Hi GW, It’s been so long! I’ve been skiing like a madman down here in Chile—but I did catch something you wrote, which I’d like to comment on, now that a blizzard has hit the slopes and I’m stuck inside with not much to do. You wrote a post yesterday, picked up by Zero Hedge and others, pointing out that Paul Krugman is advocating war as a fiscal stimulus solution. You pointed out that this position he holds is not only blatantly immoral, it is a position Krugman seems to have no problem openly pushing—your unspoken implication being that this is disastrous, considering how influential Krugman is in major policy circles. With regards to K. pushing for war as the ultimate Keynesian economic solution: I hate to say “I told you so”—but in this case—I told you so! (Cheers, mate.)
No, Mr. Krugman ... war is NOT good for the economy!
(In)famous artist Geoffrey Raymond has found a brilliant and 100% margin-generating scheme for boosting the prices of his trademarked annotated paintings: he opens them up for indirect commentary to the Zero Hedge community, which are then subsequently superimposed on to the painting itself. It worked for Jim Cramer, it worked for Ayn Rand, and now, it will work for Krugman (or rather the proud owner thereof). Black and White Krugman. Of course, in the process Raymond has made our prediction from two years ago that his work will be among the best IRRing cash allocation opportunities around, with recent clearing prices generating a triple digit investment CAGR for those who followed our January 2009 advice. So without further ado, here is Raymond's still unfinished Krugman, where the most eloquent ZH comments will take their rightful place. And P.S. no stimulus, fiscal or monetary, was wasted, or monetized, in the creation of this portrait.
150 Economists Sign Letter Against Increase Of US Debt; Spoiler Alert - Paul Krugman Is Not Among ThemSubmitted by Tyler Durden on 06/01/2011 08:29 -0500
Following last night's largely irrelevant and extremely theatrical vote for a clean debt ceiling hike, this morning 150 economists (of which those belonging to Ivy League institutions can be counted on one finger... the middle one) have signed a letter warning that "a debt limit increase without spending cuts and budget reform will destroy American jobs." Luckily, since a clean debt ceiling hike will have no impact on the BLS birth/death model, there is no reason to bother Paul Krugman with the fact that ever more of his peers think that those calling for endless fiscal largesse are now a part of the problem, and not the solution. From the letter: "An increase in the national debt limit that is not accompanied by significant spending cuts and budget reforms to address our government’s spending addiction will harm private- sector job creation in America. It is critical that any debt limit legislation enacted by Congress include spending cuts and reforms that are greater than the accompanying increase in debt authority being granted to the president. We will not succeed in balancing the federal budget and overcoming the challenges of our debt until we succeed in committing ourselves to government policies that allow our economy to grow. An increase in the national debt limit that is not accompanied by significant spending cuts and budget reforms would harm private-sector job growth and represent a tremendous setback in the effort to deal with our national debt." The full list of signatories is below. Among them are Nobel prize winner and Euro scourge Robert Mundell, John Taylor, Alan Meltzer, Douglas Holtz-Eakin, as well as former U.S. Secretary of State George P. Shultz, and many more. Suddenly the idea of buying US CDS does not seem so outlandish.
Everybody spins. Including Nobel economists.
Sean Corrigan's Take On The Fed's "Apres Moi Le Deluge" Policy Which Only "A Krugman" Can Approve OfSubmitted by Tyler Durden on 03/06/2011 15:32 -0500
The key running theme this weekend is "the flood", specifically that soon to be left in the wake of the Federal Reserve, which is now facing the last days of its ignoble existence. Previously, Egon von Greyerz shared his outlook on why the Pompadour-esque cliche will soon lead to a complete destruction of the dollar, and all other paper currencies. Now, it is the turn turn of Diapason's Sean Corrigan, who in his note from Thursday shares his view on the Fed's "reprehensible policy": "When the Chuck Prince Charleston suddenly stopped in 2008, the initial impact was just as dramatic on the market for machine tools, ceramic magnets, and silicon wafers as it was on lumber, carpets, and dishwashers and, so, the shock hit the surplus nations every bit as hard as the deficit ones as they all realised, to their horror, that they had all become nothing more than imprudent, Rueffian tailors. Since then, of course, the game has been replayed at an even more frantic pace, with governments largely taking pole position as the drivers of deficits, the media of monetization and, hence, the inflamers of inflation...By the time this last blunder works its way through the system, it will not just be the world's tinpot tyrants and biddable client kings who will pay the price for the Fed's reprehensible policy of 'apres moi le deluge', but it will be the ordinary man and woman who will have occasion to rue a programme so replete with intellectual arrogance, power-worship, and a wilful blindness to its awful, unintended consequences that only a Krugman could approve of it."
