Guest Post: Niall Ferguson Shatters Paul Krugman’s Delusions

Tyler Durden's picture

Submitted by F.F. Wiley via Cyniconomics blog,

We followed the latest Paul Krugman feud – this one with Niall Ferguson – until Krugman’s tag team partner and CYNICONOMICS reader Brad DeLong entered the fray.

After about a half dozen posts on Krugman and DeLong this year, we had some topic fatigue.

Yesterday, we learned that we dropped out too soon. It turns out that Ferguson followed his DeLong post with possibly the definitive piece on Krugman – a three-part series published in the Huffington Post earlier this month (h/t Tim Iacono and Ralph Benko).

On one level, Ferguson’s series reinforces what we already know. Those familiar with Krugman’s positions are well aware that his regular boasts about being “right about everything” are blatantly false. We know, for example, that he recommended creating a housing bubble in 2002, which didn’t work out so well in hindsight. We also know that he says completely different things about government debt depending on which political party is driving the deficit higher. When the GOP is responsible, he complains about “fiscal train wrecks” and the “threat to the federal government’s solvency.” When advising the Democrats to add even more debt, he claims that “we’re not facing any type of fiscal crisis.”

But Ferguson raises the scrutiny on Krugman’s work in his “HuffPo” series. He draws on meticulous documentation of Krugman’s public positions on the global financial crisis and Euro crisis. He also calls out the posse of liberal bloggers who follow Krugman’s lead by insulting and name-calling anyone who doesn’t think as they do. (See here for one of our related posts.)

Benko published a nice summary of Ferguson’s articles in Forbes.

I’ll combine the links with a handful of other Krugman-related posts we saved this year, starting with the HuffPo series:

  • In “Krugtron the Invincible, Part 1,” Ferguson notes that he didn’t make up his title – it’s actually a name Krugman calls himself (!) – and focuses especially on Krugman’s stated views on the Euro. Here’s an excerpt:

“I like to think,” Krugman wrote on August 14, “that if I had been proved … utterly wrong … I’d have had the strength of character to admit it and question my premises. But I don’t know for sure, and with some luck I’ll never find out.” Now that I have shown Krugtron the Invincible to have been utterly and repeatedly wrong about the euro, I look forward to reading his admission of error.

To be precise, I would like to see him admit that he got the biggest call of the last several years dead wrong, again and again and again…

  • In part 2, he turns to the global financial crisis and again scours the public record to show that Krugman failed to understand events as they developed, concluding that:

One might have expected a little more humility from an economist who so clearly failed to understand the nature of the biggest financial crisis of his lifetime until after it had happened. Or at least a little less egomania: “Yes,” he wrote in January, “I’ve heard about the notion that I should be Treasury Secretary. I’m flattered, but it really is a bad idea.”

  • The third part places both Krugman and Krugman’s economics in their proper context. I’ll share the first two paragraphs and recommend reading the whole piece if you haven’t already done so:

In my previous two articles, I have shown that Paul Krugman – revered by his acolytes as the Invincible Krugtron – failed to anticipate the financial crisis and wrongly predicted that the single European currency would fall victim to it. I have exploded his claim to intellectual invincibility. Very clearly, he has made at least twice as many major mistakes in his career as the mere two he has previously admitted to.

You may ask: Why have I taken the trouble to do this? I have three motives. The first is to illuminate the way the world really works, as opposed to the way Krugman and his beloved New Keynesian macroeconomic models say it works. The second is to assert the importance of humility and civility in public as well as academic discourse. And the third, frankly, is to teach him the meaning of the old Scottish regimental motto: nemo me impune lacessit (“No one attacks me with impunity”).

Like a Fourth of July fireworks show, Ferguson’s series feels like a grand finale to a succession of Krugman feuds and clashes this year. Here are just a few of the skirmishes from the past six months:

