anyone on their staff, at any time, but I'll confine myself to saying how delighted I am to be a colleague of Paul Krugman's.
--Andy Rosenthal

Copyright 2008 The New York Observer

Sounds like The Observer was celebrating a little too.

drwells's picture

Pathetic. A wonder Hayek doesn't crawl out of his grave, or urn, or whatever the hell his mortal remains are in, and throw his Nobel back into the Committee's collective face.

Turtle49's picture

The million dollars from the Nobel Prize is tax free.  How about the fair rental value of the live here for free penthouse?  Was that reported as additional income?

PS  In case you could not guess -- I do not like Krugman and the New York Times is living on its reputation -- and the money from the fellow in Mexico.  Carlos Slim?


Circumspice's picture

He takes enormously important and incredibly complicated subjects and translates them in ways that are not only understandable to everyone

And his views are always so nuanced!

  1. c + i + g = y
  2. Increase g
monmick's picture

The beauty of giving such moronic advice at this point in time is that, when the global economy eventually collapses under its own weight, you can credibly say to all those who ignored you: "I told you so."

Japhy Ryder's picture

The thing that bothers me is that Krugman is getting a pay check (a big paycheck no doubt).  He does nothing except spout words.

Mowing someones lawn for 20 dollars over the weekend at least contributes to society in a small way.  IOW -"get a job Krugman !"

Ragnar D's picture

History has already proven Krugman and his control-freak ilk wrong dozens of times.  It doesn't matter, the media will continue to give him attention to make excuses because it fits their agenda.

Hoover overspent and accelerated a huge credit bubble that popped.  FDR stepped in with a bunch of populist rhetoric, and expanded government as quickly as he could while flushing as much money down the toilet as quickly we as could.

In 1930 the stock market recovered, everything was all better, and green shoots were everywhere.  And then the real crash happened, and we had a dozen years of Great Depression.


Krugman's version is that FDR somehow didn't spend enough money "stimulating" do-nothingness.  He's also saying the TRILLIONS we've spent aren't enough, and when we fail to reflate the credit bubble every government-cheerleading media outlet will echo him.

Just look at the way they talk about European austerity:  it's so "severe", it'll cut growth and the salaries of "workers".  In reality they haven't cut anything, they're just slightly slowing the rate of increase while still piling on debt.  There's nothing "severe" about it, the gov't waste was never "growth", and the only ones who might see pay cuts are useless gov't unions--actual workers aren't having their salaries cut, and won't have to pay for as much featherbedding.

bob_dabolina's picture

At this point I think all questions/comments/concerns/advice by any individual with any vested interest in a United States government official should be ignored with reckless abandon.

The entire establishment is compromised by the most ignorant and corrupt individuals in the history of the United States Of America.

No Credibility. No Trust. No Confindence.


Apostate's picture

You skipped quoting the best lede in recent WSJ history:

David Hasselhoff’s status as Germany’s favorite American appears safe, from Paul Krugman at least.

Kudos to Brian Blackstone.

Can someone photoshop Krugman's head onto Hasselhoff's bod?

Will Krugman join the dissident generals in exile to plot his revenge?

The 22nd Prime's picture

not a foot, but an entire SS-20 nuclear warhead armed ICBM, in his mouth.


That one busted my gut. Thanks.

New_Meat's picture

but we're all within 3 CEP of gz.  this idiot - Ned

Shameful's picture

Ah the mighty Paul Krugman.  Am I the only one who wants to look at his personal finances?  I would love to see if he follows his prescription of "SPEND! BORROW!SPEND! BORROW! "

unwashedmass's picture


you know..... as much as i hate to give Paulie Boy any credit....

the plan....you know, the money printing MIGHT have had a chance if....

it had actually been distributed to the peasantry.

as we know, all the cash that was printed and is being printed has literally been laundered thru the major banks and stuffed into the accounts of the banking elite.