Forget high unemployment, hyperinflationary central bank policies, competitive devaluations, and all those useless demographic and political factors that go into the Shoe Thrower’s Index. In what can only be described as a moment of pure Keynesian genius, Paul Krugman concludes that the primary reason for the surge in food riots is…global warming. Perhaps he’s right. In order to put an end to these pesky riots and revolutions we should reduce our carbon footprint via extensive taxes on emissions (even though many scientists believe CO2 actually lags temperature change). Come to think of it, we should reduce all activities which are ‘positively correlated’ with a rising temperature anomaly, just to be on the safe side. And millions of public sector jobs would be created as new regulatory agencies would be needed, thus solving our structural unemployment issue.
A must read reply to that discredited shaman of voodoonomics, Paul Krugman, by one of the more notable proponents of Austrian theory, Mises Institute's Robert Murphy."As many readers already know, last week Paul Krugman linked to one of my Mises Daily articles explaining the importance of capital theory in any discussion of the business cycle. Although Krugman graciously described my fable about sushi-eating islanders as "the best exposition I've seen yet of the Austrian view that's sweeping the GOP," naturally he derided the approach as a "great leap backward" and a repudiation of 75 years of economic progress since the work of John Maynard Keynes. To bolster his rejection, Krugman listed several problems he saw with the Austrian understanding. In the present article I'll first summarize the Austrian (in the tradition of Ludwig von Mises) positions on capital theory, interest, and the business cycle. With that as a backdrop, I will then answer Krugman's specific objections."
One of the first, and arguably most stupid responses following Saturday's tragic shooting news, came from none other than self-appointed economic seer Paul Krugman (whose "government must spend more" ubiquitous retort to everything would have long-since bankrupted the world ten times over and left it with quadrillions of unrepayable debt), who in a post so disjointed and rambling, very unprofessionally decided against waiting for the dust to clear and facts to emerge, and instead proceeded to blame the republicans and the tea party for the tragic events that transpired: "We don’t have proof yet that this was political, but the odds are that it was." Today he proceeds to infuriate his few remaining readers with a blog post which one can say is even more intellectually challenged than its predecessor.
"You know that Republicans will yell about the evils of partisanship whenever anyone tries to make a connection between the rhetoric of Beck, Limbaugh, etc. and the violence I fear we’re going to see in the months and years ahead. But violent acts are what happen when you create a climate of hate. And it’s long past time for the GOP’s leaders to take a stand against the hate-mongers." Paul Krugman
It seems anywhere one looks there days, one reads a refutation of Paul Krugman's tortured "economist" logic. Lately, the NYTer has fallen into the crosshairs of many due to his contention that currently taxes, based on some chart which the Nobelist probably mislabeled again, are at 20th century lows. Of course, cherrypicking data that fits the theory is precisely what economists do. Which is why Krugman may be excused for missing out on a trend so subversive that we have seen it only mentioned by tax attorneys at Weil Gotshal: namely the gradual transition in the definition of taxable income from a "net" to a "gross" tax basis. As Weil's Kimberly Blanchard explains: "Many observers — most prominently Paul Krugman — write in terms of tax rates being at an all-time low and compare today’s rates favorably with those that existed early in the 20th century. Their implication is that tax burdens are lower today and, therefore, there must be room for tax hikes. But we know that taxes are not lower today. How could they possibly be when government revenues are so much larger, even as adjusted for inflation? The increasing size of the national deficit cannot explain the gap, which was already in evidence during the Clinton years. The average individual taxpayer is frustrated and confused because she hears that tax rates are down but somehow she believes (correctly) that her taxes keep going up. What has occurred is that the base has expanded dramatically, leading to taxes far higher than those paid by individuals historically." Expect to hear much more of this in the next two years.