False accusations, unsuccessful forecasts and other errors

  • Krugman joined a host of other pundits in badly misrepresenting the Reinhart-Rogoff controversy in April. He continued to spread misinformation more than a month after the story broke, finally prompting a reply from Carmen Reinhart and Ken Rogoff, which set the record straight on several matters including their past policy advice and the public’s access to their data. Krugman was shown to have made false accusations and called out for childish antics.
  • Responding again to a critique of his work, Rogoff showed that Krugman’s various positions on Europe’s economy and financial markets were contradictory, while discussing flaws in Krugman’s analytical framework.
  • Robert Murphy showed that Krugman incorrectly forecast disinflation in a blog post dated February 2010. Instead of drifting toward deflation territory as predicted by Krugman, inflation soon turned around and began to trend upward.  Murphy points out that the facts make a mockery of Krugman’s claim to inflation forecasting supremacy.
  • Presumably to compensate for Krugman’s inability to admit mistakes, Tyler Cowen intervened on his behalf in June. In a post amusingly titled “Krugman and I were both wrong about the Fed and interest rates,” Cowen pointed out that the second quarter’s taper-induced bond market rout invalidated Krugman’s näive claim that bond yields were mostly impervious to QE.
  • Krugman challenged a Cowen post containing a hypothetical comment about El Salvador. But he discussed the country’s currency without realizing that Cowen chose El Salvador for his example because it doesn’t have its own currency – it uses the U.S. dollar. Note that any other blogger arguing a point on such an obviously mistaken premise would have surely faced Krugman’s snark. In the same response in which Cowen acknowledged Krugman’s correction, he demonstrates that Krugman managed to not only contradict but also parody his own prior views.

Egotism and pomposity

  • Despite sharing some of Krugman’s core views, Clive Crook objects to his contemptuous attitude.
  • Bryan Caplan disputes Krugman’s boast that he can see the other side’s argument but they can’t see his.

Just to be clear, I’m not criticizing Krugman for the number of battles he gets himself into. If he argued his case truthfully and respectfully, there would be little reason for this post. But Krugman accumulates enemies by inventing his own facts, denying obvious mistakes, displaying über-arrogance and insulting those with opposing views. Fortunately, folks such as Ferguson occasionally bring these points to light.

(For more on Krugman’s public positions, see our critiques of his book, End This Depression Now. In “It’s Time to Change Focus From Reinhart-Rogoff Witch Hunts to Krugman’s Contradictions,” we flagged the circular logic in one of Krugman’s favorite excuses for fiscal profligacy. In “Testing Krugman’s Debt Reduction Strategy and Finding It Fails,” we exposed the flaws in his claim that $5 trillion in additional government debt isn’t such a “big deal.”)

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LawsofPhysics's picture

Please, being pig-headed and fully owned by the status quo is a mandatory requirement for winning a nobel prize.  It's a listen to what I say and ignore my actions kind of thing as the people in power like those who promote policies that keep them there.

hedgeless_horseman's picture



pro·pa·gan·da  noun \?prä-p?-?gan-d?, ?pr?-\

: ideas or statements that are often false or exaggerated and that are spread in order to help a cause, a political leader, a government, etc.

1  capitalized :  a congregation of the Roman curia having jurisdiction over missionary territories and related institutions

2  :  the spreading of ideas, information, or rumor for the purpose of helping or injuring an institution, a cause, or a person

3  :  ideas, facts, or allegations spread deliberately to further one's cause or to damage an opposing cause; also :  a public action having such an effect

— pro·pa·gan·dist   noun or adjective
— pro·pa·gan·dis·tic   adjective
— pro·pa·gan·dis·ti·cal·ly   adverb

Examples of PROPAGANDA

He was accused of spreading propaganda.
The report was nothing but lies and propaganda.

Tsunami Wave's picture

Fuck Paul Krugman and the liberals that love citing this douchebag but can't seem to provide any rebuttal when I answer his talking points they throw at me. Utter hypocritical douche.

knukles's picture

Fuck Paul Krugman.
And the whole hypocritical uber-liberal establishment with whom he rides.


macholatte's picture



He also calls out the posse of liberal bloggers who follow Krugman’s lead by insulting and name-calling anyone who doesn’t think as they do.

They’re not liberals, they are not Democrats, they’re Progressives and proud of it. So please call them what they are and stop confusing people. This is the age of Alynski.


If he argued his case truthfully and respectfully …….

 When talking about Progressives, that statement is an oxymoron.


Herd Redirection Committee's picture

Niall Ferguson, Rothschild family apologist.

End of story.  He's on the take, boys.

Steve in Greensboro's picture

Krugman and his flock of hangers-on are not economists.  They are apologists for the Total State.  Their opinions are not based on economic theory, but rather on what will please their masters in the Ruling Class. 