Now why Paulie seems to be unaware of this, who knows? And if he is aware, why would he believe that the Europeans would handle the situation differently?

Whatever.... I do hope that Jamie Dimon -- at the very least -- has the good manners to write Paulie a thank you on his way out the door to wherever he's secreted his share of the billions.

New_Meat's picture

Not all laundered, the remaining stimulus hanging around for this summer's "final push" of public works spending.  Something like 2/3 of 787 BB plus the extra arm-twisting extra (I forget, drove over 1T).

Comic relief is going to become scarce, we should keep the fool around and watch him go mad.

- Ned

DosZap's picture


You think we could get back the Stim $ that went to ACORN, and Petrobras, and ???????

Bottom  line, THEY "NEVER" want/ed the economy to get better.

( I do not know what it takes for people to get this thru their heads,we are not dealing with regular Politicians here!).

Remember, Rhambo!!!!!!!!!.......

"Never let a Crisis go to Waste".

So, in addition to the one's just happening, they decided to HELP create some more..............kind of like a Short Order Cook.


Fred Hayek's picture

That would have meant Krugman going along with some of the republicans' suggestion to that effect.  Not. Going. To. Happen.

Paul Krugman, inc. is in the status industry.  Agreeing with republicans when they want to give John and Jane Doe their own money back is NOT the way you express your sophistication and thereby status in the circles in which Krugman travels.

TooBearish's picture

Comon Ty - give the guy a break - he's just vying for his rightful position in the New World Order....

Careless Whisper's picture

that's right. i doubt he went rogue and gave that interview. he was on a mission.

downwiththebanks's picture

Removed from reality as Krugman is, it's more comedic to think the Austrian school prescription of "Austerity uber alles" will solve the capitalist crisis.

We're long past the business cycle here, gang.  And the Austrian school doesn't do well with that reality (or any other one, really).

Cutting people off of food stamps won't end the capitalist depression.  It will only kill them.

Apostate's picture

You're oversimplifying the Austrian position.

Austerity is what the administration favors. That's the Larry Summers / Jeff Sachs playbook, which is truly pernicious, criminal, and has provoked civil war, public health crises, and strife nearly everywhere that it's been implemented.

There ought to be no austerity. The debt should be defaulted on, followed by a gentle de-socialization (not privatization) of the economy, guided by the homesteading principle.

Classical liberals have had zero influence in public policy for over 100 years now. 

AnAnonymous's picture

The debt should be defaulted on.

In other words, screwing people all over the world who sold their commodities against debt.

Better for you to say "we should push austerity on others so we could keep enjoying our life"

Just like the other economists, Austrians advising this kind of path are clowns. Because there is a physical limit to this scheme.



fajensen's picture

In other words, screwing people all over the world who sold their commodities against debt.

Well, Yes - It is better to screw them Now, and they learn not to trust foreigners in the future, while they still have ressources to trade, than later when all the ressources and all the land has been exchanged for debt, leaving them with nothing.

Besides; screwing over islamofascist Saudi Arabia and communist dictatorship China? Why would that be a bad thing to do? Neither are exactly our friends!

Insert witty title's picture


Who are the people who sold their commodities against debt? They receive a cash payment. People sold their labor for cash but could've exchanged fiat paper money for gold? No one i know owns an iron ore mine.

Banks get fucked, brilliant. Hopefully the Fed gets torn down, again fucking brilliant.

China gets screwed, but thanks to the US printing press they have crammed 200 years of industrial development into 30 years and they get to keep their infrastructure. Not a bad deal and one i'm sure they are well aware of and anticipating


This is besides the point. The debt has already been defaulted because it can never be paid back. Ever. Fact.

What we are doing now is extend and pretend.

Don't blame libertarians for the law of unforeseen circumstances.

I just dont' understand where you are coming from with this comment. And i havn't seen any austrians advocating default, they just say its going to happen one way or the other.  

Bendromeda Strain's picture

Better for you to say "we should push austerity on others so we could keep enjoying our life".