Summers Goes M.A.D., As Krugman Contradicts Bernanke And Says Both Low And High Rates Are Good For EconomySubmitted by Tyler Durden on 12/08/2010 15:17 -0500
The person who according to many, if not all, has been the most destructive presence in Obama's economic advisory team, and is luckily getting out of the White House soon, has decided to remind the world yet again of his worthless and capital destructive presence, throwing out yet another Mutually Assured Destruction bomb. As Reuters reports, citing the man who almost destroyed Harvard's endowment, and subsequently, America, "Failure by Congress to pass a tax deal in the next couple weeks would "materially increase" the risk of the economy stalling and a double dip recession." And just to make sure that people don't forget him as the person who was 100% confident that a stimulus is the response to everything, he also added that Obama would like to see the Build America Bonds program extended.
In attending a Paul Krugman lecture yesterday, we came away with two main takeaways: 1) the Perceived Wisdoms of academic dogma run rampant throughout U.S. monetary policy; and 2) Keynesians really don’t get it. - Hedgeye Risk Management
Ron Paul Comments On QE2, Says Fed Will Self Destruct, Shocked That Krugman Has "Any Credibility Whatsoever"Submitted by Tyler Durden on 11/08/2010 10:09 -0500
There were few surprises in today's commentary by Ron Paul on QE2: the only man in Congress (with Grayson now gone) who is sufficiently intelligent to realize that the primary culprit behind the US economy's boom-bust cycle is the Federal Reserve, continues to press for the termination of Ben Bernanke's public "service" which has resulted in a collapse in American purchasing power in the 100 years since the first Jekyll Island meeting. Yet Paul takes a 'John Lennon' approach to the problem, believing that active intervention may not even be needed, as the Fed ends up cannibalizing itself: "I think the Fed will self-destruct. People will desert the dollar. I think the Chinese are hinting that already. They are not wanting our dollars as much as raw materials. This is a deeply flawed monetary system. Here we have a small group of people who can create $600 billion with the stroke of a pen... I don't know where people are coming from to think that this can work. What really astounds me me is how tolerant the people are, the people in Congress and the financial market, where did this authority come from? Now somebody outside of the government can spend trillions of dollars and not think anything about it. It doesn't work, it's a failure. And next year it will be more. Bernanke is very clear on what he is going to do - he is going to create money until he gets economic growth and there is no evidence to show that just creating money causes economic growth." All logical and expected. Which is why nobody will endorse the Paul stance, it as it means an end to the trillion dollar wealth transfer system from the middle class to the kleptocracy.
Krugman Dementia Alert: Former Enron Consultant Says Jim Rogers "Has Been Absolutely Wrong About Everything"Submitted by Tyler Durden on 11/06/2010 14:50 -0500
While we approach the topic of Paul Krugman with the same eagerness one approaches a clogged up, never cleaned, bathroom at a frat party that is about 50 years past its due date, (pretty much like Keynesianism) this one just put us over the top. In his latest pointless drivel on the economy, instead of reverting to his usual mode of praying to John Keynes, bitching at those who dare call for accountability and the punishment of all those, such as Krugman, responsible for what is now a $4 trillion taxpayer monetary bailout tab, and begging for trillions, then quadrillions, then quintillions, then an infinite amount of money, the Op-Ed writer has instead decided to start a mudslinging campaign against none other than Jim Rogers, the co-founder of George Soros' Quantum Fund, who has been pretty much spot on with his calls for decades.