Nice work if you can get it and if you have no morals.

Disenchanted's picture

And on the other hand...


I think if anybody understands this crisis, it’s Ben Bernanke.   After all, he dedicated most of his life to studying the great depression.   And, we’re really lucky that he’s in that job.   His predecessor, Alan Greenspan, in many ways screwed up.  You could say that the bubble was in large measure a result of his negligence, when he didn’t raise interest rates early enough, and let the real estate market go crazy.  But we’re quite lucky, because Bernanke has got this right so far.   And my great fear is that congress is gonna get power over the Fed.  That’s the nightmare scenario – that we have those crazy people on the hill starting to control monetary policy.  Then I really will go back to Britain. ~ Niall Ferguson in an interview with Bill Maher July 31, 2009


"back to Britain" in back to The City?


edit: In case someone thinks I made this up...Strangely enough the youtube video with this interview now sez this: "This video doesn't exist"


But a commenter 'Caged Monkey' in January 2011 posted the same on a thread here at ZH:

comment #882840

gjp's picture

Thank you for posting this!  Niall Ferguson may be belatedly coming around to the Austrian way but his earlier career was generally a love letter to Anglo-Saxon global domination wihtout regard for the moral and economic decay at the heart of the empire.  He is a blowhard who quite fancies himself too, and likely not to be trusted.

bread n circuses's picture

Just like kings used the churches and priests to convince the masses of their God-given noble sovereignty and rewarded them for their service, modern day megalomaniacal tyrants use high priests of the dismal science shrouded with the veil of academic legitimacy to justify their raping and pillaging of the common man.

Alexandre Stavisky's picture

Fiat currency is a device to shift wealth from the productive sectors of an economy to redirect their purposes to interests of government and a parasitical monied class.  National economists say whatever they want with the public believing themselves the audience.  Not true.  Their words are lent to back the purposes of the shadow economies intentions.  They, with honied words, couch their language such that it seems they wish compassion upon the have-nots (entitlements), wish to spur employment (so increase sovereign borrowing), wish strong military (increase that spending), etc.  Really they justify the hands on the levers of sovereign debt which increases money supply, gives greater power to banking syndicate who receive the money first (& its interest, vig, gameplay), and binds the present and future generations whose labours must service this non-dischargeable, generationally-transferred, debt whimsically undertaken without representation.

Artfully spinning the justifications for debt so that they appear a social good when in fact their only purpose is to enlarge money supply, give the syndicate augmented powers, and stave off the bankruptcy of usury's end game IS THE TRUE PURPOSE.

The lies are out!  The people are sick of the whip-saw costs arbitrarily applied to money.  They detest the fraud of open, unbacked production of paper wealth claims that dilute out all honesty.  They despair the exponential increase in debt which is layered upon many other layers and has passed the point of "payability".  The entire structure has snuffed honest and true wealth creation and as it's collapsing, all watch as open frauds, distortions, manipulations, hand-outs, zombie jobs, political buffoonery, backdoor socialism, and spindoctoring frenetically attempt to keep the facade remotely believable.

Never, while in the spotlight, do they stop to consider, "Have I ever created anything of enduring value".  Termites in the tree of liberty who will eventually bring down a republic.

css1971's picture

Just be warned. Non believers were hunted down and drowned, hung, drawn, quartered, tortured etc. Expect nothing better for going against the majority.

Headbanger's picture

I only wish Ferguson would just shatter Krugman's skull and get it over with!

masterinchancery's picture

It would be very entertaining if Ferguson did a Braveheart on Krugman.

alangreedspank's picture

Yeah smash his head like your avatar. That'll stimulate the economy because they'll have to spend millions to rebuilt his face that makes him look like this creepy uncle some people have

sbenard's picture

For a second, I expected a pic of the Propaganda President, the Dictator of Debt, to accompany that definition!

Abiotic Oil's picture

Krugman is an insult to beards everywhere.

He should be pinned down and shaved like a shiny baby's butt. It would be easier to see the shit coming out of his mouth.

jtg's picture

Look at that face. I know the type from my many years working in an academic environment. Behind that placid face is the opposite, a backstabbing, vengeful, academic type.