When did you become dense? Default is the only option. What form it takes and when are the only variables in play. If you believe that extend and pretend has a whisper of a chance, then what are you doing here? A hyperinflationary event will punish "us" more - but "we" are not the Fed. "We" did not sit in at Jekyll Island. "We" did not sit in at Bretton Woods. "We" did not advise Nixon in '71.

Besides - even if you fancy yourself prepared for an HI event, it could still kill you prematurely. It is the deadliest form of austerity.


PeterSchump's picture

If you think a default will enable the current American lifestyle to continue, you should ask for a refund of your education expenses.

fajensen's picture

If you think the current American lifestyle will continue unchanged under ANY scenario you should perhaps lay off the Afghan opium - or maybe start selling it; its a Job that cannot be easily outsourced after all (but a Mexican will Kill for that job)!

G. Marx's picture

Have no fear, TPTB have ignored the Austrians for decades, so I doubt they'll suddenly be struck by a wave of rationalism. I'd rather the Austrians be consulted after the collapse. Until then, please let us continued to be led by the statist (like Krugman) so when the collapse comes, there will be doubt as to where the blame lies.

Brett in Manhattan's picture

They'll just say the collapse would've been worse had we not implemented their policies.

drwells's picture

As Hayek said, it does no good to consult Austrians after the collapse when you ignored them during the bubble.

ColonelCooper's picture

You may well be correct, but the current effort will only insure to fatten them up a bit more before they starve to death. 

"Cutting people off of food stamps won't end the capitalist depression.  It will only kill them"

In some respects, the kicking the can down the road we're engaging in COULD be justified if TPTB were actually trying to prolong life for the terminally fucked.  We all know that is hardly their purpose. 

So, putting the shoe on the other foot, can one blame Germany for trying to act responsibly when the end result is the same? 

It's like playing that never ending game of Monopoly, when it just won't end.  The money's all worthless, and Germany is the first one who's sick enough of playing to get up and leave.

Insert witty title's picture

Firstly, I'm in no gang of yours. Secondly you clearly havn't read a scrap of Austrian economics. Why would they need to advocate austerity when they they dont advocate overspending in the first place?

Oh does your brain hurt? Too simple for you? Refute it if you can, I dare you.

Austerity is as keynesian as spending, but in  the theory govt saves first, spends later rather than the real world spend first, spend later, spend more, panic, cut spending, blame it on the market.

Or you're just a troll.

monximus's picture

I hope you don't think the government forcing people to buy crap they are not voluntarily willing to pay for = spending. Keynesians only pretend to be empiricists. They ignore all data that shows people to do not want to buy the stuff that government forces them to buy.

If I offer you $1 for all of your stuff and you decline that is irrefutable empirical data that you value all of your stuff more than $1. If you offer to sell your $100K house for $500K and there are no takers that is empirical data that the market values your house less than $500K. One of the biggest laughable con scandals was the notion that Keynesians are empiricists.

This is precisely why Keynesians demonstrably do not know what supply and demand is, do not know what trade is (hint: it consists of voluntary mutual exchange), do not know the difference between want and not want, do not know the difference between want more and want less, and therefore do not know what a market is, and thus do not know any basic economics whatsoever. And this is precisely because they ignore empirical data, precisely because they pretend the preferences of others are what they are demonstrably empirically not.

When a Keynesian references the term "spending" you know they are full of it.

Edit: Who is the best?!


Testicular Cancer's picture

Makes me think that he has a hidden agenda.

Mitchman's picture

Maybe he's angling to repalace Timmay.

arnoldsimage's picture

most hidden agendas can be boiled down to two vices. power and greed.

Hephasteus's picture

I hide my agenda so that people don't keeping asking it to do stuff with thier agenda. Hey want to go to lunch saturday. Hey what are you up to sunday.

Amish Hacker's picture

"The worst vice of the fanatic is his sincerity."

                                                   Oscar Wilde