JuliaS's picture

The likes of Krugman exist throughout history. He's an equivalent of a painter decorating cathedrals with biblical paintings during dark ages. He tries to flatter the elites and gets recognition, publicity and funding as a result. He's a climate change scientist works on new ice age theories and then flip flops to global warming, when it becomes more fashionable.

He's an establishment whore, or as I like calling him "a Fedophile".

Typecast financial predator beard? Check! Just a head-shave shy of a Fed chairman.

Dewey Cheatum Howe's picture

That is racisss...

Besides he is of Cuban descent but all them spics look the same.

Headbanger's picture

Lies-man should be made to sit on the Fox News set for a week in silence for being such a douche!

dizzyfingers's picture

LawsofPhysics: A kinda NewWorldOrderly thing, isn't it?

sgt_doom's picture

Both Niall Ferguson (Bretton Woods Committee -- and Paul Krugman (Group of Thirty -- are the biggest frauds in existence, and not coincidentally, both organizations cited use the same business address in Washington, D.C., as well as the very same fax number.


Billy Sol Estes's picture

Most of all he is published in a News Paper and we all know reading News Papers makes you smart and informed.

SheepDog-One's picture

Sounds like my dad who still insists on getting 3 newspapers delivered and spread all over the kitchen, no matter how much I show him the internet.

DeadFred's picture

Web pages are useless on the bottom of the bird cage.

CPL's picture

Might catch a Bass that needs wrapping.  Hard to fold an iPad around a fish.

toady's picture

I brought you a delicious bass.

TalkToLind's picture

+1!  Pedro offers you his protection.

ParkAveFlasher's picture

There's more where that came from.

silverserfer's picture

Ugghhhhhhhhhhhhhhh, I got algae on my leader!

Col_Sanders's picture

Not really "hard" - just time-consuming...

toady's picture

My brother in law does the same thing. It was a point of contention for years, but we've given up on it now. Actually, it's become a running joke.

They are always late. Now everyone just plans on sitting around an hour, or arriving an hour late, because they know my sister and family will show up saying sheepishly,"Bob was reading the paper."

rtalcott's picture


“If you don't read the newspaper, you're uninformed. If you read the newspaper, you're mis-informed.”

 Mark Twain

Tsunami Wave's picture

"If you believe everything you read, best not read at all" - Benjamin Franklin

Smegley Wanxalot's picture

Krugman is a Nobel Prize winner.

How dare anyone question his superiority?

Cognitive Dissonance's picture

Isn't it interesting how in an inauthentic culture "authority" is bestowed by other so called "authorities". This allows the (ideologically) blind to lead the blind.

Shell Game's picture

At all levels - accouting agencies --> rating agencies --> mega-banks. 


'The centre {of this inauthentic culture} cannot hold'...

sbenard's picture

I remember when Mr. Krugman himself tried to make that case in this very ZH forum a few months ago. He came here and demanded that we all show him due respect as His Nobel-Prize-Winning Highness! He adjured us all to symbolically worship at his feet.

What you say in apparent jest, he said in seriousness! That kind of ego is hubris at its most destructive level!

Dr. Engali's picture

Are you sure that was Mr. Krugman and not some very clever, and apparently very good, Hedger who assumed him as an alternative identity to mess with you? 

Cognitive Dissonance's picture

I don't know if ZH's Mr. Krugman was 'real', but I certainly know that I'm the almighty and supremely powerful Cognitive Dissonance.

<Just waiting on my Nobel Prize to show all you fools the proof.>  :))





<Still waiting. What's taking those fools so long?>

Dr. Engali's picture

I believe that Zero Hedge should have their own peace prize. It would certainly be more authentic.

jtg's picture

Krugman did not win a Nobel prize, he won a prize from the Swedish central bank. Ironic, isn't it?

beercandad's picture

Just like his idol and fellow ass licker--the chimp in  chief.

Cognitive Dissonance's picture

One simply cannot "change" the mind of ideologues or those paid (or employed) to have and maintain a specific position. Arguing with a fool simply demonstrates who is also a fool. Worse, the argument allows all the greater fools to line up on one side or the other seeking confirmation to their bias.

Dr. Engali's picture

Good Lord isn't that the truth? I have given up arguing with the red and blue ideaologues a long time ago, and that act alone has taken a lot of stress out of my life.

DeadFred's picture

Agreed. So why in God's name are we reading yet another post about this tool? And why didn't I just skip it too?